Arctic Star eager to start drilling 2008-07-16 15:24 ET - Street Wire by Will Purcell A million-dollar drill program is set to start on the Siku property in central Nunavut, which Patrick Power's Arctic Star Diamond Corp. and Mark Kolebaba's Diamonds North Resources Ltd. are sharing. The partners have plenty of drill targets, including two that have Mr. Power particularly enthusiastic. His shareholders could use some of that enthusiasm. Arctic Star's shares recently dipped as low as eight cents. The plan Mr. Power said that Diamonds North plans to test about 30 targets on Siku, starting shortly. The list of anomalies includes two large targets with all the features that put geologists and promoters in giddy moods, and one measures about 14 hectares in area. The top two features lie on the eastern arm of the horseshoe-shaped property, between the southwestern end of Amaruk and the eastern end of the Darby project, which Teck Cominco Ltd. and Indicator Minerals Ltd. share. The partners could quickly have some kimberlites to tout, but getting definitive diamond details could take much longer. Diamonds North will be using a percussion, reverse circulation drill to test the new targets again this year. The lightweight rig is easy to sling from one target to the next and it can quickly test the targets to a reasonable depth. The problem with the equipment is the hammering action of the drill. It produces chips of kimberlite, not core, and many of the bits have the consistency of dust. There is evidence that the reverse circulation rigs can damage many of the diamonds, especially larger stones. Although the partners may know by midsummer that they have a kimberlite, they likely will not know if the rock carries diamonds until after the drill season ends. As a result, testing with a larger core rig would most likely have to wait until next year to produce a reliable set of diamond counts. Mr. Power said the budget for Siku, which is an Inuit word for icicle, was about $1.2-million. Arctic Star had been paying all the bills but it has now completed its spending requirement for a 50-per-cent interest, and the partners will now be sharing the expenses. That is fortunate for Arctic Star, as the company's treasury is getting down to cobwebs. Mr. Power is in the midst of arranging a $1.8-million private placement, but diamond money is hard to come by these days. The encouragement Diamonds North has been producing some hefty diamond counts using its reverse circulation drill on the southwestern part of Amaruk, but its Tuktu and Qavvik pipes are about 100 kilometres northeast of the eastern part of the Siku play. Further, at one time, the Amaruk property included all the ground between Siku and the promising pipe finds on Amaruk, but Diamonds North subsequently dropped that portion of the play. There is no doubt the area is favourable for kimberlites, as Indicator and Teck have their own cluster of pipes on the Darby play, which Siku nearly surrounds. Those discoveries include the 11-hectare Iceberg pipe, which supports expectations the big Siku targets could be large kimberlites. The market's reaction to a big pipe find on Siku may remain muted until the partners can produce copious numbers of microdiamonds. The Darby pipes were just marginally diamondiferous at best. About 400 kilograms of Iceberg kimberlite managed just 10 microdiamonds last year. Arctic Star and Diamonds North are hoping their big targets produce stone counts comparable with some of the Amaruk pipes, such as Tuktu-2. That body yielded gems at rates above 5,000 stones per tonne and Diamonds North is planning a larger test with a core rig as a result. Arctic Star's 153.9 million shares closed unchanged at 9.5 cents Tuesday on 155,000 shares. |