iamond & Specialty Minerals Summary for July 6, 2023
2023-07-06 17:26 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score on Thursday was a weak 66-107-137 as the TSX Venture Exchange fell seven points to 615. Diamond explorers have been dropping like infantrymen dashing across no-man's land for over a decade, but one new gem hunter that doggedly went over the top this year is still attempting its improbable dash toward victory. Dr. Michael Gunning's VR Resources Ltd. (VRR), down three cents to 28 cents on 622,000 shares, has been back drilling at its big Northway kimberlite target between Kapuskasing and Moosonee in the wilds of Northern Ontario.
VR drilled its discovery hole into Northway last fall, a glancing blow on a big geophysical target, and it went back this spring to send another test into the core of the big feature. VR Resources then dashed off with its rig to drill the nearby Hecla-Kilmer rare earth project but since chose to return to Northway to complete a third hole before sending all the core from the last two holes off for processing.
Dr. Gunning, chief executive officer, says that the core is being sent -- this week, apparently -- to the Saskatoon Research Council laboratory in Saskatoon "to achieve a fulsome compositional study" on the large kimberlite breccia pipe complex -- and to maximize the amount of core from across the complex available for microdiamond recovery. (Nothing kills a fulsome diamond promotion quite as effectively as a diamond parcel that can be easily enumerated by a toddler.)
There is no doubt the target is large, even if what was once described as a magnetic anomaly 1.2 kilometres in diameter is now deemed to be 900 to 1,200 metres across. The first hole tested the southeastern end of the magnetic low, and while the second was to have tested the centre of the feature, Dr. Gunning now says it also tested the southeastern part of the pipe, although about 450 metres to the northwest.
The third new hole, VR Resources says, is being drilled from the same site but angled steeply northward, presumably into the core of the anomaly at last. The area being drilled appears to be associated with the core of the magnetic signature, a region interpreted as directly above a potential kimberlite vent, and as planned, Dr. Gunning says that the three holes will have sampled a horizontal area nearly 900 metres long across the body.
And so, Dr. Gunning believes the new hole will produce the most complete intersection to date, into and through "what we believe to be the central plumbing system of the large breccia pipe complex" based on the geophysical data currently available. (Essentially, the hole should test the perceived throat of Northway, the core area that often yields the best diamond counts in large pipes.) Dr. Gunning urges investors to "remind themselves of the drill core photos and geological context for this discovery" as they assess VR Resources continuing diamond push.
Something else that the market should remember is that both the first hole and the follow-up test, drilled nearly half a kilometer apart, intersected the Northway kimberlite at an eyepopping depth of 240 metres. The good news is that the thick sandstone cover appears to have preserved the kimberlite from erosion, thereby "emphasizing ... the sheer volume potential" for the complex.
Unfortunately, that volume of kimberlite lies beneath nearly one-quarter kilometre of waste material, leaving investors to contemplate the sheer size of an open-pit mine needed to mine the pipe, should it prove to contain economic quantities of diamonds. More likely, VR Resources would be looking at underground mining, which would raise the bar for an economic threshold considerably.
Of course, until Dr. Gunning and his crew get the core samples off to the lab for microdiamond recovery, worries about possible mining are premature. In any case, keep an eye peeled for an update, especially later this year when the microdiamond counts are available. In the meantime, while you are recollecting pictures of the Northway core and VR's geological spin, remember as well that Ontario kimberlites have proven to be microdiamond poor but macrodiamond rich by comparison.
And so, be on the lookout for a larger macro or two when Dr. Gunning gets his diamond counts, whatever the tally. Indeed, one near-universal trait of all Ontario kimberlite promotions has been the comparisons with Victor, the big De Beers kimberlite complex in the Attawapiskat area that was nearly scrapped because of low microdiamond counts, but which became a profitable mine thanks to its unusually coarse diamond size distribution profile for high-quality gems. (Remember, too, that while many an Ontario kimberlite has produced just modest microdiamond counts, to this day Victor remains unique as Ontario's only mine.)