will p on SPQ in wawa
Spider spins new plans for Wawa gem hunt
Spider Resources Inc SPQ
Shares issued 156,903,479 Jun 15 close $0.145
Wed 16 Jun 2004 Street Wire
by Will Purcell
The Wawa diamond hunt still has a few sparks of life left in it. Spider
Resources Inc. and KWG Resources Inc. plan to collect two five-tonne
mini-bulk samples from a property just to the northwest of sites that were
tested by Pele Mountain Resources Inc. and Band-Ore Resources Ltd. Those
larger tests failed to produce much encouragement, as the minuscule grades
failed to match the market's expectations and interest in the gem prospects
of the Wawa region has been declining. Two diamond majors have abandoned
option deals in the area over the past year, adding to the challenge of
promoting Wawa gems. Nevertheless, there could soon be a few new mini-bulk
tests completed, leaving the struggling play with at least a glimmer of
hope.
Two of those tests will come on the property that started the speculative
interest in Wawa diamonds in 1996, when Spider and KWG picked up their
interest in their play after two prospectors had come up with six diamonds
from 18.1 kilograms of rock.
Spider and its partner frequently touted their Wawa play over the next few
years, coming up with a series of diamond recoveries that showed an
abundance of microdiamonds, but relatively few macro-sized stones. In all,
Spider and its partner processed about 2.2 tonnes of rock comprising small
prospecting samples gathered from across the 4,500-hectare property, coming
up with 1,017 diamonds.
That worked out to about 410 stones per tonne, which provided some
promotional appeal, but the proportion of macrodiamonds was not as
favourable. Just 110 of Spider's stones were longer than 0.5 millimetre, or
about one-ninth of the entire parcel, and only four of the diamonds
measured at least one millimetre in length.
Those recoveries did not appear to bode well for the play, but there was a
large degree of variation in the samples. For instance, just over half of
the diamonds had come from batches that weighed just 520 kilograms, or
about one-quarter of the entire amount of rock that had been processed.
That smaller parcel had accounted for about three-quarters of all of the
macros recovered, and it contained all of the one-millimetre diamonds.
The variability within the samples was highlighted by one 15-kilogram batch
that had produced 59 diamonds, a rate of nearly 4,000 stones per tonne.
There were no less than 22 macrodiamonds in the parcel, which was an
encouraging rate.
Spider's Wawa play began to sprout cobwebs in the late 1990s, when its
partner became mired in the financial turmoil that swirled around promoter
Pierre Gauthier and his stable of companies, which included KWG and Spider.
Spider was not directly involved in the mess, but it suffered along with
KWG, and investors were quick to lose interest in the company's flagging
diamond promotions.
Still, Spider pressed on. It sorted through its diamond results and came up
with three sites that seemed favourable for mini-bulk testing. In 2001, the
company gathered small batches of rock for macrodiamond recoveries. The
first sample, BK-1, weighed about 2.4 tonnes and was collected near the
eastern boundary of Spider's property. The rock produced a single stone
that weighed just 0.0033 carat, for a sample grade of 0.0014 carat per
tonne.
That was far from promotable, but things were somewhat more promising about
one kilometre to the west. Spider collected about 2.5 tonnes of material at
BK-2, and the rock produced eight diamonds that weighed a total of 0.0282
carat, helped along by three stones that were longer than one millimetre.
The indicated grade of 0.01 carat per tonne was nearly an order of
magnitude better than what the first sample had produced, but it remained
another order of magnitude below what might realistically be needed to
sustain a diamond promotion in the Wawa region.
The third sample, BK-3, had come from a site just east of BK-2. It produced
the best result of the lot, although the difference was largely contained
in a single stone that weighed 0.0325 carat. That diamond was nearly two
millimetres long and it exceeded 1.4 millimetres in all three dimensions,
making it the largest stone recovered by Spider in the Wawa region.
About 2.7 tonnes of kimberlite from BK-3 had produced 11 diamonds with a
total weight of 0.0654 carat, which suggested a sample grade of 0.024 carat
per tonne. Eight of the diamonds were longer than one millimetre, and
although just two of them exceeded that mark in two dimensions, several
others had come close.
In all, Spider's three tests weighed about 7.5 tonnes, and the material
delivered 20 diamonds that weighed a total of 0.095 carat, which indicated
an average diamond content of about 0.013 carat per tonne. The 0.325-carat
diamond in the BK-3 sample accounted for about one-third of the weight of
the entire parcel.
The Spider tests fell short of the marks set by a few mini-bulk tests
completed by some of its rivals. In 2001, Band-Ore produced a sample grade
of 0.05 carat per tonne from about 12.5 tonnes of rock taken from a site on
its Engagement zone, about seven kilometres to the east-southeast of
Spider's property.
The Band-Ore sample yielded 30 diamonds larger than a 0.85-millimetre mesh,
and the total parcel weighed 0.607 carat. A significant portion of that
weight was contained in a single stone, which weighed a bit over
one-quarter carat. That diamond proved that the Wawa region could deliver
stones of a commercial size, but the find might also be attributed to a
stroke of good luck.
In any case, Band-Ore's result intrigued Kennecott Canada Exploration Inc.,
which signed an option deal covering Band-Ore's GQ property later that
year. For well over a year, Kennecott poked away on the project, coming up
with a series of diamond counts that continued to deliver an abundance of
microdiamonds, but with a size distribution that seemed unusually steep.
Kennecott subsequently collected three mini-bulk tests, but the exploration
arm of Rio Tinto abandoned its option deal before they had been processed,
leaving Band-Ore to make alternative arrangements.
De Beers Canada Corp. ultimately gave the company a helping hand, and the
three Band-Ore samples were completed this spring. In all, about 54.2
tonnes of GQ rock were processed, and the material yielded 21 diamonds
larger than a one-millimetre mesh. The stones weighed just 0.545 carat,
which indicated an average grade of 0.01 carat per tonne.
The best result came from an individual batch that weighed 22.1 tonnes and
delivered 12 diamonds with a total weight of 0.375 carat, which implied a
sample grade of 0.017 carat per tonne. This time out, there were no
particularly large diamonds in the mix, which might have added a bit of
promotional spark to the result. The largest diamond likely weighed a bit
less than 0.10 carat.
Pele Mountain also did not have much luck with its larger tests, although
the company's samples have delivered a few toutable gems. A few years ago,
the company processed three batches of material from its Cristal outcrop,
which is about two kilometres to the northwest of the Engagement zone and
about five kilometres east of Spider's sample sites.
In all, a total of 123 tonnes of Cristal rock was processed, and it
produced 3.7 carats of diamonds, indicating an average diamond content of
about 0.03 carat per tonne. The haul included a 0.72-carat stone that Pele
dubbed its "Big Goose," which provided some promotional grist, aided by a
modelled diamond grade of about 0.06 carat per tonne for the Cristal
sample.
The Wawa region finally delivered a mini-bulk grade in excess of 0.1 carat
per tonne in the summer of 2002, when about 4.5 tonnes of material from its
Genesis site yielded diamonds weighing a total of 0.52 carat, which implied
a grade of nearly 0.12 carat per tonne. That was encouraging, and the final
tally was not skewed by the presence of any particularly large diamonds.
The largest stone weighed just 0.085 carat.
Pele and De Beers completed a 210-tonne test of Genesis earlier this year,
but there was not an abundance of hope in the result, beyond the presence
of a 0.9-carat diamond. In all, the Genesis samples yielded 64 diamonds
with a total weight of 2.24 carat, which indicated a grade of just 0.01
carat per tonne.
After that less than stellar result, along with its peek at Band-Ore's test
result, De Beers walked away from its option arrangement with Pele, joining
Kennecott on the sidelines. That has left the Wawa diamond juniors on their
own, and much of the market interest in the Wawa diamond play has
evaporated. Pele's shares have dipped below 20 cents of late, and
Band-Ore's stock is now trading below the 30-cent mark. As a result, it
will take some promotable news from some mini-bulk samples to trigger new
interest in the Wawa diamond projects.
Band-Ore and Pele have not had a great deal to say about their Wawa diamond
projects of late, but another of Spider's neighbours is touting plans to
complete two 100-tonne mini-bulk tests this year. Arctic Star Diamond Corp.
and Oasis Diamond Exploration Inc. have laid plans to collect the samples
from their Enigma East and Dogma occurrences, which are a few kilometres to
the south of Spider's property.
The initial diamond counts from the two showings were nothing special, but
hope springs eternal with the Wawa play, and the larger tests will present
a clearer picture of their diamond content. Meanwhile, Spider and KWG's
plans to collect two five-tonne tests would seem to pale in comparison with
its rival's program, but their effort could still produce a promotable
result, especially if a larger diamond is found in the process.
Spider gained 1.5 cents on Tuesday, closing at 14.5 cents, while KWG added
one-half cent, closing at 21 cents.
(c) Copyright 2004 Canjex Publishing Ltd. https://www.stockwatch.com