Streetwire
by Will Purcell
Mountain Province Diamonds continues to come up with promising results from the Kelvin Lake and Faraday Lake region, roughly 10 kilometres to the northeast of Kennady Lake, where the company and its key partner, De Beers Canada, hope to build yet another big Canadian diamond mine. The Gahcho Kue project has been on hold for the past few years, as De Beers has been trying to come up with the necessary rate of return that would justify advancing the project to feasibility. An improvement in the value of the diamonds or a reduction in the operating costs would help, but the identification of additional amounts of rich kimberlite would also enhance the bottom line of the project, and several small bodies in the Kennady and Faraday areas could do the trick.
Jan Vandersande, Mountain Province's president since 1996, was suitably enthused over the latest results, which he described as "some of the best microdiamond results I have seen." Glowing words about a company's diamond counts area an all too common commodity in the gem hunt, but the latest batch of numbers from five kimberlite bodies would seem to support Dr. Vandersande's enthusiasm.
The enthusiastic Dr. Vandersande is an academic who turned his studious bent to the business of exploration after serving as an associate professor at both Cornell and Witwatersrand, where he also conducted research into the conductivity of rocks and minerals, including diamonds. Later, he worked as a mining analyst and scientific consultant, before he assumed the top job at Mountain Province, just after the company had made its first big find at Kennady Lake.
As an academic, Dr. Vandersande followed a master's degree in physics from Cornell University with a doctorate in solid-state physics from the University of the Witwatersrand in South Africa, with a thesis on the properties of diamonds. His thesis work brought him his first contact with De Beers, through the diamond giant's research laboratory. Since then, Dr. Vandersande's career has taken a number of turns, but diamonds apparently have played a role in all of his roles.
Since joining Mountain Province the California-based Dr. Vandersande has been trying to turn the AK-5034 deposit into a Canadian diamond mine, and although there have been several new finds in the years that followed, the pace has been painfully slow, much to the chagrin of notoriously impatient speculators.
The new finds clearly new sparkle in the form of some toutable diamond counts. The best of the results came from a 65-kilogram batch of rock collected from the Faraday-2 body, which is about 520 metres to the southwest of the original Faraday find, which in turn is about 12 kilometres to the northeast of Kennady Lake.
The small sample produced 194 diamonds that were large enough to remain on a 0.10-millimetre sieve, and the size distribution of the parcel was impressive. There were 56 stones large enough to remain on a 0.30-millimetre mesh, accounting for nearly 29 per cent of the entire parcel, and 35 diamonds, or 18 per cent of the entire collection, were large enough to cling to the 0.425-millimetre sieve. Those recoveries rank among the best that have been produced from any deposit, since reporting the detailed sieve size results has become standard.
As a result, it was no surprise that Faraday-2 contained some much larger stones. One of the diamonds remained on the 2.36-millimetre sieve, weighing about 0.40 carat. That might seem a fluke, but there were two more diamonds were recovered that had remained on a 1.70-millimetre screen, and another two that remained on a 1.18-millimetre sieve. An additional six stones, or 11 in all, were large enough to be recovered by the 0.85-millimetre mesh, which Ashton Mining of Canada uses for its mini-bulk sampling programs. That is an impressive result for such a small sample.
Although the Faraday-2 sample seemed to steal the show, there was a considerable amount of hope delivered by some other batches as well. The partners also processed 65 kilograms of material from Kelvin-1B, which is about 50 metres to the west of the original Kelvin find, about nine kilometres to the northeast of Kennady Lake. The kimberlite produced 203 diamonds, which actually was more than what had come from the Faraday-2 body.
The size distribution of the recovered diamonds was only slightly less impressive than the Faraday-2 result, and it also ranks among the best of the results obtained by any diamond explorer over the past year at least. A total of 50 gems remained on the 0.30-millimetre screen, just under one-quarter of the parcel, and 26 stones, or nearly 13 per cent, had remained on the 0.425-millimetre sieve. Two of the stones were large enough to be recovered by the 1.18-millimetre mesh, and one of those stones weighed 0.09 carat, helping to confirm the size distribution promise at Kelvin-2.
Yet another promising result was delivered by the Faraday-1B body, which is 100 metres southwest of the original Faraday find and about 420 metres northeast of where the rich Faraday-2 sample was collected. De Beers processed 33 kilograms of material from Faraday-1B, coming up with just 26 diamonds, but once again, the size distribution of the sample was quite impressive.
There were five diamonds that remained on the 0.30-millimetre sieve, or just under 20 per cent of the sample, and two stones, or a bit less than 8 per cent had clung to the 0.425-millimetre mesh. Those results were significantly lower than what had come from the two best samples, but the small size of the sample probably played a role in the poorer size distribution of the Faraday-1B sample.
Nevertheless, the small batch of kimberlite produced one stone that remained on the 1.18-millimetre mesh, and there is no reason at this stage to expect that there is any real difference between the diamond content of Faraday-1B and Faraday-2 or Kelvin-2.
The two remaining samples failed to deliver any larger diamonds, but that would be no surprise, given the tiny size of the samples. De Beers processed 16 kilograms of kimberlite from Kelvin-2, about 120 metres to the south of the original Kelvin find, coming up with 34 diamonds.
Although none of the diamonds were large enough to remain on a 0.60-millimetre screen, there were seven that were recovered by the 0.30-millimetre mesh, accounting for just over 20 per cent of the parcel, and the three diamonds retained by the 0.425-milliemtre sieve represented about 9 per cent of the Kelvin-2 diamonds. The combination of those results and the tiny sample size suggests that there may be no appreciable difference between the Kelvin-2 and Kelvin-1B results.
The same may be true for Hobbes-2, about 370 metres south of the original Kelvin find. De Beers processed just 16 kilograms of rock, coming up with 13 diamonds. That parcel included three stones large enough to remain on a 0.30-millimetre sieve, or just less than one-quarter of the parcel, and about 8 per cent of the stones were recovered by the 0.425-millimetre screen. Once again, there is no reason at this stage to suspect that the result is materially different than any of the other finds, due to the sample size and the recovery results.
In fact, the latest samples seem quite comparable with, or even better than the earlier results from the original Faraday and Kelvin bodies. De Beers only processed about 40 kilograms of material from Faraday-1A, but it ran about 184 kilograms of kimberlite from Kelvin-1A through its lab, coming up with 446 diamonds. Of those, 69 had remained on a 0.30-millimetre mesh, accounting for about 16 per cent of the parcel, and of the 74 diamonds recovered from Faraday-1A, 17 stones, accounting for 23 per cent of the parcel, had been recovered by the 0.30-millimetre screen.
The new finds also stack up well in a comparison with the Hearne and AK-5034 pipes. From 128 kilograms of rock taken from Hearne, 75 of the 378 recovered diamonds had remained on the 0.30-millimetre mesh, accounting for about 20 per cent of the parcel. Meanwhile, a 160-kilogram batch from AK-5034 had delivered 498 diamonds, and 74 of them had remained on the 0.30-millimetre screen, or about 15 per cent of the parcel.
Based on those numbers, the latest finds would seem richer than Hearne or AK-5034, but it is not known precisely how representative were the detailed Hearne and AK-5034 results offered up by Mountain Province. Nevertheless, there is good reason to suspect that most of the bodies in the Faraday and Kelvin regions have diamond grades roughly comparable with the Kennady Lake bodies, probably somewhere between one and two carats per tonne. If so, that could be great news for the prospects of a Gahcho Kue mine.
As a result, exploration in the Kelvin and Faraday regions will be a priority for De Beers and its partner this spring. Dr. Vandersande said that a drill program would begin in March, with plans to test a number of new targets in the area, as well as additional delineation on the existing finds.
Just how much drilling will be completed will depend upon the results. Dr. Vandersande said that the program would be success driven; if things seemed good, the partners would keep drilling, but if a hole missed, they would likely quit work on that particular target.
That approach has likely accounted for the slow pace of exploration in the Kelvin and Faraday regions to date, which produced the Faraday find in 1999 and the Kelvin discovery the following year. Additional drilling had to wait for the diamond counts from each body, and the region seemed to drop on the priority list a bit as De Beers pursued the MZ Lake discovery.
The small size of the Kelvin and Faraday bodies was likely a factor in the slow pace of work in the region as well, but Dr. Vandersande is now hopeful that there could be an adequate amount of kimberlite to make things interesting. Determining just how much kimberlite is present will require a major delineation drill program, but there is reason to hope that the existing finds could contribute a few million tonnes of potentially economic rock, with the prospect of finding more.
Some of the targets that will be drill tested next year appear to have larger dimensions than those that have been tested to date, and as well, the existing finds could deliver some pleasant surprises in the form of blows along what appear to be a series of kimberlite dikes.
The chances of that seem good. Dr. Vandersande described the original Faraday find as a blow, along with the first Kelvin discovery, and the dimensions of some of the apparent dike intersections appear sufficient to warrant a closer look as well. As a result, it could once again be a busy spring on the southeastern corner of the AK property, as De Beers and its partners try again to come up with the economics required to support a diamond mine at Gahcho Kue.
Investors seemed pleased with the results. Mountain Province closed up 32 cents on Tuesday and added another three cents Wednesday, to close at $1.80. Camphor Ventures, the smaller partner on the play, added 12 cents Tuesday and was unchanged Wednesday, at 56 cents.