Paterson's Broken PromiseDo you think an interview like this would excite prospective investors? Damn right! Do you believe Paterson lived up to his promise?
Exciting news and developments throughout 2008 promises President
IIG: I have scoured your website with increasing fascination in doing my research. As I understand it, initially you and your fellow directors financed a substantial portion of the Ticho project out of your own pockets.
RP: That’s right. The original drilling results obtained by the prospector were outstanding. We hit kimberlite on our first drill. We thought we could maintain control of what we, and other experts, thought could be a world class diamond mine. We are public, but we have maintained our original values—we have diluted very little of the stock. In fact much of the financing dollars raised continue to come from our earliest supporters.
IIG: But how could you swing it, drilling is now $500 a metre? We are talking tens of millions of dollars raised privately.
RP: Well you hit on perhaps the key advantage of the Ticho project. Location. Most diamond mines and discoveries are hundreds of kilometers from civilization. Distance equates to cost. And this cost applies not only to finding diamonds but ultimately in the production phase.
IIG: Can you give me an illustration?
RP: It costs SNO, $100 per metre to drill. Other junior diamond exploration companies carrying out exploration in Canada’s North can easily incur costs up to five times more per metre. Another example, DeBeers’ Snap Lake, a mine 200 km north east of our Ticho project will cost over a billion dollars. The Ticho in contrast would cost less than half that amount, simply because we are only 55 kilometers from Yellowknife and have easy, cheap access to roads and power.
IIG: I suppose it follows then that on an operating basis your costs would be lower because of SNO’s proximity to a labour force in Yellowknife.
RP: Absolutely. This fact has to be underscored. There is a lot of talk of increasing costs of exploration, development and production in the mining business. If the commentators are correct. However from day one, our costs have been a fraction of other camps, and continue to be. Our drilling dollar is about five times larger than our competitors.
In fact I believe that SNO had effectively one of the larger drilling programs in the north in 2007 and will continue in 2008.
Q: Is it true your initial drill results were so good that DeBeers offered to pay for a 500 ton bulk sample?
RP: Absolutely, and without any strings attached.
IIG: Your website said you delivered 100 tons of the bulk sample to DeBeers in December. When is the world going to learn the results?
RP: Soon. Agonizingly, soon. One third of the concentrate is now in DeBeers’ South African facility. DeBeers noticed the similarity of our sample to the Snap Lake cores hence they have experience with our particular style of mineralization. Another 2/3 went to the Saskatchewan Research Council lab in Saskatoon. All of it being strictly monitored under industry standard protocols, especially with regards to the security of the bulk sample.
Our hope is that we will have the first results just before the PDAC.
IIG: But what about the other 400 tons?
RP: DeBeers hopes to have it in our hands by late summer and fall.
IIG: SNO has been ripping into the land this past year. Yet there has not been any news. Can you describe what and where of the drilling?
RP: SNO has many claims. Mud Lake is the area where we extracted our bulk sample but it is a fraction of our claims—we have over 15,000 hectares. The area defined by drilling for the Mud Lake sample is 450 metres long in one direction and about 300 metres wide, but it’s open in three directions. We plan in 2008 further delineation drilling on our Mud Lake kimberlite, to step it out and see just how big it is.
And that is the beginning, because as you know kimberlites and diamonds are found in clusters. We have identified by airborne and ground geophysics 17 hot spots for extensive drilling following an extensive till sampling program that indicated new kimberlites.
In addition, on our Red and Hurcombe claim blocks, we plan further extensive till sampling. These are large claims. To gain an insight into the size of the project click on our video on our website or on the shareknownetwork.com
Currently we have two crews on the ground drilling in -45 degree temperatures. For the past summer we were drilling with up to four crews. That is a lot of drilling.
Unfortunately test results have not been received yet because of the extensive back logs at assay labs. We have to wait. But, we will get results consistently over the spring and throughout the summer and fall of 2008.
IIG: So to put this in perspective, you have hit kimberlite which you have bulk sampled and now are hoping to find a second or third kimberlite with the results of your 2007 and current drilling.
RP: Exactly. In addition, we have completed magnetic surveys, and till sampling that have really allowed us to target in on these 17 hot spots where science is telling us Mother Nature maybe hiding her jewels.
IIG: What would happen if the you hit another kimberlite?
RP: We would obviously be a more attractive target to a major.
IIG: And if your lab results are half as good as Snap Lake’s results?
RP: Again we would probably receive an offer from a major. Remember we can be profitable at half the quality of Snap Lake, and we would cost less than half the cost of any other active diamond mine in Canada because of our location.
IIG: Would you sell?
RP: SNO’s team is disciplined and dedicated. We are extremely good at finding and developing diamond properties. We have no experience in diamond production. In short, yes, we would sell.
IIG: Is the company protected from a hostile takeover.
RP: Absolutely, as much as possible . We adopted this position from day one. We believed we had a winner when we hit kimberlite on the first drill, we are even more confident now, and for the sake of all shareholders we plan to maximize our returns.
As we have always said, We believe ‘the future is brilliant for Snowfield’.
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