from Will Purcell
Patrick Evans's Kennady Diamonds Inc. (KDI) fell four cents to $4.71 on 31,000 shares on word it has recovered more diamonds from its Kelvin kimberlite, 10 kilometres northeast of Gahcho Kue in the Northwest Territories. An 18.9-tonne batch of kimberlite processed by dense media separation yielded 48.84 carats, about 2.59 carats per tonne. Another 5.0 tonnes of rock processed by caustic fusion for microdiamond recovery yielded 12.85 carats larger than a 0.85-millimetre sieve -- a nearly identical average of 2.57 carats per tonne. Mr. Evans, CEO, says Kennady continues to estimate that Kelvin and the associated Faraday kimberlite "have the potential" to contain between nine million and 12 million tonnes of kimberlite at between 2.0 and 2.5 carats per tonne. The grades are in line with Kennady's earlier tests, although none of the diamonds were particularly large this time. The largest weighed 0.73 carat and a second weighed 0.61 carat. Previously, Kennady had recovered a 2.48-carat diamond. Nevertheless, all signs suggest that Kelvin and Faraday have diamond grades -- and perhaps diamond values -- comparable with the Gahcho Kue project, where De Beers Canada and Mr. Evans's other company, Mountain Province Diamonds Inc. (MPV: $5.02), are building a mine based on 35.4 million tonnes averaging 1.57 carats per tonne. Those diamonds have a modelled value of $118 (U.S.) per carat, although Mr. Evans loves reminding investors that the appraised value of the recovered gems was much higher: $182 (U.S.) per carat. That pitch is one reason Mr. Evans is regarded as one of the most effective diamond promoters in the world. (Doubters need only examine the stock charts of Kennady and Mountain Province.) At the other end of the valuation spectrum is Eric Friedland's Peregrine Diamonds Ltd. (PGD). Peregrine closed unchanged at 14 cents on 686,000 shares despite its declaring an upgrade to its resource estimate at Chidliak today. The company has an inferred resource of 3.3 million tonnes and 8.6 million carats in its CH-6 pipe, which also holds another 3.2 million to 4.4 million tonnes deemed a target for further exploration, presumably at a comparable grade. As well, Peregrine has significantly boosted its tonnage estimates at CH-7 and CH-44. The former now contains a target for further exploration of 3.7 million to 6.0 million tonnes while the later hosts 1.3 million to 3.2 million tonnes. Peregrine's president, Brooke Clements, called the new estimates "very satisfying," noting that Peregrine had "delivered once again in 2014, efficiently and safely." He could have added "inconspicuously" to that list, as Peregrine shied from touting its growing Chidliak tonnage beyond its current regulatory status, leaving investors to pull out their calculators to accomplish the task. All told, CH-6 may now contain between 6.6 million and 7.7 million tonnes of kimberlite at an average of 2.6 carats per tonne, with a combined 5.0 million to 9.2 million tonnes in the two other pipes that are thought to average about one carat per tonne. In all, Chidliak's tonnage estimates now stand at something between 11.6 million and 16.9 million tonnes, perhaps containing between 22 million and 29 million carats. Those tallies compare well with Kennady's Kelvin estimate, which despite Mr. Evans's enthusiasm, is just a target for further exploration. Kelvin's total carat estimate could fall between 18 million and 30 million carats. Peregrine is also farther ahead on the exploration curve, as a significant part of its estimate is already an inferred resource. Further, it has completed sufficient mini-bulk sampling to derive a CH-6 diamond value at CH-6, currently $213 (U.S.) per carat. Both companies are planning similarly busy years on their projects. Peregrine will collect 250-tonne tests of its three kimberlite pipes this year; Kennady will collect up to 700 tonnes of kimberlite from Kelvin. Any similarities end at their stock charts: Kennady's current market value is $111-million while Peregrine's languishes at just $31.7-million.