Sudbury Contact drills up new sparkle from olAnother article by Will Purcell at Stockwatch.com
These articles do a great job of putting CDN diamond exploration results into perspective that a layperson can understand.
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Sudbury Contact drills up new sparkle from old pipe
2003-05-16 12:31 ET - Street Wire
by Will Purcell
Sudbury Contact Mines Ltd. continues to find new hope in an old kimberlite, about 16 kilometres to the west of New Liskeard in the Timiskaming region of Northeastern Ontario. The company has another set of diamond counts from the large 95-2 pipe, indicating the presence of a core zone that appears to have the best diamond content of any kimberlite found to date in Northeastern Ontario. That makes the prospect of additional work seem likely, which ranks as quite a comeback for a diamond project that was all but written off by Sudbury Contact several years ago, despite a similar batch of hope from samples that were collected nearly eight years ago.
Taken as a whole, there is little in the numbers to attract attention, as the diamond counts are very modest. The latest diamond counts came from 1,026 kilograms of 95-2 kimberlite that was taken from three distinct facies of kimberlite. The material yielded 174 diamonds, including 27 macro-sized stones, and once again, there were a few larger macrodiamonds in the mix. First impressions can be misleading however.
A hasty first impression may have been the reason that Sudbury Contact's diamond play was shelved and put up for offers in the late 1990s, as the company pursued other ventures. When Sudbury Contact moved into the diamond hunt in Northeastern Ontario in the early 1990s, it was still controlled by Paul Penna, who took over the struggling Agnico Eagle Mines in the early 1960s and made it a Cobalt-area success story.
Mr. Penna was born in Toronto during the boom years that followed World War I. Just 20 years old in 1943, he became an apprentice with a small brokerage, where he sold penny mining stocks for a decade. In the early 1950s, he took his first crack at promoting a mining play on his own, with varying degrees of success. Agnico Eagle was his lasting claim to fame, but some of Mr. Penna's other ventures also met with success, and several of his companies had a close association with his Agnico Eagle flagship.
Sudbury Contact was one of those companies, and in the early 1990s, it had a number of projects on the go scattered across Northeastern Ontario, an area near and dear to Mr. Penna's heart. The diamond hunt in Canada's North was becoming all the rage, and when Sudbury Contact's drills hit kimberlite, Mr. Penna's precious metals company decided to take a crack at a different type of glitter. Sudbury Contact's best result was the discovery of 95-2, which had produced 56 diamonds from about 1.1 tonnes of kimberlite, but after Mr. Penna died of lung cancer in the summer of 1996, at the age of 73, Sudbury Contact quickly seemed to lose interest in the play.
By the spring of 1998, the company was being run by Charles Langston, who had retired as a senior vice-president with the Canadian Imperial Bank of Commerce. Under Mr. Langston, Sudbury Contact was actively seeking a joint venture partner for its Timiskaming diamond project, but he was not having much luck coming up with a partner. Before the year was out, Mr. Langston, who had been an international banker, not a diamond miner, seemed ready to give up on the play entirely. Sudbury Contact was busy merging with one of its sister companies and diamonds were of little concern, and the company laid plans to dispose of the project.
It did not succeed, and that could now be fortunate, as a detailed look at the results suggest something better than what the company dismissed late in 1998 as just "the presence of some microdiamonds." Sudbury Contact has now processed about three tonnes of 95-2 kimberlite, and although the microdiamond content has been modest, there has been an encouraging proportion of larger diamonds in the mix. Most of the hope has come from two distinct facies of kimberlite in the core of the pipe, while a third zone on the fringes of the pipe seems of little interest and has generally helped mask the more encouraging results in the central core of the pipe.
Sudbury Contact has finally published the detailed sieve counts for all of its work over the past year, as the company, now run by Sean Boyd, has apparently realized the promotional potential offered by a coarse diamond size distribution curve, and the numbers confirm the belief that the core of 95-2 has a very toutable diamond size distribution curve. A chartered accountant by trade, Mr. Boyd took over from Mr. Langston in the spring of 1999, although he was hardly new to the company. The 1981 University of Toronto commerce graduate joined Mr. Penna at Agnico Eagle in the mid-1980s, and had served as an officer of a number of Mr. Penna's companies. As president, Mr. Boyd initially seemed to give little thought to the Timiskaming play, but last spring, Sudbury Contact suddenly decided to revive the old play and began promoting the earlier results.
It was more than just an idle tout, as the company has been busy on the ground since then. Sudbury Contact has now processed about 343 kilograms of weathered kimberlite from the top of the eastern portion of the pipe, recovering 60 diamonds larger than a 0.106-millimetre screen. A full one-third of those diamonds were large enough to remain on a 0.300-millimetre mesh, and 15 per cent of them clung to a 0.425-millimetre sieve. Two diamonds were large enough to remain on a 0.85-millimetre screen, which is the minimum typically used in a mini-bulk test. Things were nearly as good with the main kimberlite facies that lies beneath the weathered zone. So far this year, 1,120 kilograms of material has produced 151 diamonds, and 37 of them were larger than the 0.300-millimetre screen, or about one-quarter of the entire parcel. A dozen stones remained on the 0.425-millimetre screen, or about 8 per cent of the diamonds, and the 0.85-millimetre sieve recovered four stones.
All that suggests that the top layer yielded the best results, but that may well be a statistical oddity produced by such small samples. As a result, combining the diamond counts from the two facies may be more meaningful at this time. Based on the combined numbers, the 95-2 samples contained 211 diamonds in 1.46 tonnes of kimberlite, or about 145 stones per tonne. More than 27 per cent of the diamonds remained on a 0.300-millimetre sieve, and 10 per cent of the stones remained on a 0.425-millimetre screen.
Those proportions compare well with most diamond deposits for which similar sieve data are available. Northern Empire Minerals Ltd. and Stornoway Ventures Ltd. have crafted an effective promotion out of the diamond size distribution of their AV-1 discovery in Nunavut. The initial batches of samples revealed about 1,450 diamonds per tonne, with just under one-quarter of the diamonds larger than a 0.300-millimetre screen and 12 per cent big enough to cling to a 0.425-millimetre mesh.
Better yet, is a comparison with Snap Lake, where Winspear processed about 1.2 tonnes of material early in 1999. Winspear used a 0.15-millimetre cutoff but still came up with about 3,800 diamonds per tonne. A bit more than one-quarter of the Snap Lake remained on a 0.300-millimetre screen, compared with about 35 per cent at 95-2. About 1 per cent of the Winspear diamonds remained on a 1.18-millimetre screen, which matched the result at 95-2. Snap Lake was subsequently bulk tested and modelled to have a grade of nearly two carats per tonne. Although the comparable microdiamond content at Snap Lake was more than 30 times what it was at 95-2, a more favourable size distribution curve would improve the ratio at progressively larger diamond sizes, and it is far larger diamonds that are actually mined and carry most of the value.
Offering more hope is the fact that the earlier samples has seemed encouraging as well, although any direct comparison is difficult, due to variations in diamond recoveries in the smallest sieve classes. The key aspect of that earlier work is that a 0.139-carat diamond was recovered from about 670 kilograms of material from the main kimberlite zone, and a 0.025-carat diamond was found in about 212 kilograms from the weathered layer.
In all, Sudbury contact has processed about 2.2 tonnes of material from the two key kimberlite facies on the eastern portion of 95-2, and it has recovered at least 0.28 carat of diamonds that were large enough to remain on a 0.85-millimetre screen, and that works out to a diamond content of about 0.13 carat per tonne. Such a sample is far too small to provide a representative diamond grade, but the amount of kimberlite processed is comparable with the first batches processed from most of the Ashton Mining of Canada discoveries, and those of several other explorers.
The indicated diamond content of the 95-2 samples could be far different than the actual grade of the pipe. The presence of the one larger diamond may have skewed the indicated content upward, but that might be balanced by the tendency for larger samples to produce better grades, especially with deposits containing modest quantities of diamonds and coarse distribution curves.
Meanwhile, the first samples from the western portion of the pipe are starting to dribble in. Sudbury Contact has processed just over 250 kilograms from the zone, recovering 82 diamonds, or about 320 stones per tonne. That is more than double the rate in the eastern section, but the size distribution was decidedly less promising, due to an abundance of microdiamonds in the smallest sieve class. The sample size is too small to read much into the results however, especially since the material appears consistent with the kimberlite present in the eastern portion of the pipe. As well, there appears to be less country rock embedded within the kimberlite, which is a good sign.
A mine is still a Timiskaming long shot, but Sudbury Contact now thinks enough of 95-2 that it plans to take a mini-bulk sample from the eastern portion of 95-2, extracting up to 500 tonnes of material. That could be followed by a second test, on the western portion of the large pipe, which is now believed to cover about five hectares in all and have fairly steep walls.
The initial mini-bulk sample could provide enough diamonds to provide some rough clues about the value of the gems, although it will take far larger samples to provide any definite answers. The Victor pipe that is being advanced by De Beers in the Attawapiskat region of Northern Ontario contains diamonds worth about $150 (U.S.) per carat, and if a Timiskaming pipe contains stones of such value, it would be potentially economic with a grade significantly less than the 0.4-carat-per-tonne figure at the remote Victor site.
As a result, the Sudbury Contact Timiskaming diamond play should continue to be in the news in the coming months, and if larger samples confirm the early glimmers of hope, a still larger sample could be taken the following year.
Investors seem somewhat skeptical however. Sudbury Contact dropped 15 cents on Thursday, closing at $3.10.