from will purcell Patrick Evans's Kennady Diamonds Inc. (KDI), up two cents to $5.42 on 8,000 shares, has two more big kimberlite hits at Kelvin, a complex pipe at Kennady North, 10 kilometres northeast of Gahcho Kue and 250 kilometres northeast of Yellowknife. One intersection measured nearly 180 metres, the other topped 100 metres, but the two tests are unlikely to add to Kennady's tonnage estimate. Mr. Evans, CEO, says the longer drill hit "confirmed the existing geological model," while the other "expanded the existing model marginally." Nevertheless, the two new holes will provide more confidence in the current model and support a maiden resource calculation for the Kelvin and Faraday kimberlite complex.
Kennady is still primping its maiden for a coming-out party, expected late this year. The company has two drills operating at the northern end of Kelvin and four holes are now complete. Another 16 holes of delineation and infill drilling are expected before the program wraps up in a few weeks. The drills will then move northeast, where they will test Faraday-2 this summer. In the meantime, Mr. Evans has been promoting a steadily increasing range of tonnages at Kennady North. His latest estimate, 10 million to 13 million tonnes, appears ripe for another upgrade as one of the first two holes produced considerably more kimberlite than expected. That, he said would "positively impact the Kennady tonnage estimate."
Mr. Evans originally touted a target of five million tonnes for Kelvin and Faraday when he set out to delineate the kimberlite complex two years ago. A series of drill successes since then has perhaps tripled his target, which increases the chance of Mr. Evans having a stand-alone mine in the shadow of his Gahcho Kue mine, which is currently being built by his Mountain Province Diamonds Inc. (MPV: $5.09) and De Beers Canada. Without a costly processing plant of its own, Kennady North would presumably have to wait until the Gahcho Kue pipes are mined out in the 2030s before the Gahcho plant would be available.
With 15 million tonnes of kimberlite averaging 2.5 carats per tonne -- a grade expected to be confirmed or perhaps exceeded by the 436-tonne mini-bulk test Kennady collected this winter -- the company may have well over 30 million carats of diamonds already delineated. The only missing factor in the Kelvin-Faraday equation is the diamond value. So far, all signs point to the Kennady North diamonds being roughly comparable with the modelled value at Gahcho Kue, $118 (U.S.) per carat at last report. If so, the Kennady North project, which De Beers transferred to Mr. Evans's company free of charge several years ago, could contain $4-billion (U.S.) worth of gems. Kennady North still has a lot of work to do before it can prove the point, but the company's stock chart suggests investors are betting it does.