Street Wire-SWY presses on with Renard testlink: https://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=Z-C:SWY-1392024&symbol=SWY&news_region=C
Stornoway presses on with Renard test
2007-07-24 14:51 ET - Street Wire
by Will Purcell
Stornoway Diamond Corp. is optimistic its Renard bulk sample will deliver good diamond valuations. The company is wrapping up the processing of over 6,000 tonnes of kimberlite taken from three key kimberlites on the central Quebec property, and results are expected to trickle in during the summer and early fall. The grades should yield no surprises, but the diamond values from each pipe will be vital to the project. Stornoway is a Renard believer, as the project was the key reason it launched a bid for the shares of Ashton Mining of Canada Inc. last year.
The test
Stornoway's president, Matt Manson said that about 6,500 tonnes of the kimberlite that Ashton mined early this year had been put through the dense media processing plant. Stornoway released the diamond results from Renard-3 in mid-June, and the company hopes to wrap up its Renard-2 results by late this month, although early August may be a more realistic target.
Mr. Manson said that the sample of higher-grade rock taken from the surface of Renard-4 was the last material to be processed, and results from that rock are expected about a month after the Renard-2 diamond recoveries are complete. Once Stornoway has all of its diamonds, the company will have a shorter wait for the diamond valuations. Mr. Manson said he expected to have the appraisal by late September.
The expectation
The company has an inkling of what to expect, as Ashton had a much smaller parcel of diamonds appraised in 2005. The company completed 150-tonne tests of four Renard kimberlites and sent 459 carats of diamonds off to WWW International Diamond Consultants Ltd. for valuation. The result was a modelled value of $88 (U.S.) per carat, with the suggestion that a rosier forecast of $104 (U.S.) per carat was not an unreasonable estimate.
Mr. Manson said the latest test appears to be off to a good start, noting that with few exceptions, the Renard diamonds were all nice gems. In a typical mine, about one-third of the stones are quality gems, with a second third being clivage stones, which would require splitting to remove imperfections to make them quality gems. The remaining third consisting of boart, or industrial diamonds.
So far, the signs from Renard suggest a more promising proportion of gems, which would augur well for the value. The colours of the Renard diamonds are perhaps less promotable. Mr. Manson said that the Renard colours typically "were not Northwest Territories white," but Stornoway does appear to have some larger, white gems in the mix.
Ashton originally said it had no reason to expect the value of the Renard diamonds would vary from pipe to pipe, but Mr. Manson expects there probably will be some variation in the results. Stornoway plans to present its grades and diamond values separately for each pipe. In fact, the company may have a carat crop sufficiently large to assess the grade and value characteristics for each geological unit within the Renard kimberlites.
The project is some distance from the nearest road and infrastructure, so Stornoway will need a hefty rock value to support a mine. At last report, the three pipes Stornoway is testing contain just over 21 million tonnes of kimberlite with an average grade of about three-quarters of a carat per tonne. At $100 (U.S.) per carat, Stornoway would have rock averaging $75 (U.S.) per tonne.
That could be enough to support a mine, but the company will need good diamond values from the pipes with the largest tonnages. That would especially be the case with the pipes with lower grades, such as Renard-4, which could contain up to nine million of the tonnes with a grade of just 0.46 carat per tonne.
Stornoway closed unchanged at 99 cents Monday on 176,200 shares.