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Diamond & Specialty Minerals Summary for May 4, 2022
2022-05-04 17:14 ET - Market Summary
by Will Purcell
Grenville Thomas and Ken Armstrong's energetic diamond explorer, North Arrow Minerals Inc. (NAR) lost one cent to 11 cents on 2,000 shares. The company is awaiting the diamond counts from the last batch of kimberlite extracted last year from its Q1-4 kimberlite complex near Naujaat in central Nunavut. Meanwhile, closer looks at the results from what it has so far are encouraging, especially so with the coloured fancy diamonds and their coarse size distribution profile.
North Arrow's 1,316-tonne test of kimberlite excavated from the top of the Q1-4 body produced just under 118 carats of diamonds larger than a No. 9 DTC sieve, an effective cut-off of about 0.2 carat. That works out to nine carats per hundred tonnes, and probably to about 27 carats per hundred tonnes had the company recovered all the diamonds down to a No. 1 sieve, the 0.01-carat cut-off that it used for a test seven years ago. That program produced 9.3 carats per tonne on a No. 9 sieve and 28.4 carats per hundred tonnes on a No. 1 sieve.
Both tests produced several multicarat diamonds. The largest gem so far weighed 4.42 carats and a second came close at 4.16 carats. In all, at least five gems topped three carats in weight, and a total of 36 weighed at least one carat. While the 2014 test produced the three largest gems, the test last year produced most of the plus-one-carat stones, which suggests that North Arrow has been unlucky in recovering gems larger than five carats so far -- and in turn, that points to the need for still larger samples.
What is clear at this point is that North Arrow's Q1-4 diamond parcel has a coarse size distribution profile -- sufficiently so that its proportion of one-carat gems ranks among the best in Canada. Indeed, it compares adequately against the Star kimberlite in Saskatchewan, which is arguably been the best of the lot in North America, since Star Diamond Corp. (DIAM: $0.31) began bulk sampling it in 2004.
The Star pipe got its latest look a few years ago when Rio Tinto Exploration Canada Inc. (RTEC) used a Bauer trench cutter to extract over 10,000 tonnes of kimberlite from 10 sites across the mammoth kimberlite. The last six of those tests, completed after RTEC worked the kinks out of its equipment and delivered the best proportions of large diamonds, managed the recovery of 93 plus-one-carat diamonds weighing just under 250 carats, from 7,569 tonnes of kimberlite.
That worked out to about 1.2 one-carat stones per hundred tonnes and to a plus-one-carat grade of 3.25 carats per hundred tonnes, with an average stone size of 2.65 carats. Meanwhile, North Arrow's two tests of Q1-4 produced 36 plus-one carat diamonds weighing just under 70 carats from 2,669 tonnes of kimberlite -- numbers that point to an average of 1.3 plus-one-carat diamonds per hundred tonnes, a grade of 2.52 carats per hundred tonnes and an average stone size of nearly 1.9 carats.
While the Q1-4 numbers fall short of the gaudy results from Star, it is also important to remember the errors inherent in small samples. For instance, the Q1-4 numbers from Naujaat are better than what RTEC delivered in a few of its six individual tests. Further, they compared favourably with a few more of RTEC's first four, and finally North Arrow's latest test was much better than the first taken from the pipe. All of that argues, as RTEC and Star have done, that North Arrow will have to complete a much larger test to prove or kill the project.
There is another factor complicating the assessment of Q1-4, which has two discrete populations of diamonds: the traditional whitish gems, and a minority of fancy yellows and orange gems upon which North Arrow and its co-venturer, Peter Ravenscroft's Burgundy Diamond Mines Ltd., are hanging their promotional hats. The latest tests produced a significantly better proportion of fancy gems, and this time they were the significantly rarer oranges, rather than the yellows that dominated in the 2014 test.
The wait now goes on for the results of several hundred tonnes of Q1-4 kimberlite extracted from the A88 phase. That phase produced a promising result in a 2018 test that sampled 131 tonnes of kimberlite and produced a 5.25-carat diamond along with one of 2.09 carats and one of 1.06 carats, numbers that stack up well in any comparison, at least until North Arrow completes its larger look. As always, the devils lurk in the details, and there are many details yet to come.