Arctic Star seeks more Credit targetsArctic Star seeks more Credit targets
2008-06-03 17:53 ET - Street Wire
by Will Purcell
Patrick Power's Arctic Star Diamond Corp. drilled up more frustration at its Credit Lake diamond project this spring, but the company is not giving up. Instead, it will try a new approach when it launches a new million-dollar drill program next winter. Arctic Star is chasing some of the best mineral chemistry found on any diamond project in the North, but like its predecessors, it has yet to find a single kimberlite.
The latest drill flop has the company's main backers frustrated, but Mr. Power said they are onside with the new plan. Many of the company's more retail shareholders are moving on. Arctic Star's shares recently set an all-time low of eight cents, a pittance compared with their high of $1.38, set five years earlier.
The plan
Arctic Star spent $1.5-million on the Credit Lake project this spring, most of the money going to test a dozen targets. Ten of the features were geophysical anomalies thought to be kimberlites, but none worked out. The latest failure adds to the Credit Lake diamond enigma, as the company has its area of interest down to about 200 hectares.
Mr. Power said the company wanted to keep drilling this spring, but its contractor had other plans and had to go to another project. That leaves Arctic Star with plenty of priority geophysical targets to test. In particular, it is rating three electromagnetic features highly, and there are plenty of magnetic anomalies left to test.
Some of those features will undoubtedly be on the list for the company's next program, but it is now planning a simpler approach. Since all its top geophysical targets have been duds and the area of interest is a zone barely 1,500 metres square, Arctic Star may start poking holes more at random.
The approach has worked elsewhere. After a few years of frustration, Majescor Resources Inc. discovered the kimberlite source of one of its mineral trains in Quebec by drilling a fence of holes up-ice from the head of its indicator train. Mr. Power said Arctic Star would try a similar approach at Credit Lake.
First, the company would likely drill holes into all the topographic lows at the head of the indicator train. Kimberlite is a softer rock than the surrounding granite and glacial movement eroded the tops of the bodies, leaving depressions or small lakes in their wake. With geophysics seemingly no help, the new approach may have a better chance of success. It will also be cheaper, faster and undoubtedly more promotable than trying another round of costly geophysics.
Unfortunately, the topographic depressions are poor places to be drilling in the short Arctic summers. The drill sites all lie in boggy swamps or at the bottom of small lakes. As a result, Mr. Power plans to have prospectors examine the area in close detail, looking for hints of kimberlite to help select targets for winter.
The encouragement
Having no kimberlites to show for over $10-million in exploration since 2004 disappoints Mr. Power and his backers, but earlier gem hunters would have found the source years ago had things been easier. Kennecott Canada Exploration Inc. worked the property for years because of the excellent mineral chemistry found in several indicator trains on the project.
Arctic Star has been looking at the trains in detail, helped by some of the head geologists that worked the play with Kennecott. The new samples showed the indicator swath took a turn not far from their suspected source, hence the new optimism heading into the spring drilling. Mr. Power said Arctic Star still believes the new area contains the source, and that seems likely, unless the big glaciers were slaloming across the tundra.
Arctic Star closed unchanged at 11.5 cents Monday on 390,000 shares.