from stockwatch
Diamond & Specialty Minerals Summary for Oct. 2, 2023
2023-10-02 17:44 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Monday was a mediocre 56-137-117 as the TSX Venture Exchange slumped 13 points to 545. Dr. Michael Gunning's VR Resources Ltd. (VRR) nevertheless regained one cent to 10 cents on 537,000 shares.
The company has received its diamond counts from the two long holes it drilled earlier this year into the big Northway kimberlite in Northern Ontario. VR Resources applauded the results in a long-winded news release late last week even though a toddler could have made the tiny count -- assuming the tyke could see the minuscule gems. No matter, Dr. Gunning claims to be enthused, although the market predictably savaged VR's stock.
Northway, briefly a 34-center in summer after it drilled an unexpected third hole at Northway, sat perched at 15 cents through the dying days of summer. The stock had a rapid two-way dash to 24 cents in mid-September on word it had recovered a single microdiamond from a small amount of kimberlite drilled from the fringe of the pipe. (VR Resources now says that the full core from that discovery hole had been processed and it weighed nearly 140 kilograms.)
VR Resources split the core from the two long holes it drilled this year into the core of Northway. It processed 172 kilograms of kimberlite from the second hole, but no diamonds were recovered. Split core from the last hole, which was the most substantial intersection of the three, returned four microdiamonds from 723 kilograms of material. And so, the company pulled five microdiamonds from a total of 1,035.2 kilograms of Northway kimberlite, which works out to just under five stones per tonne, news that sent the stock as low as 8.5 cents on Friday.
Yes, Ontario kimberlites are notorious for their paucity of microdiamonds, even when the macrodiamond grade is potentially economic. Still, the one hit and the few near misses among those other pipes produced far more micros than has Northway. For instance, De Beers Canada built and operated a billion-dollar mine at Victor, in the Attawapiskat district west of James Bay. The mine ran on a grade of about 23 carats per hundred tonnes, but its microdiamond counts had averaged about 140 diamonds per tonne, not the thousands of gems per tonne that might normally have been expected.
Even Guigues, a big pipe southeast of Northway in northwestern Quebec, averaged 110 micros per tonne for Tres-Or Resources Ltd. (TRS: $0.12) -- and the company is hardly champing at the bit to test the pipe for macrodiamonds. Also in the broad district is the Timiskaming pipe. In the mid-1990s, when the pipe was called 95-2, microdiamond testing of over three tonnes of material returned about 180 diamonds per tonne.
A subsequent bulk sample of the Timiskaming pipe showed the core of the body graded about 15 carats per hundred tonnes -- no surprise as the microdiamonds had a coarse size distribution profile, with about a dozen of the microdiamonds being large enough to be considered commercial-sized gems.
Unfortunately, there is no similar sign of encouragement at Northway, as only one of the micros sat on a 0.106-millimetre sieve with the other four classified as 0.075-millimetre diamonds -- the thickness of a sheet of paper or the size of a fruit fly. (Those annoyances are called no-see-ums for a reason.)
And so, Dr. Gunning, chief executive officer, flung his promotion into high gear. "It's really quite something," he gushed, that Northway has produced microdiamonds in two of the first three reconnaissance drill holes, noting that "both holes are arguably yet incomplete in terms of their vertical and lateral transect of the kimberlite." In other words, he wants you to hope there are better areas within the pipe that have not yet been tested.
"Scale is important," Dr. Gunning enthuses, applauding the fragments of clear, transparent and inclusion-free diamonds that occur across some 600 metres of the pipe and over a 220-metre vertical depth. "Composition is equally important," he then cheered, blathering a mouthful of geologese to make his point that the drill program "underscores the diamond potential at Northway" in relation to the sheer volume of the breccia pipe complex itself.
Further, Dr. Gunning then offers the inevitable promotional deflection away from disappointing news, extrapolating the results of VR's Northway drilling toward the several other geophysical anomalies nearby that the company staked as possible new pipes to drill. And so, while hope springs eternal with promotion, it may be worthwhile to note that Dr. Gunning and his crew had much to say about the results and their meaning, but they said nothing about what comes next.