The diamond and specialty minerals stocks box score for Tuesday was a mediocre 69-95-146 as the TSX Venture Exchange fell four points to 597. Leni Keough's Olivut Resources Ltd. (OLV) rose one-half cent to 10 cents on 92,000 shares. The perennially cash-strapped company appears to be hedging its bets at the Seahorse joint venture, north of Great Bear Lake in the Northwest Territories, which it shares with Dr. Ray Davies's Talmora Diamond Inc. (TAI: $0.025).
After years of inaction, the two companies produced diamond encouragement from beach sand samples collected at Seahorse Lake in 2023 -- then followed that with more promise in a subsequent test. In the company's just-released third quarter report, however, Ms. Keough, Olivut's president and chief executive officer, reminds investors that sampling of a large gossan zone returned trace amounts of gold that "may be significant given the limited number of samples collected."
More work on the gossan is needed, Ms. Keough says, "which may be undertaken once additional [cash] is secured ... to obtain more information before arriving at a conclusion." Nevertheless, in her next breath she concludes with a theory, cheering that the "linear gossan zone occurs within the dolomite country rock and likely represents a sulphide bearing fault zone." (Also likely -- the gossan represents a promotional Plan B, as Ms. Keough notes that Olivut's interest in Seahorse covers any minerals discovered, not just diamonds.)
But back to Plan A: The area north and west of Great Bear Lake has produced plenty of diamonds including several macrodiamonds, but without any nearby kimberlite source found for them over the past quarter century of work. Those diamonds, however, were believed to have come a long way from their probable source rock, unlike Olivut and Talmora's new gems.
In the summer of 2023, Ms. Keough and Dr. Davies, Talmora's president and CEO, gushed in tandem over a macrodiamond and a smaller gem gleaned from a 1.8-kilogram batch of beach sand. The larger stone was nearly two millimetres long and almost as wide -- and with sufficient depth to weigh just over 0.026 carat. The find was described as an off-white, transparent, distorted octahedral having minor resorption with inclusions and surface pitting -- a bounty of detail for a gem probably no bigger than some of the coarser bits of sand that held it captive for untold ages.
Whatever the description, the find prompted the two hapless promoters to rush a crew back to the site -- "a field program was expedited," they now deadpan -- to collect larger samples. They were rewarded early this year, when the lab reported that a 323-kilogram batch of heavy mineral concentrate obtained from the sand had produced 18 additional microdiamonds. (The method of concentration was not stated, although much of the material had been concentrated naturally through wave action. Further, nearly all the grains were smaller than 0.5 millimetre, which would limit the chance of recovering more macrodiamonds.)
And so, Olivut's spending on its 50-per-cent-owned Seahorse project has been inching upward. The company spent nearly $300,000 on the project in the year ended Oct. 31, compared with barely $130,000 in fiscal 2023. (In each of 2022 and 2021, Olivut spent less than $5,000 on Seahorse and barely $20,000 during COVID-plagued 2020.) Indeed, the last big push at Seahorse came in 2019, when Olivut spent over $800,000 on a modest drill program to complete its earn-in on the project.
Much of the 2024 spending occurred this summer, when the partners sent a crew to Seahorse to collect a mini-bulk sample of the beach sands from the main target area. The presumably concentrated material will be sent for caustic fusion -- get your wallets out, Ms. Keough and Dr. Davies -- for potential recovery of additional diamonds. The samples are apparently at the lab so the results should become available early in 2025. As well, Olivut says, the crew completed general reconnaissance work "to aid future work program planning."
At this point one hopes that the reconnaissance is leading to drill targets, as Dr. Davies is already cheering Seahorse as the probable origin for 15 diamonds found about 200 kilometres to the west -- lugged there by ancient water currents -- and for three diamonds found 100 kilometres to the north-northeast, pushed to Seahorse by glaciers. Dr. Davies is also more energetic in his planning -- the work this year, he enthused, was but a "prelude to a drill program next year." And so, stay tuned.