Allans newest report.. for those who haventread his report... email address is in the body.
ALLAN BARRY REPORT ON
CANADIAN DIAMOND EXPLORATION
8TH EDITION
January 2, 2007
Welcome to the 8th edition of our report on Canadian Diamond Exploration. In the recent 7th edition we discussed indicators which suggest the bearish market that has gripped the Canadian diamond industry for the last few years has been bottoming in the last six months, and that the next major move will be a more bullish market. Based on these indicators, it is our opinion that this more bullish market is approaching and could get underway in the near term.
One of the main reasons we feel the group of diamond exploration companies have had a rough ride in the last few years is to a large degree because they are a victim of the past success in Canada. This sounds counter intuitive but because of successes like Aber Diamond and Diamet Minerals, all new discoveries are compared to the Diavik and Ekati diamonds mines these companies discovered. It seems as if the market feels that every company needs to find projects of similar scope and size in order to be successful.
This is far from a reasonable conclusion. The basic reality is not all deposits are the same, nor do they need to be. Diamond deposits are going to have some similarities to other deposits in addition to their own unique characteristics. In order to understand this, one has to examine the relevant factors, such as what is the grade in carats per tonne, the value per carat and the tonnage of each individual diamond bearing kimberlite.
The answers to these questions will reveal the potential of any diamond discovery to turn into a mine. Isolating any of these factors and ignoring the others will not give a realistic idea of the true potential of a discovery.
A good example of how diverse the statistics of a diamond mine can be is the A154 South pipe, which is part of the group of kimberlites at the Diavik diamond mine in Canada, compared with the Argyle mine in Australia. At A154 South, the value of diamonds is over $400.00 USD per tonne; at Argyle the value of diamonds is around $24.00 USD per tonne. More examples are the Venetia mine in South Africa and Udachnaya mine in Russia that have values around $120.00 USD per tonne compared with Orapa in Botswana with a value of $41.00 USD per tonne. Even though the value per tonne at A154 South is very high, it is not nearly as valuable of a diamond mine as Jwaneng in Botswana. The value at Jwaneng is around $120.00 USD per tonne, but it is more valuable than Diavik because Jwaneng has much larger tonnage. There is one common denominator, despite having dramatically different diamond values per tonne and tonnage; these are all important diamond mines.
The value per tonne is the grade in carats per tonne and value per carat. These diamond mines demonstrate that the values per tonne can range from around $24.00 to over $400.00 and yet they are all diamond mines. We use these examples to stress very important points to keep in mind when looking at diamond results from new discoveries. The main point is they don’t all have to be the second coming of A154 South in order to become a profitable diamond mine.
Our bottom line is that as a group, the diamond exploration companies are currently out of favour – partially because the market is comparing every new discovery to the Ekati and Diavik diamond mines. These kinds of comparisons are somewhat misguided and fail to understand the basic reality of mining any commodity. Each potential mine has to be looked at individually because the grades and tonnage can vary significantly from mine to mine.
This scenario is creating an opportunity to buy very good companies with potentially outstanding discoveries at undervalued prices. When the market turns more positive, which we feel is in the near future, these bargains have the potential of performing exceptionally well.
Our Diamonds In The Rough
This section is devoted to companies that are impressive because of the merits of their projects. We will begin with the addition of Hudson Resources to our group of “Diamond In The Rough” companies. After the new addition we will feature our past picks and update on their recent results and future developments. In our opinion, this group of companies has the potential to lead the market in a more positive direction with results from their diamond exploration efforts.
A New Addition
Hudson Resources
Hudson Resources is focused on diamond exploration in western Greenland. Even though Greenland is not located in Canada, it shares similar geology to the areas of Canada where diamonds have been discovered. This report is focused on diamond exploration in Canada, but we are including Hudson at this time because they are a Canadian based company and have good potential. We are not shareholders of the company.
Hudson has made a discovery of diamond bearing kimberlite on their Garnet Lake project in western Greenland. They have done caustic fusion analysis of the drill core from this discovery and found very encouraging macro diamonds from this test. This caustic fusion analysis only processed a small amount of drill core but has recovered sizable macro diamonds that are a good indication of the potential to find larger commercial sized stones.
To date the company has only found the one diamond bearing kimberlite but due to other diamond indicator minerals found, there is realistic potential to find more. Whether or not a standalone mine can be developed in Greenland still remains to be proved but the diamonds they have found so far is very compelling.
In order to get a realistic idea of what the future holds, will require the results of the 50 tonne sample they are doing and most likely the discovery of additional diamond bearing kimberlite. But the bottom line is we can’t ignore their potential based on the diamonds they have recovered so far from small samples.
We look forward to drilling to look for new kimberlites and the results of the 50 tonne sample and if those results come back positive, future testing of the economic potential of the Garnet Lake discovery.
Hudson’s stock symbol is HUD and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.hudsonresources.ca. On their website you can find past news releases and additional information to do your own due diligence.
Past Picks
Arctic Star Diamond Corp.
Arctic Star has three key projects we are following closely. One of those projects is in the Northwest Territories of Canada, in close proximity to the Diavik and Ekati diamond mines. Another group of projects is in the Attawapiskat region of northern Ontario where De Beers is building one of Canada’s future diamond mines. A new addition to their portfolio is in the Eastern Arctic region that is emerging as another important area for diamond exploration in Canada. We are shareholders of the company.
We began featuring Arctic Star in our reports primarily because of their Credit Lake project in the Northwest Territories. One of the reasons we are impressed with this project is because of its close proximity to the Diavik and Ekati diamond mines. Obviously, if all they had is a claim block in the right area we would not have been overly impressed, but what is more exciting is the diamond indicator minerals found on their claim block. Past drilling has not led to the discovery of kimberlite yet but they have continued to move forward because the diamond indicator minerals are strongly suggesting they come from a significantly diamond bearing source. We look forward to the upcoming drilling in the first quarter of 2007 because they are narrowing the search and closing in on what has the potential of being an impressive discovery.
Arctic Star is also involved in the Attawiskat area in the James Bay lowlands of northern Ontario. While Arctic Star and their joint venture partner Metalex have been waiting for permits to continue the 200 tonne sample of their T1 kimberlite, they have been moving ahead on exploration in the region. Their exploration efforts include geophysical work that recently led to a new discovery of kimberlite located between the Victor area and the Kyle Lake area where the T1 kimberlite was found. The drilling into this new kimberlite started 10 metres below surface, and the drill core has since been sent in for diamond recovery. This new discovery was the first target drilled from a new geophysical survey that has identified more than 30 additional targets that will be drilled in the future.
Recently the company became involved in the eastern Arctic area by entering into an option agreement to earn 50% of some of Diamonds North projects. This area is emerging as a new focus for diamond exploration in Canada because of discoveries by Diamonds North on their projects that are not part of the group they optioned to Arctic Star and Indicator Minerals Inc. has also made new discoveries in this area. Arctic Star’s projects have Diamonds North and Indicator Minerals on the borders of their joint venture ground. The exploration season begins in the spring and continues throughout the summer in this region.
The combination of the Credit Lake project, the Ontario projects and the Eastern Arctic projects enable the company to have drilling during most of the year. By extending the drilling season we can look forward to the potential to make discoveries of kimberlite throughout more months of the year. Drilling is underway on the Ontario projects and drilling at Credit Lake should be underway in the first quarter of 2007. Past work is putting them in a great position to come up with new discoveries in the upcoming drilling. We like their chances.
Arctic Star’s stock symbol is ADD and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.arcticstardiamond.com. On their website you can find past news releases and additional information to do your own due diligence.
Diamonds North Resources
Diamonds North currently has a few tonnes of drill core from their new kimberlite discoveries on their Amaruk project in the lab undergoing testing for the presence of diamonds. These kimberlites were discovered in areas where the company has found large counts of diamond indicator minerals in past surface sampling. We are shareholders of the company.
Indicator minerals play a very important role when exploring for kimberlite, the “host rock” that brings diamonds to the surface. One important role they play is as a guide to finding a kimberlite. An equally important role they play is as an indicator of the potential for the kimberlite they came from to be diamond bearing.
At the Amaruk project, indicator minerals were important in leading to the discovery of these kimberlites. The diamond indicator minerals found near these kimberlites give very good clues to the potential for these kimberlites to have diamonds present. They have found high quality eclogitic and pyrope garnets that suggest that they come from significantly diamond bearing kimberlite. If the diamond indicator minerals found in this area come from the kimberlites they have found, then they have the realistic potential to be significantly diamond bearing.
When a new kimberlite is discovered, the more drill core sent in to test if diamonds are present the better because diamonds (even large commercial sized stones) are small and finding them when drilling through rock with small diameter drill holes is not easy. Even in a highly diamond bearing kimberlite if you sample a poor area you can get poor results. The best way to avoid this issue is to send in as much core as possible - ideally over 100 kgs at a minimum. In these new discoveries Diamond North has sent in from 371 kgs up to one tonne from the various kimberlites. Those samples are definitely enough to establish whether these kimberlites are macro diamond bearing.
The indicator minerals helped lead to these new discoveries, and the quality of the diamond indicator minerals suggests that if they came from the kimberlites found then they have a great chance of being diamond bearing. We look forward to these results and also future drilling to search for more kimberlites that should get underway in the spring.
Diamonds North’s stock symbol is DDN and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.diamondsnorthresources.com. On their website you can find past news releases and additional information to do your own due diligence.
Indicator Minerals Inc.
Indicator Minerals recently announced the results from their new kimberlite discoveries in the eastern Arctic region of Canada. The market reacted negatively to these results by dropping to less than half of their yearly high. Although they didn’t find a mother-lode of diamonds, they still have the potential of finding more kimberlites that have the potential of being significantly diamond bearing. We are shareholders of the company.
We have said this before and in the future will most likely say it again: kimberlites are always found in clusters. Some clusters can have over 100 kimberlites in the cluster and those kimberlites can have widely variable diamond grades in the group.
The geophysical work suggests that they have the potential of being in one of these clusters with a lot of kimberlites. If that is the case the chances of finding the best kimberlites in the cluster from the first few found would have more to do with luck than anything else.
The work so far has given them several reasons to be encouraged. They have proved that geophysics is useful in helping find kimberlites in this area. As well they have already drilled into a large kimberlite so they know that this area has the potential of finding large tonnage kimberlites. The diamond indicators found in the surface sampling are suggestive that there is significantly diamond bearing kimberlites on this project.
With future drilling focused on testing geophysical targets that also have diamond indicator minerals in close proximity they have the potential to obtain much better results. In addition, the large kimberlite they have already found should get more drilling because in a large kimberlite you can often get different areas of the kimberlite that have better grades than others. The only way to get a real understanding of a big kimberlite like this is to drill more to see if there are areas with higher grades.
A good indication of the potential will be when Indicator’s partner Teck/Cominco decides on a budget for the spring drilling season. Teck/Cominco has to spend $14 million to earn a 51% interest in this project. Our speculation is they will be very encouraged by what has been learned so far and will want to invest more money than last year on the upcoming drilling.
Indicator Minerals stock symbol is IME and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.indicatorminerals.com. On their website you can find past news releases and additional information to do your own due diligence.
Metalex Ventures Ltd.
While Metalex has been working through the process to get a permit to continue the 200 tonne sample of the T1 kimberlite, they have been able to continue exploration and have recently announced the discovery of a new kimberlite. We are shareholders of the company.
This new kimberlite is on ground that was staked because of encouraging results from a geophysical survey. The new ground is located between the Kyle Lake area where the T1 kimberlite is and the Victor area where De Beers is developing one of Canada’s future diamond mines. In this new area, over 30 geophysical anomalies where identified and the first one drilled has found kimberlite. The kimberlite was intersected in the first 10 metres below surface and has been sent in for diamond recovery. We look forward to the testing of this kimberlite and the on going drilling to test the other targets.
On the T1 kimberlite, development work has been delayed as the company is working to get permits to continue the work to extract a 200 tonne sample from this kimberlite. It has proved to be diamond bearing with good sized macro diamonds from processing drill core. There really is no way of knowing with any kind of certainty how long these delays will continue and we feel this is an important point to keep in mind when doing due diligence on the company. Delays like this are always frustrating but due to the realistic potential of this discovery we remain confident about its potential and will remain patient as we await news on the resolution of the permitting issues.
The Attawapiskat area and west to the Kyle Lake area is a very good place to be looking for new diamond bearing kimberlite because it has proved (in the case of the Victor mine that De Beers is developing) that there are economically mine-able kimberlites in the area. The quality of the diamonds in the Victor mine are exceptional with some of the highest values per carat of any primary kimberlite in the world.
Although we are concerned with the delays at T1, we remain hopeful that the issues can be overcome. De Beers also had issues with Victor but they have been resolved and is now moving forward. The new ground with its new kimberlite discovery is very exciting. It’s important to keep aware of new discoveries in an area where one of Canada’s new diamond mines is located. In this new discovery, testing is underway to determine if its diamond bearing; and more drilling will be done to test a large group of geophysical targets.
Metalex’s stock symbol is MTX and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.metalexventures.com. Their website contains past news releases and additional information to do your own due diligence.
New Nadina Explorations Ltd.
New Nadina has a very good new discovery of diamond bearing kimberlite found in close proximity to two Canadian diamond mines. Last year’s discoveries and the work to pick drill targets for this year’s drilling season put the company in a good position to gain a bigger following. We are shareholders of the company.
At this point in time, based on the market value of the company, it is fair to say that they are not getting much respect for what they have found, nor their potential to make new discoveries. This is very surprising especially when considering where their project is located - right in the heart of diamond country.
The new kimberlites they found came back with encouraging macro diamonds in the small amount of drill core that was sent in for caustic fusion analysis. When we look at diamond results from small samples, we look to see if the kimberlite is diamond bearing and if macro diamonds are present. When such small samples are taken from a kimberlite that could have millions of tonnes it is misguided to put any more importance on these results than whether or not diamonds are present and if macro diamonds are found as well.
After a kimberlite is proven to be diamond bearing then the true potential can only be known by taking larger samples. Between 50 and 500 tonnes will start to give useful statistics on the commercial sized stone potential. Based on what New Nadina has found so far, they have every reason to start taking larger samples.
There have also been diamond indicator minerals found in surface samples which indicate the realistic potential of finding more kimberlites. Last summer they did more geophysical work that will also help them in their search. The geological team working on this project is a very accomplished group that has done a very thorough job so far and we expect that to be the case in the future.
Based on the quality of the project and where it’s located, this company is not being given much respect. With a very small market value and the upcoming drilling season, this could change for the better in a short period of time.
New Nadina’s stock symbol is NNA and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.nadina.com. On their website you can find past news releases and additional information to do your own due diligence.
Peregrine Diamonds
Peregrine has released the diamond results from a bulk sample taken in 2006. In our opinion these results were very good but the market reacted negatively and we feel this is an overreaction. We are shareholders of the company.
The reasoning behind the reassessing of the DO27 that was found in the 1990’s was because the sampling done in the past tested the wrong portion of the kimberlite and that testing was not representative of the main part of the kimberlite. Since Peregrine has been testing this theory they have proved that the above conclusion was most likely correct.
The testing of the main body of the kimberlite has consistently come back with significantly higher grades than the testing that was done when this kimberlite was first found. In addition to the main body of the kimberlite, there is a lobe to the northeast. The bulk testing of DO27 in the 1990’s came mainly from this lobe and it would appear that this sample didn’t even get a representative sample from the lobe because Peregrine has drilled more holes in this lobe and the results suggest that there is a better grade potential than the work in the 1990’s indicated.
In addition to the DO27 kimberlite, there are other kimberlites that were found in the past that could have more potential and more work is needed to get a realistic idea of their potential. Even if all they have is the known kimberlites on their property, we would be happy, but there is an added bonus. They also have geophysical indicators that strongly indicate there is a realistic potential of finding more kimberlites on their ground.
In early September 2006 they released the diamond grades from the 500 tonne sample from DO27 and the grades came back in line with the earlier testing they had done in the main body of the kimberlite. The locations they drilled tested a larger area of the main body than where they had drilled in the past and the results returned similar carat per tonne grades throughout these various drill sites.
After the valuations per carat news was announced in November 2006, the market value dropped because the numbers were lower than last year’s valuations. This is easily explained because in some stone sizes, rough diamond prices have softened this year. This softening in prices is most likely a short-term anomaly, based on supply and demand that suggests a long term widening supply shortage for many years into the future that can only lead to higher prices. The bottom line for us is that these valuations are not overly important because DO27 is not producing and selling diamonds at this time; getting overly worked up about these results is unreasonable.
The winter work season is coming up quickly and we should see further work to evaluate DO27 and the lobe as well as more work on DO18, which is in close proximity. In addition, we are hoping to see drilling to test some of the other targets on this project because this could have a very positive effect - especially if they find good diamond grade potential on any new discoveries.
Peregrine’s stock symbol is PGD and the shares trade on the Toronto Stock Exchange. Their website is www.pdiam.com. On their website you can find past news releases and additional information to do your own due diligence.
Shear Minerals Ltd.
Shear has discovered a new style of kimberlite on their Eastern Arctic project that has found a much better quality of diamonds than the discoveries made prior to the most recent exploration season this past summer. We are shareholders of the company.
Prior to these new discoveries, the kimberlites had been only modestly diamond bearing with few macro diamonds. These new kimberlites have much better macro diamonds. Based on these results, they are now in a good position to start taking larger samples to get a realistic understanding of the commercial sized stone potential.
The past discoveries had found fine-grained indicator minerals and few diamonds. The new kimberlites have medium to coarse grained indicator minerals and have much better diamonds including promising macro diamonds from small tests. The next important step is to start taking larger samples to get a clearer picture of the commercial sized stone potential.
The diamond indicator minerals found in surface sampling is what has kept the company focused on aggressively exploring their ground. They strongly suggest significantly diamond bearing kimberlite sources. The indicator minerals recovered from the past kimberlite discoveries were much different than the indicator minerals found in the surface samples. These indicator minerals from surface samples had not found a source until these recent discoveries.
The quality of stones found in these new kimberlites is, in our opinion, a major breakthrough. The most obvious breakthrough is finding a different style of kimberlite with much better diamonds. These new discoveries give the company kimberlites that warrant larger tests. Additionally they give the company a better idea of where to focus future exploration for new discoveries.
We look forward to the upcoming spring and summer exploration season, which will allow this work to get underway. Based on these new discoveries, the company is in an excellent position for success. Diamond exploration takes determination, and the team at Shear is a very determined group and it looks like that determination is being rewarded and will continue to be in the future.
Shear’s stock symbol is SRM and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.shearminerals.com. On their website you can find past news releases and additional information to do your own due diligence.
Snowfield Development Corp.
Snowfield is making good progress to extract a 500 tonne sample from the Mud Lake kimberlite. Earlier testing of small amounts of drill core from this kimberlite proved it was diamond bearing with very encouraging distribution of macro diamonds. We are shareholders of the company and a consultant to the company.
This 500 tonne sample is a follow up to the previous analyses that recovered macro diamonds from a small amount of drill core. This larger sample is the ideal way to realistically estimate the commercial sized stone potential. Many companies are not able to go to this sized sample after caustic fusion analyses of drill core because many kimberlites are found in remote areas in Canada. The Mud Lake kimberlite is located around 50 kms from Yellowknife and less than 1000 metres from the shoreline of Great Slave Lake. This allows access in the winter over an ice road or in the summer by barge.
In addition to the above sample, the company is preparing to drill early in 2007 on a new area of interest to the northeast of the Mud Lake kimberlite. One of the main reasons the Mud Lake kimberlite was discovered was as a result of high counts of indicator minerals that were found in close proximity to the lake. The past surface sampling north of Mud Lake has found a similar situation of high counts of indicator minerals found in close proximity to Sipper Lake. Sipper Lake is the nearest logical area to search for the kimberlite source of the indicator minerals found in the surface sampling.
The indicator minerals from the Sipper Lake area have been tested and they are very similar to those found in the Mud Lake kimberlite. The indicator minerals from Mud Lake and near Sipper Lake are unique because of a rare but important diamond indicator mineral called “Green Garnet”. What makes this a very important indicator mineral is, although it is rare, every location where these garnets have been found throughout the world there are also diamonds found. In fact, most of the kimberlites where green garnets and diamonds are found are diamond mines. Of course these are scientific indicators and only give an educated guess, but they were useful at Mud Lake in showing its potential to be diamond bearing, as was the case in other diamond bearing kimberlites where these indicator minerals were also found. Some of those kimberlites are the most prolific diamond mines in the world.
Snowfield is in a very good position for a major breakthrough with the work that is underway to do a sizable sample to test the commercial sized diamond potential at Mud Lake. As well, drilling to explore for a new kimberlite in the Sipper Lake area should be underway early in 2007. The combination of these two efforts could lead to a higher profile for the company in the near term.
Snowfield’s stock symbol is SNO and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.snowfield.com. Their website contains past news releases and additional information to do your own due diligence.
Stornoway Diamond Corp.
Stornoway has acquired 75.6% of the shares of Ashton Mining of Canada and 93% of the shares of Contact Diamond Corp. and is the majority shareholder of both companies. Recently they have also announced encouraging results from their Aviat project and their joint venture project with Shear Minerals. We are shareholders of the company.
The takeovers of Ashton and Contact have drawn a lot of attention with many followers of these three companies focused on the takeovers. In a way it seems like the market is overlooking some of the recent developments that Stornoway has made on their other projects so we are hopeful these takeovers will be finished in the near future.
Earlier in the report we discussed the encouraging results in the feature on Shear from the Churchill project that Stornoway is one of the joint venture partners. These results, in our opinion, are the best results to date from this project and are a reflection of the quality of the various projects that Stornoway is involved in. The spring and summer exploration season will help advance these new discoveries and based on the encouraging macro diamonds give them good reasons to take bigger samples to get a realistic idea of the commercial sized stone potential at the Churchill project.
On the company's Aviat project in the eastern Arctic they recently announced their best discovery so far. The main questions about this project have been relating to tonnage potential. In the recent drilling season the company found a new discovery by prospecting that has the potential of being their largest tonnage target found to date.
Of particular interest for us are the AV2, AV3, AV5, AV67 and AV8 discoveries. These various sheets could be part of one larger body that covers an area around 3.5 by 1.5 kms. These dimensions are very encouraging as are the intersections and diamond grades from results announced so far. The dimensions are similar to the Snap Lake discovery, which is another sheet like kimberlite that is being developed by De Beers in the NWT into one of Canada’s future diamond mines.
Another interesting aspect of these sheets is the northwest dip seems to be toward the southeast and the southeast intersections suggest a dip toward the northwest. Also the drilling to the northeast dips toward the southwest. It seems that these bodies form somewhat of a ringed type shape that remains open to add to the size. With the encouraging size so far that suggests large tonnage potential, and the grades, this new discovery gives the company many reasons to start taking significantly larger tests to get a clearer understanding of the commercial sized stone potential of this new discovery.
Due to the combination of the benefits from the acquisitions of Ashton and Contact and the encouraging results from the Churchill and Aviat projects, the company is in a very good position for significant future growth.
Stornoway’s stock symbol is SWY and the shares trade on the Toronto Stock Exchange. Their website is www.stornowaydiamonds.com. Their website contains past news releases and additional information to do your own due diligence.
Our Report Card
We are not big fans of shameless self-promotion; we feel there is enough of that in the investment world. We are much more interested in allowing our research and results of the companies we feature in our reports to speak for themselves. To make it easier for our readers to analyze our past performance we have this section entitled "Our Report Card".
After the company name, we list the dates they were featured, the price of the stock on the date of those reports, and then the current price. After we indicate the above information we will also include updates if they have not been previously featured in the current edition in our Diamonds in The Rough Section.
Before going on, we would like to remind our readers of something we have all heard before: past performance is not always an accurate indicator of future returns. We have added this section to make it easier for our readers and ourselves to quickly look at the past and what has transpired.
Past performance of our Diamonds In The Rough
Aber Diamond Corp.
First featured in Aug.15/2005 edition
Price on that date $38.75 CDN
Second feature in Feb.28/2006 edition
Price on that date $42.90 CDN
Current price $42.72 CDN
Aber’s market value has really come to life in the last couple months. This better performance started shortly after the announcement that they would be buying the remaining interest they didn’t already own in Harry Winston. This increased interest will have a positive effect on the company for years into the future. In addition to this purchase, the results coming from their diamond mining operations continues to be impressive. They have been working on optimizing their mining operation and they are also getting positive surprises on growing their reserves from the known kimberlites on the property. The company is really firing on all cylinders and it looks like that trend will continue into the future. Our opinion has been for a long time that Aber is one of the most exciting mining companies in North America and their performance on operations and plans for the future keep going in the right direction. We are not shareholders of the company.
Aber’s stock symbol is ABZ and the shares trade on the Toronto Stock Exchange. Their website is www.aber.ca. Their website contains past news releases and additional information to do your own due diligence.
Arctic Star Diamond Corp.
First featured in Aug.15/2005 edition
Price on that date $0.24 CDN
Second feature in Feb.28/2006 edition
Price on that date $0.26 CDN
Current price $0.26 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Arctic Star’s stock symbol is ADD and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.arcticstardiamond.com. On their website you can find past news releases and additional information to do your own due diligence.
Ashton Diamonds of Canada
First featured in Oct.20/2005 edition
Price on that date $1.09 CDN
Second feature in Feb.28/2006 edition
Price on that date $1.26 CDN
Third and final feature in Aug.14/2006 edition
Price on that date $1.17 CDN
Current price $1.20 CDN
Now that Stornoway has acquired 75% of the shares in Ashton we will discuss developments on the Ashton projects when featuring or updating on Stornoway. We will consider our third feature on Ashton as our final feature. We are not shareholders of the company.
Ashton’s stock symbol is ACA and the shares trade on the Toronto Stock Exchange. Their website is www.ashton.ca. On their website you can find past news releases and additional information to do your own due diligence.
Contact Diamond Corp.
First featured in Oct.20/2005 edition
Price on that date $0.55 CDN
Second feature in Feb.28/2006 edition
Price on that date $0.35 CDN
Third and final feature in Aug.14/2006 edition
Price on that date $0.41 CDN
Current price $0.41 CDN
Now that Stornoway has acquired 93% of the shares in Contact we will discuss developments on the Contact projects when featuring or updating on Stornoway. We will consider our third feature on Contact as our final feature. We are not shareholders of the company as we have tendered our shares to the Stornoway takeover offer.
Contact’s stock symbol is CO and the shares trade on the Toronto Stock Exchange. Their website is www.contactdiamond.com. On their website you can find past news releases and additional information to do your own due diligence.
Diamonds North Resources Ltd.
First featured in May 30/2006 edition
Price on that date $1.00 CDN
Second feature in Oct.19/2006 edition
Price on that date $0.83 CDN
Current price $0.75 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Diamonds North’s stock symbol is DDN and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.diamondsnorthresources.com. On their website you can find past news releases and additional information to do your own due diligence.
Indicator Minerals Inc.
First featured in Aug.14/2006 edition
Price on that date $0.76 CDN
Second feature in Oct.19/2006
Price on that date $0.70 CDN
Current price $0.45 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Indicator Minerals stock symbol is IME and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.indicatorminerals.com. On their website you can find past news releases and additional information to do your own due diligence.
Metalex Ventures Ltd.
First featured in Jan.9/2006 edition
Price on that date $0.84 CDN
Second feature in Feb.28/2006 edition
Price on that date $0.70 CDN
Current price $0.475 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Metalex’s stock symbol is MTX and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.metalexventures.com. Their website contains past news releases and additional information to do your own due diligence.
New Nadina Explorations Ltd.
First featured in May.30/2006 edition
Price on that date $0.76 CDN
Current price $0.25 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
New Nadina’s stock symbol is NNA and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.nadina.com. On their website you can find past news releases and additional information to do your own due diligence.
Peregrine Diamonds Ltd.
First featured in Aug.14/2006 edition
Price on that date $2.75 CDN
Second feature in Oct.19/2006 edition
Price on that date $1.60 CDN
Current price $1.45 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Peregrine’s stock symbol is PGD and the shares trade on the Toronto Stock Exchange. Their website is www.pdiam.com. On their website you can find past news releases and additional information to do your own due diligence.
Shear Minerals Ltd.
First featured in Aug.15/2005 edition
Price on that date $0.32 CDN
Second feature in Oct.20/2005 edition
Price on that date $0.28 CDN
Third feature in Jan.9/2006 edition
Price on that date $0.30 CDN
Fourth Feature in Feb.28/2006 edition
Price on that date $0.36 CDN
Current price $1.35 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Shear’s stock symbol is SRM and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.shearminerals.com. On their website you can find past news releases and additional information to do your own due diligence.
Snowfield Development Corp.
First featured in Aug.15/2005 edition
Price on that date $0.13 CDN
Second feature in Jan.9/2006 edition
Price on that date $0.13 CDN
Third feature in Feb.28/2006 edition
Price on that date $0.12 CDN
Fourth feature in Oct.19/2006 edition
Price on that date $0.14 CDN
Current price $0.155 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company and a consultant to the company.
Snowfield’s stock symbol is SNO and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.snowfield.com. Their website contains past news releases and additional information to do your own due diligence.
Stornoway Diamond Corp.
First featured in Jan.9/2006 edition
Price on that date $1.18 CDN
Second feature in Feb.28/2006 edition
Price on that date $1.17 CDN
Third feature in Aug.14/2006 edition
Price on that date $1.16 CDN
Fourth feature in Oct.19/2006 edition
Price on that date $0.95 CDN
Current price $1.21 CDN
We have presented our current update previously in the report so no need repeating here. We are shareholders of the company.
Stornoway’s stock symbol is SWY and the shares trade on the Toronto Stock Exchange. Their website is www.stornowaydiamonds.com. Their website contains past news releases and additional information to do your own due diligence.
Overall Report Card on Our Diamonds In The Rough
It has been over a year since we began this report and we are now ready to do a review on how things have progressed in the last year.
Many times in our previous reports we have indicated that the Canadian diamond industry is out of favour and that we feel this has gone through a bottoming phase and looks like the next major move will be a more positive market for the industry.
This more positive market has not yet gotten underway and therefore in an under appreciated market we are not expecting significant returns on our portfolio. When taking a contrary position, it takes patience to ride out the negative market and prepare for a more positive market. In a turnaround play, such as what we feel Canadian diamond companies are in the midst of, those that position themselves in quality companies during the negative market can see exceptional returns when the market gets more positive.
When picking companies in an out of favour sector it is not surprising to us that the market values of the various companies have been treading water so we would not give ourselves high marks as it applies to returns. On the other hand we feel the quality of the projects that the companies we have featured are exceptional and we would give ourselves much better marks on company selection.
The companies featured in our reports are making significant fundamental developments that are under appreciated in their market values. As the market transitions into a better market we feel these companies will have an important impact and be leaders in a more bullish market.
It has obviously been a challenging start as a new report covering the Canadian diamond industry. We remain undeterred in our opinion of the potential of the group of companies we feature in our reports to have significant success in the search for future Canadian diamond mines.
What makes the Allan Barry Report Unique
For the last 13 years, the editor of this report has had a career as a consultant to publicly traded junior exploration companies. Services provided to these companies include investor relations, corporate communications, strategic planning, and fund-raising.
As a consultant to a small company one has to wear several hats:
• communicating the company’s efforts to the investing community;
• communicating technical aspects of those efforts;
• being involved in raising funds for drilling and exploration;
• being involved in the technical analysis;
• and reporting of what has been found.
These efforts have provided a unique opportunity to learn, from an insider’s perspective, the challenges that junior exploration companies face. Additionally it has opened doors to meeting a very accomplished group of people.
Spending this time as a consultant to junior exploration companies has provided a unique perspective that is an asset few analysts or newsletter writers possess.
In Closing
We would like to take this opportunity to thank you for taking the time to read this report. We hope this information proves to be informative and helpful. We ask the reader not to post this report on any website for at least three days after you receive it and that if it is posted to post the entire report without any editing. We invite our readers to pass on our contact information to anybody they feel may be interested in receiving this report or future reports and we would be glad to add them to our email list for future publications.
There is no charge for this publication. In order to be added to our email list we prefer to have your name, phone number and email address. You can call us on our toll free number at 1-877-574-4575 or locally at 604-574-4575 or email allanbl@shaw.ca with the above information.
Regards,
Allan Barry Laboucan,
Editor & Writer
Allan Barry Reports
Disclaimer: The information included in this Allan Barry Report on Canadian Diamond Exploration, is for information purposes only. No statement or expression of opinion, or any other matters herein, directly or indirectly, is an offer, solicitation or recommendation to buy or sell any securities mentioned. The information contained in this e-mail is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does the editor Allan Barry Laboucan or his companies, or affiliated companies, assume any liability. We do not receive or request compensation in any form in order to feature companies mentioned herein. The editor may have equity positions in companies referenced in this newsletter, or offers consulting services to some of these companies and will notify the reader of these positions or services provided in the section of the report on each individual company. The editor his personal company or affiliated companies, disclaims all responsibility and accepts no liability (including negligence) for the consequences for any person acting, or refraining from acting, on the information provided in this publication.