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The Diamond Explorer That Shines Above the Rest

Dave Jackson Dave Jackson, Stockhouse
1 Comment| February 16, 2022

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Most people know the old saying and song, “A diamond is a girl’s best friend.” But when it comes to finding the right exploration company, in the right place, at the right time… that’s an investor’s best friend. And in the rough & tumble diamond exploration space, location, location, location is what separates the contenders from the pretenders.

Enter Vancouver BC-based Arctic Star Exploration Corp. (ADD) (TSX-V.ADD, OTCMKTS: ASDZF, Forum) – a junior natural resource company engaged in the acquisition, exploration, and development of mineral properties around the world… primarily diamonds. The company’s diamond projects comprise of Timantti in Finland, Stein in Nunavut, and its flagship diamond project – Diagras – located in the NWT. The company also holds 17,000,000 shares of the Cap Project, a rare earth carbonatite in BC focused on Niobium, currently in the process of going public.

But it is at Diagras – located about 300 kilometers northeast of Yellowknife – where the company is currently focussing the bulk of its attention, and for good reason. It follows the old mining adage, the best place to find a new mine is in the shadow of an old one. And the shadow cast by mining giant Rio Tinto and its massive operation at Diavik is in close proximity to Arctic Star’s Property. Of note, Diavik has become an extremely important part of the regional economy, employing over 1,000 people, and producing approximately 6-7 million carats (1,400 kilograms) of diamonds annually. And Diagras looks to follow in its footsteps.

(Click image to enlarge)

The Northwest Territory’s “Corridor of Economic Diamond Deposits”

At present, The Diagras Property consists of 58 contiguous claims staked by Arctic Star, with an area of 48,346 hectares. The property is a joint venture with Margaret Lake Diamonds whereby Arctic Star owns 81.5% interest and Margaret Lake 18.5% interest. The property is located in the north-eastern part of the prolific Lac de Gras kimberlite field, 22km NNE of the Diavik diamond mine and 36km east of the Ekati diamond mine in NWT Canada. The Company has verified through research and compilation that the property hosts over two dozen kimberlites, most of them diamondiferous.

The property was discovered by DeBeers with a mag survey in the 1990s. Arctic Star is using new technical and analytical techniques for discovering kimberlite that was not available during the 1990’s “Diamond Rush” at Lac de Gras, NWT which led to the discovery of 4 diamond mines including the nearby Ekati and Diavik diamond mines.

Click to enlarge

For our Stockhouse audience new to diamond mining, historical work on the Diagras Property dates back to 1992 when the area was known as the Hardy Lake Property previously owned and operated by De Beers Canada Inc. (De Beers). De Beers discovered 25 kimberlites that range from 0.2--5 Ha in size on their Hardy Lake property. 19 bodies were evaluated for micro diamonds and 17 returned diamonds. Kimberlite descriptions from research papers indicate kimberlites of the Hardy Lake cluster have similar geology and geophysical signatures to other Lac de Gras kimberlites. None of the kimberlites discovered by DeBeers were of economic interest so they dropped the ground in 2014 which was staked by Arctic Star soon after with intentions of using new exploration strategies not available in the 1990s to look for diamonds.

(Arctic Star - Diagras-Claim-Outlines - Nov 2021. Click image to enlarge)

In the News

Despite the adverse global economic effects of the COVID-19 pandemic, it’s been a busy for Arctic Star, with operational plans in 2022 to be ramped up even more.

On September 29th, the company announced it has received all the diamond results from its spring drilling program where five new kimberlites were discovered, with four of these kimberlites processed by Caustic Fusion. The fall 2021 geophysical survey over the Diagras project has been “designed to generate new geophysical targets for future drill testing and utilizes new technology and data processing techniques that were not available in the 1990s when that last detailed exploration was conducted.”

And shortly before, on September 9th, Arctic Star announced that it has “confirmed identical chemistry to those found in large diamonds from Ekati, Letseng, Lucara, and Victor” at Diagras’ Sequoia Kimberlite Complex. Of note, early Caustic Fusion diamond results are consistent with a large diamond population. Based on the small 505kg sample that came out of Sequoia, the grades are pretty high for that style of deposit and the potential for large stones >50 carats is significant.

The company is organizing a 10-hole drill program on Sequoia to acquire enough sample for the 1st Global Grade Estimate and an additional holes to test new anomalies including new geophysical signatures discovered by the geophysics from fall 2021.

Buddy Doyle, Arctic Star’s VP of Exploration & Company Director, commented:

“These results demonstrate how “noisy” diamond results can be, with higher diamond counts and larger diamonds showing up when we fused the second half of the core! This is not unusual, it’s all down to collecting enough sample. The current results suggest that a kimberlite sample of approximately 5t, ten times the sample we have to date, would produce a smooth diamond size frequency curve from which a first (global) grade estimate could be made. Such a sample should provide further guidance to the probability of really large stones. Drilling using NQ sized core at 100 meter spacing within the Sequoia kimberlite complex planned for Spring 2022 will be able to achieve this. Results to date are encouraging, considering the small sample size, and suggest grades that will fall within the range of kimberlites being mined in the Lac de Gras field, (where pipes with grades of 0.3 c/t to 4.2c/t are being mined or are in mine plans), with a possible added bonus of higher propensity of larger stones as suggested by indicator data. The Sequoia complex is large and the extra drilling will also help define tonnage. More work will tell.”

(Buddy Doyle, VP of Exploration & Company Director. Photo courtesy of Arctic Star Exploration Corp.)

The Timantti Project in Finland

Stockhouse contributor, Stephan Bogner of Rockstone Research, took a deep dive into Arctic Star’s 100% owned Timantti Project – the world’s most recently recognized diamond-bearing kimberlite field. A true elephant country project that the company believes is economical and sustainable.

(Click images to enlarge)

Investors Corner

A diamond may be forever, the life of a mine isn’t. For example, with Diavik commencing operations in 2003, the lifespan of the mine is expected to be 16 to 22 years. That’s why savvy mining investors know that the right new property, in the right location, at the right time is usually a sound investment proposition. According to the company, the diamond mining business model has changed dramatically – particularly in the NWT – when there were about 150 diamond companies were back in the 90’s to about four operating today. Talk about strategic consolidation!

Arctic Star believes its properties at Diagras in the NWT and Timantti in Finland are shining stars offering real value and opportunity in a mining marketplace with diminishing competition but accelerating exploration operations at its global property holdings.

Meet the Team

Arctic Star boasts a highly experienced diamond exploration team previously responsible for numerous world-class diamond mine discoveries.

(Click image to enlarge)

From the CEO

In conversation with Stockhouse Editorial, company CEO Patrick Power discussed a myriad of timely topics, including its flagship project at Diagras, the uniqueness of Arctic Star’s business model, and the long-term vision he has for the company moving forward into 2022 and beyond.

SH: A lot of our audience is familiar with Rio Tinto’s Diavik project in the NWT. How do the kimberlite pipes at your Diagras Project in the NWT and the Timantti Diamond Project in Finland compare?

PP: In Finland, we have found several kimberlites and so far all diamond bearing. The Wolf kimberlites are the most developed; we still don’t understand the size and geometry, they are not pipes. Like Diavik, they appear to be dykes and sills. The White Wolf kimberlite is about 30m across and 80m long, dipping to the north at 30 degrees. The black and grey wolf kimberlites are likely faulted extensions to this stretching 300m, we need to drill down dip to understand the geology better. The deeper and longer they continue to the north the more tonnes we will have. We have found another series of dykes and sills 2km to the north of the Wolves at Vaasa and Karhu. Diavik consists of four pipes being mined at one complex. These four pipes are part of a large cluster of kimberlites, over 200 kimberlites make up the Lac de Gras kimberlite field of which 11 are being mined or are planned to be mined. This is the key concept in our discovery in Finland, we believe we are in a new field of kimberlites and we would like to fly a larger airborne geophysical survey to help find more before selecting the best ones that might be able to be mined.

In Lac de Gras the pipes being mined vary from 0.3 ct/t to 4.2 ct/t and the cost of mining open pit is about $US80/t. This is relatively high due to the extreme remoteness. Finland’s infrastructure is fantastic; you can catch a taxi to the Wolf kimberlites for less than 30 Euros from the airport at Kuusamo. This solves issues such as helicopters, roads, power, etc. meaning your mining costs are cheaper so your grade doesn’t need to be as high to make a decision before going into production. Open pit mining should cost less than $US30/t.

The project in Finland was put on hiatus due to the Covid travel ban and our focus turned to things in Canada which we could access. We took over management of the Diagras JV and made the Sequoia discovery. Travel is now possible to Finland, but we are waiting for the renewal of our exploration permit we applied for, once received we will have the title for 10 more years over the known kimberlites.

We’re letting Finland pause for a little while, which is ok as the success we achieved from last year’s exploration on the Diagras project is compelling. We discovered five new kimberlites of which the largest and containing the most diamonds is Sequoia. As defined by its combined geophysical signature it appears to be up to 1,000m long and up to 300m wide. If this is confirmed by drilling it will be the largest kimberlite in the Lac De Gras field.

The 1st pass of caustic fusion results from the two discovery holes (505kg) demonstrates significant diamond counts with 2 diamonds greater than 0.85mm in diameter. Stones greater than 0.85mm can be considered for commercial grade calculation by CIM definitions. The coarse diamond distribution combined with the unusual indicator mineral chemistry are two lines of evidence this pipe may contain a significant population of large type 2 >50ct gem diamonds, a bulk sample is required to confirm this. The first step is to understand the size, shape, and tonnes of the Sequoia kimberlite complex. Approximately 10 drill holes will give us the advantage of estimating the grade of the various kimberlite rock types that make up the Sequoia kimberlite. A larger bulk sample would follow this work designed to acquire enough sample to determine the average price. Successful completion would lead to a feasibility study. Sequoia lies approximately 30km from the Ekati and Diavik processing facilities. It would seem most logical that the material from Sequoia is going to be processed at one of these locations.

SH: In late September you reported that “All kimberlites discovered in the 2021 program contain diamonds at the Diagras Project.” This may be new to many investors. Can you highlight the results?

PP: When you are exploring for diamonds the most effective way to determine whether the result is good is by plotting them up on a size frequency chart with the size of the diamonds in carats on the X axis and the number of stones of that size per tonne on the Y-axis. Many diamond bearing kimberlites show a smooth exponential curve when you plot the results. When you get a smooth curve it shows evidence that the abundance of smaller diamonds is related to the abundance of larger diamonds.

These curves are used to understand the grade of the kimberlite pipe free of nugget effects and make a prediction of how frequent larger stones will be. The curve also gives an understanding of the error involved in the grade determination. This is what Mr. Doyle used to forecast Diavik’s grade before it went into production. Mr. Doyle has found over 100 kimberlites in Lac de Gras. Sequoia’s size frequency plot, just like the geochemistry is encouraging us to take a larger sample.

SH: Can you give us a synopsis of last year’s Spring Exploration Program of the five kimberlites at Diagras and Lac de Gras and what do you have planned for 2022?

PP: We’re organizing a 10 hole program on Sequoia with 100m spacings. This should give us the tonnage we need (5-8 tons) for Mr. Doyle’s size frequency curve and determine the size and tonnage of the complex. After Sequoia is drilled we can drill the newly discovered anomalies from the fall 2021 and future geophysics due March 2022. We’re going to pick 10 additional new drill targets from the geophysics for a total of 20 holes. Depending on weather conditions the drill program is expected to commence late March and go throughout April and May. The Company is raising $3.4 million, $600,000 Hard Dollars and $2,800,000 Flow Through.

SH: What differentiates Arctic Star from the competition and makes your business model unique?

PP: Our management team has over 30 years of experience successfully exploring for and building mines. Mr. Doyle believes Lac de Gras has the best potential to find the world’s next diamond mine. Our project has two different >$20-billion-dollar mines touching our claim lines. Arctic Star is using new technical and analytical geophysical techniques for discovering kimberlites that was not available in the 1990’s Lac de Gras “Diamond Rush.” So far Mr. Doyle’s new approach to diamond exploration has proven successful in finding kimberlites containing commercial diamonds.

SH: Can you discuss the long-term strategy for the company moving into next year and beyond?

Click to enlargeWe’re organizing a drill program, 10 holes on Sequoia, and an additional 10 holes for new targets. We’re not sure yet how many new targets were going to be drilling because the 46.1% of the property we flew came back with >33 new drill targets. We will be receiving the remaining 53.9% of the geophysics at the end of March. If the 5–8 ton sample from Sequoia proves to be of economic interest it will go to feasibility at which time we would approach the owners of the nearby processing facilities at Diavik or Ekati, it is good to have choices. Feasibility for diamonds is fast compared to other mining commodities; correctly funded we can have a study done before the end of 2023. We would start an environmental base line study to mine this kimberlite in 2022 based on a success in our upcoming spring program.

Arctic Star Exploration Corp. Video Q&A with CEO Patrick Power Sep. 9, 2021

(Click image to play video)

For regular updates, visit

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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