2024-06-18 14:01 PT - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score for Tuesday was a ho-hum 78-72-160 as the TSX Venture Exchange rose two points to 575. Dr. Michael Gunning's VR Resources Ltd. (VRR) rose one cent to 7.5 cents on 338,000 shares. The company has uncertain plans for its Northway diamond project, between Kapuskasing and Moosonee in Northern Ontario, which has slipped in priority over the past year after diamond counts from three holes drilled into the large pipe disappointed investors last year.
Indeed, the company now lists Northway third among three properties on its books -- and one of the three has already been sold. (Closing the sale of the Hecla-Kilmer rare earth project, not far from Northway is top priority. The definitive sale agreement, signed in March, has VR Resources getting $1-million in cash and four million shares of the purchaser, Neotech Metals Corp. (NTMC).)
Next on the list is a newer prospect, the New Boston copper-molybdenum-silver porphyry project in Nevada. VR Resources drilled one hole into the target earlier this spring and a second hole was nearing completion at last report. A few more are possible, as the company said it planned 1,500 metres of drilling across two to four holes. (The first hole ran for 600 metres, encountering a considerable amount of geological jargon -- highlighted by some phases of stockwork quartz veins and disseminated vein-hosted sulphide.)
As for Northway, Dr. Gunning, chief executive officer, says that his company does have an exploration plan for the project this year -- it just ranks fourth on the to-do list. VR Resources says it will assess new airborne magnetic surveying technologies to "refine targets on properties peripheral" to the Northway project, continuing the company's overriding strategy on the Kapuskasing shear zone. (That strategy has essentially been to drill whatever targets it finds and keep an open mind about what it finds.)
VR Resources staked Northway two years ago as a direct extension of its Hecla-Kilmer rare earth hunt. Its first hole, drilled in the fall of 2022, nicked the edge of a kimberlite pipe at a depth of about 240 metres, and since the hole tested the fringe of the circular target, Dr. Gunning and his crew gushed about the probability they had encountered a huge and intact pipe lying beneath sedimentary cover. The corporate enthusiasm, augmented by investor exuberance -- the company had a small cadre of Internet faithful -- helped propel the company's stock to a 34-cent high by mid-2023.
Unfortunately, the diamond counts from the fringe hole snuffed out the promotional flames and the results from the two holes drilled into the throat of the body turned the embers black. A small amount of kimberlite in the first hole -- about 140 kilograms -- produced a clear microdiamond that was deemed to be a fragment of a larger stone -- news that kept at least a flicker of optimism alive.
That ended a few weeks later, when over 170 kilograms of rock from the second hole proved barren, while a 723-kilogram batch of core from the third hole delivered just four microdiamonds. And so, just over one tonne of Northway kimberlite produced just five diamonds -- a rate of five stones per tonne, which is more than an order of magnitude less than what the low-grade Victor pipe had produced. Worse, Victor was economic because of its coarse size distribution profile, but the best that Northway could muster is a single microdiamond large enough to sit on a 0.106-millimetre sieve -- about as wide as a strand of hair.
Oh, to be sure, Dr. Gunning put his best spin forward in touting the counts: "It is really quite something," he gushed, noting that Northway "produced microdiamonds in two of the first three reconnaissance drill holes ever put into the large breccia pipe complex." Further, he enthused, "both holes are arguably yet incomplete in terms of their vertical and lateral transect of the kimberlite."
In other words -- and Dr. Gunning quickly found those words -- "scale is important" to the story, as fragments of clear, transparent and inclusion-free diamonds occur across some 600 metres of the breccia pipe complex and over 220 metres vertically, starting from the crater facies at the top, he said. They do, but in quantities far too rare to support even a hint of lingering chat room fervor. And so, what is left of the Northway promotion looks to centre on the other targets subsequently staked. With luck, VR Resources will find more big pipes, but much closer to surface and with much higher diamond counts.