RE:RE:RE:Faraday 2 results outFrom Will P:
Dermot Desmond and Dr. Rory Moore's Kennady Diamonds Inc. (KDI), down one cent to $3.40 on 101,000 shares, has the diamond counts from its 262.6-tonne mini-bulk test of Faraday-2, one of several rich pipes at its Kennady North project, 10 kilometres northeast of Gahcho Kue in the Northwest Territories. The rock produced 737.6 carats of diamonds larger than a 0.85-millimetre sieve, or about 2.81 carats per tonne. This was in line with the 2.69-carat-per-tonne result obtained in a much smaller test completed last year.
The result was encouraging, in part because of the high grade, which is better than the Gahcho Kue pipes. It also betters the grade recorded at the larger Kelvin pipe, the flagship kimberlite of the Kennady North project. The greater encouragement lies in the number and quantity of larger diamonds recovered from Faraday-2. The test included 45 diamonds weighing at least one carat, of which two topped four carats and another exceeded three carats. In all, it appears that the one-carat diamonds accounted for perhaps 10 per cent of the total diamond weight. Adding to the encouragement, 12 of the 45 diamonds were considered white, including the 4.72-carat gem, the largest found in the test, and a 2.69-carat stone, which ranked fourth in size.
Dr. Moore, president and chief executive officer for the past year, says he is "delighted with this excellent result" as it confirms the high diamond grade noted in the 21-tonne test last year. He saved most of his enthusiasm for the size distribution and quality of the Faraday-2 gems, which he said were "better than the diamonds recovered from Kelvin to date." Dr. Moore pointed out that Faraday-2 had more white diamonds than Kelvin and he touted the presence of fancy yellow diamonds that extend into the carater class: diamonds that weigh between 0.95 carat and 1.05 carats. He was also enthused that there appeared to be more octahedral diamonds in the Faraday-2 parcel.
A 612-tonne test of Kelvin last year produced 1,278.3 carats, or about 2.09 carats per tonne, but only 44 of the diamonds weighed one carat or more and the largest weighed just 3.43 carats. It was a white, octahedral twin with no inclusions, but many the lesser gems in the test had inferior colour, an undesirable shape or plenty of inclusions to degrade their value. Three of the five largest stones were white, but Kennady Diamonds did not say how many of the 44 one-carat gems were similarly coloured, and no news is never good news on Howe Street. A 442-tonne test the year before at Kelvin produced 892.9 carats from 442.5 tonnes, a grade of 2.02 carats per tonne, and 35 of the diamonds weighed at least one carat. Once again, three of the five largest gems were white, but the company did not reveal the colours of its other larger diamonds.
The Faraday-2 test could bode well for the coming diamond valuation, given the stronger size distribution pattern and the promise of somewhat better shapes and colours. That would be good news, as the diamonds at Kelvin have been modelled at just $63 (U.S.) per carat in the company's maiden resource estimate. Kelvin holds 8.5 million tonnes inferred at 1.6 carats per tonne, which credits the kimberlite with a rock value of $100.80 (U.S.) per tonne. Faraday-2 should do better, perhaps significantly, but unfortunately, the available tonnage appears to be significantly less than at Kelvin. Nevertheless, every carat counts as Dr. Moore looks to make his mine, and Kennady Diamonds is still waiting for the results of a similar test at Faraday-3.