Encouraging results from its Kennady North diamond project in the Northwest Territories have Kennady Diamonds (TSXV: KDI) doubling its summer drill program, adding a third drill, and rethinking the potential size of the project.
The junior hit a 183-metre intercept of kimberlite in its latest drilling at the Kelvin kimberlite — its longest interval to date at Kennady North.
The interval, which was drilled to the north of Kelvin and outside of the geological model for the kimberlite, could expand the tonnage Kennady is expecting from the project, where a mini-bulk sample is under way.
In a release, Kennady CEO Patrick Evans said the company is rethinking its geological model at the project, 280 km northeast of Yellowknife. The company had previously said it expected Kelvin and Faraday to hold 5-8 million tonnes of kimberlite.
“Delineation drilling to the north of the Kelvin kimberlite is exceeding our expectations,” Evans said in a release. “Based on the results from the first three Kelvin delineation drill holes, we are currently reviewing our tonnage estimate for the Kelvin-Faraday kimberlite corridor, which we expect to increase beyond the current 5 to 8 million tonne estimate."
So far, the current program has returned intervals of between 72.6 metres and 183 metres (not true thicknesses) of kimberlite at Kelvin. The 183-metre interval started at 151 metres depth and ended at 431 metres.
Kelvin and Faraday are both kimberlite dykes of variable width, with Kelvin ranging from a couple of metres to 20 metres in width over a strike length of 1 km. The kimberlites are about 3 km apart, and are roughly 9 km northeast of the Gahcho Kué mine being built by De Beers and Mountain Province Diamonds (TSX: MPV).
Kennady is now aiming to complete 10,000 metres of drilling this summer, instead of 5,000 metres. In addition to collecting drill core for the mini-bulk sample, the junior is conducting delineation drilling at Kelvin and Faraday, and exploration drilling at the MZ and Doyle kimberlites, and at four new exploration targets.
Results from the mini-bulk sample at Kelvin are expected early in the fourth quarter. So far, 7 tonnes of kimberlite have been collected.
The company is hoping to outline a resource of at least 10 million carats — 5 million tonnes grading 2 carats per tonne at a minimum — before the end of the year.
Last year’s 8,500-metre drill program, however, hinted at much higher grades than 2 carats per tonne. A 4.3-tonne sample from Kelvin returned a grade of 5.38 carats per tonne, while a 116-kg sample from Faraday returned a grade of 11.23 carats per tonne.
Kennady is also expecting to release diamond recovery results from a 1-tonne sample of Faraday before the end of summer.
Canadian diamond exploration has picked up recently, thanks in part to Gahcho Kué, which is expected to start production in late 2016, and Kennady Diamonds’ positive exploration results.
Earlier this year, Margaret Lake Diamonds (TSXV: DIA) acquired an option to earn 70% of a land package adjoining Kennady North to the north and west. Randy Turner’s Canterra Minerals (TSXV: CTM) is also set to outline a drill program at its Merlin project, 20 km northwest of Gahcho Kué.
Shares in Kennady Diamonds traded at $5.70 this afternoon. The stock has traded in a 52-week range of $1.60-8.74, with 22.9 million shares outstanding.
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