by Will Purcell The diamond and specialty minerals stocks box score for Friday was a pleasing 61-44-140. The TSX Venture Exchange gained one point to 580 while polished diamond prices were flat. Eric Friedland and Tom Peregoodoff's Peregrine Diamonds Ltd. (PGD) gained one cent to 17 cents on 720,000 shares. The stock has been slowly ticking upward since the company revealed the diamond values for its CH-7 kimberlite, one of two potentially economic pipes at Chidliak, on Baffin Island.
Dermot Desmond and Patrick Evans's Kennady Diamonds Inc. (KDI), up 38 cents to $3.38 on 58,000 shares, has discovered its third Faraday kimberlite at Kennady North, 10 kilometres northeast of Gahcho Kue in the Northwest Territories. The new kimberlite, Faraday 3, is about 80 metres southwest of where the company had been delineation drilling at Faraday 1. (The three Faraday pipes are about two kilometres northeast of Kelvin, Kennady's most advanced and probably its largest kimberlite.) The first two holes into Faraday 3 encountered about 27 metres of kimberlite in each, in line with the first holes into the earlier discoveries.
Mr. Evans, president and chief executive officer, says Faraday 3 is the fourth kimberlite that his company has discovered at Kennady North over the past three years. The main Kelvin and Faraday kimberlites were discovered, quickly drilled off and eventually abandoned as being too small by De Beers Canada in the early 2000s. De Beers transferred the project to its Gahcho Kue co-venturer, Mountain Province Diamonds Inc. (MPV: $4.91), in the mid 2000s and Mr. Evans spun them off in 2012 as Kennady Diamonds. Since then, Mr. Evans has been having success at disproving the "too small" knock against Kelvin and Faraday, helped in part by his new discoveries.
Meanwhile, the company is pressing ahead with its bulk test of the north lobe of Kelvin. Large diameter drilling began a month ago and 13 of the planned 26 holes are now complete, with over 300 tonnes of kimberlite now extracted. Mr. Evans says that the company has decided to foot the additional cost of keeping one of the two rigs at the site through the year "to ensure that we achieve our target of at least 500 tonnes." At the current pace of drilling, Kennady Diamonds had little choice but to keep the rig, as the ice road is unlikely to last beyond another week or two.
Mr. Evans used the decision to tout his company's plan for next year. He says that with the rig on site, Kennady can start a bulk sampling program at Faraday well before the winter road opens for the 2017 transportation season. This is the first time he has mentioned the test, but it seems a logical next step if Faraday is to become part of the company's mine plan. It will also offer the company another opportunity to produce some of the large, high-quality diamonds that boosted the Gahcho Kue valuations to a promotable $118 (U.S.) per carat and perhaps beyond. The current valuations for the south lobe of Kelvin are about half that value, but so far at least, the market has been willing to overlook the weak valuation, choosing to accept Mr. Evans's comparison with the early results from Gahcho Kue. It is a believable spiel -- as long as Kennady Diamonds soon shows at least a hint of the sparkle that drives his Gahcho Kue promotion.