Around the world: The latest news from 18 Canadian-listed diamond plays

Peregrine Diamond's Chidliak projectAt Peregrine Diamonds' Chidliak project, in Nunavut. Credit: Peregrine Diamonds

Alto Ventures

In April, Alto Ventures (TSXV: ATV) reported that 12 of 37 till samples taken at its West Fisher claims, 12 km northwest of North Arrow Minerals’ Pikoo project in Saskatchewan, contained chromium-rich chromite grains. A subsequent high-resolution airborne magnetic survey identified 16 magnetic targets, several of them associated with down-ice trends of kimberlite indicator mineral (KIM) dispersion grains in tills.

Just east of Pikoo, at Alto’s GEFA property, sampling has identified multiple KIM dispersion trains. An airborne magnetic survey at GEFA early this year identified at least 16 kimberlite targets clustered in two areas of the project.

Alto is earning a 100% interest in West Fisher and 60% of GEFA.

Arctic Star Exploration

In February, Arctic Star Exploration (TSXV: ADD) acquired the1,056-sq.-km Stein project in Nunavut, drawing on existing exploration data in the public domain.

Past surveys identified circular magnetic anomalies up to 200 metres in diameter at the up-ice terminus of KIM trains. Arctic Star is planning a work program this spring in anticipation of drilling the targets.

In January, the company staked the Triceratops property, adjacent to the Ekati mine in the Northwest Territories. The project contains six kimberlites with low diamond counts, as well as three unexplained KIM trains and other complex trains that may indicate further
potential. Arctic Star plans to generate new drill targets at Triceratops using modern exploration methods.

And in November, the company acquired the T-Rex property in the Lac de Gras field. T-Rex holds 13 known kimberlites, but the property has not seen modern exploration and Arctic Star notes that non-magnetic kimberlites may have been overlooked.

Canterra Minerals

In January, Canterra Minerals (TSXV: CTM) added the Rex project, adjacent to Kennady Diamonds’ land package in the Northwest Territories, to its portfolio. The claims were acquired based on a review of public data and on reconnaissance sampling last year. The property contains several KIM anomalies that contain G9 and G10 garnets and two KIM trains.

At Canterra’s Marlin project, where Margaret Lake Diamonds (TSXV: DIA) is earning up to a 49% interest, 126 till samples were collected last year. The samples returned a 1-mm by 1-mm by 1.4-mm off-white modified octahedral diamond.

Canterra recently identified several kimberlite targets coincident with KIM anomalies at Marlin, after flying a 1,500-line km airborne gravity and magnetic survey over the north part of Marlin last year.

Chalice Gold Mines

Chalice Gold Mines (TSX: CXN; ASX: CHN) has an indirect stake in Meteoric Resources‘ (ASX: MEI) Webb Diamond project in Western Australia.

Meteroic has discovered 51 kimberlites containing both hypabyssal and diatreme facies after drilling 63 targets at Webb.

While microdiamonds were not recovered from the drill core, microdiamonds have been recovered in the northern part of the kimberlite field in surface loam sampling.

Less than 20% of the targets at Webb have been tested.

Chalice owns 24% of GeoCrystal, a company that has a 70% interest in Webb. The company could own up to 51% of GeoCrystal, if it exercises its warrants in the company and participates in future financings.

Diamcor Mining

Diamcor Mining (DMI: TSXV) raised $3.1 million in a private placement in December to help advance its Krone-Endora alluvial deposit in South Africa.

The junior’s in-field dry screening plant has proven effective at removing fine material under 1 mm, and now the company is ready to upgrade its infrastructure in order to treat large material in the +26 mm size fractions, which it has been stockpiling. Plant upgrades are expected to be complete by mid-year.

To facilitate the investment, Tiffany & Co., which has a right of first refusal on Krone-Endora diamonds other than specials, has agreed to a one-year deferral and loan extensions of principal and interest payments accruing after December 2014.

Diamcor sold 3,579 carats of diamonds in the quarter ended Dec. 31 for revenues of $886,840, net of commissions and fees, for an average price of US$221.96 per carat. The company realized a net loss of US$651,720 or 1¢ per share for the period.

In its fourth quarter ended March 31, Diamcor sold 4,619.11 carats of diamonds for an average of US$182.38 per carat.
Processing was suspended in early March to complete work on the plant.

GGL Resources

GGL Resources (TSXV: GGL) reported in December that its 1995 Doyle joint venture with De Beers has been terminated. The junior will get De Beers’ 60% interest in certain JV claims in return for relinquishing its 40% of other claims. De Beers will also pay GGL $300,000.

Lucara Diamond

As of late April, Lucara Diamond (TSX: LUC) had finished construction of a US$55-million plant upgrade at its Karowe mine in Botswana, and commissioning had begun. The company installed new XRT diamond recovery machines and a large diamond recovery circuit to help process the fresher, harder kimberlite in Karowe’s south lobe and improve recovery of large diamonds, for which the mine is known.

For 2014, Lucara reported revenues of US$265.5 million, an increase of 47% from the previous year due to higher prices and more diamonds being sold in exceptional tenders, which accounted for half of total revenues. Lucara reported adjusted net income of US$90.8 million, with adjusted earnings per share of US24¢, up from US17¢ in 2013.

Lucara ended the year with $101 million in cash. The company received an average of US$644 per carat sold, up from US$411 per carat the previous year.

For 2015, the company expects to bring in US$230-240 million from the sale of 400,000 to 420,000 carats of diamonds, with operating costs of US$33-36 per tonne of treated ore.

At presstime, Lucara had agreed to sell its Mothae project, in Lesotho, for US$8.5 million and a 5% interest in initial profits from production.

Margaret Lake Diamonds

In April, Margaret Lake Diamonds (TSXV: DIA) reported that 12 high-priority drill targets have been identified at its 60%-owned Margaret Lake property adjacent to Kennady North. A total of 60 anomalies were identified following an airborne gravity gradiometry survey conducted late last year.

The company can earn up to 70% of the project.

(See also the Canterra Minerals entry.)

Metalex Ventures

Metalex Ventures (TSXV: MTX) is searching for alternative sources of financing for a bulk sample and potential development of the U2 kimberlite in northern Ontario. Last summer, Dundee Corp. (TSX: DC.A) terminated its agreement with Metalex to fund up to $51 million in costs to bring the U2 and T1 kimberlites to feasibility, citing delays in permitting and in negotiating exploration agreements with local First Nations.

Mountain Province Diamonds

Mountain Province Diamonds (TSX: MPV; NASDAQ: MDM) is now fully covered for its share of the $858-million capital cost of Gahcho Kué, its 49%-owned joint venture with De Beers (51%). The company closed a US$370-million term loan facility in April, after closing a $95-million rights offering in March. First production is expected in the second half of 2016.

In March, the partners announced that they collected 434 kg of Tuzo kimberlite with five holes in their 2014 Tuzo Deep drill program. The program confirmed that Tuzo continues to more than 740 metres depth and returned 2,514 diamonds, including 2.46 carats of commercial-size diamonds for a grade of 5.67 carats per tonne. Further deep drilling at Tuzo will wait until construction at Gahcho Kué is complete.

The project is expected to produce an average of 4.5 million carats per year over a 12-year mine life.

In December, the partners signed impact benefit agreements with both the NWT Métis Nation and the Deninu Kué First Nation.

North Arrow Minerals

At presstime, North Arrow Minerals (TSXV: NAR) reported that 11,083 diamonds greater than 1 mm have been recovered from a 1,353-tonne bulk sample from the Q1-4 kimberlite at the Qilalugaq project in Nunavut. The stones weigh 384.28 carats, giving a sample grade of 28.4 carats per hundred tonnes.

Fifteen diamonds were larger than 1 carat, including a 4.42-carat greenish-yellow cubic aggregate; a 4.16-carat intense yellow cubic aggregate, and a 3.53-carat pale yellow cubic aggregate.

The sample is lower-grade than the existing inferred resource for Q1-4 (48.8 million tonnes grading 54 carats per hundred tonnes), however, the company noted it was not taken to confirm the grade, but to confirm the presence of yellow diamonds in larger sizes, and to collect enough diamonds for an initial valuation, which is forthcoming.

Yellow diamonds account for 9% of the stones by stone count and 21.5% by weight and increase in stone count and weight in the larger sizes.

Moreover, an analysis of 41 Q1-4 representative diamonds showed that 40 contained unaggregated nitrogen, a characteristic of rare natural Type 1b diamonds with fancy “Canary yellow” colours, the company reported in April.

North Arrow is earning 80% of Qilalugaq from Stornoway Diamond (TSX: SWY).

At its 80%-owned Pikoo JV with Stornoway in Saskatchewan, North Arrow discovered three new kimberlites early this year with a 24-hole, 3,240-metre drill program.

The most significant kimberlite, PK314, is located in the North Pikoo area and has been drilled to 213 metres
depth. PK314 appears to be an east-west trending, vertically emplaced diatreme-like body that is 25 metres wide and at least 40 metres long.

The diamondiferous PK150 kimberlite, discovered in 2013 at Pikoo, has been drilled to 199 metres depth and over 150 metres of strike.

Pangolin Diamonds

Four white diamonds have now been recovered in soil samples at Pangolin Diamonds’ (TSXV: PAN) Malatswae project, 90 km southeast of the Orapa mine in Botswana.

Last year, three diamonds were found in a 1 sq.-km area, including a 1.5-mm by 1.13-mm by 1.38-mm stone. The diamonds’ characteristics suggest a nearby source.

A fourth diamond, a 0.02-carat octahedron, was discovered 13 km to the northwest in January.

Pangolin plans further exploration in the two areas (MSC and Modala Grids) the diamonds were found. The company has also added three new prospecting licences at Malatswae, which now totals 2,480 sq. km.

In September, Pangolin announced drilling at the Magi target at its Tsabong North project in Botswana recovered four diamonds. A May 2014 hole returned three diamonds.

Peregrine Diamonds

Early this year, Peregrine Diamonds (TSX: PGD) completed a reorganization, putting all of its properties other than its advanced Chidliak project into a wholly owned subsidiary.

Former president Brooke Clements is now president and CEO of Peregrine Exploration.

At Peregrine Diamonds, former VP Tom Peregoodoff is now president and CEO; Chidliak program manager Herman Grutter, is now vice-president of technical services; and former CEO Eric Friedland is now executive chairman of both companies.

In May, Peregrine reported it is acquiring private Botswana diamond explorer Diamexstrat Botswana (DES Botswana) from Diamond Exploration Strategies Ltd. in return for a 1% gross overriding royalty, and for the assumption of a $450,000 loan. (The loan is owed to DES UK, but was originally advanced by Peregrine).

DES Botswana holds eight prospective licences in Botswana totalling 5,746 sq. km that were acquired after reviewing 25 years’ worth of public data. The licences are situated in two areas along the Cretaceous kimberlite corridor, and in three areas that have unresolved geophysical and KIM anomalies.

Through a service agreement, DES UK will continue to manage any work programs at the projects.

At Chidliak, in Nunavut, Peregrine is preparing for a preliminary economic assessment in 2016.

An updated resource at the CH-6 kimberlite added 15% in terms of tonnage in January. The updated inferred resource is 3.3 million tonnes grading 2.58 carats per tonne for 8.57 million carats in the first 250 metres of CH-6.

The junior also increased conceptual tonnage estimates for other areas of CH-6 below 250 metres, and for the CH-7 and CH-44 kimberlites to a total of between 8.2 and 13.6 million tonnes.

Bulk sampling of key kimberlites began in March. The company plans to collect 1,000 tonnes in total from CH-6, CH-7 and CH-44 to add resources and to collect diamonds for valuation from CH-7 and CH-44.

A valuation of CH-6 diamonds last year gave an average price of US$213 per carat.

Recent drill results from CH-7 indicated a geologic domain in the kimberlite that could be higher grade than CH-6.

Rockwell Diamonds

Rockwell Diamonds (RDI: TSX; RDI: JSE) plans to complete its acquisition of the Remhoogte/Holsloot and Bo-Karoo alluvial diamond projects by mid-year. Rockwell will pay $25.8 million for the early stage projects, which are located beside its current alluvial projects in the Middle Orange River (MOR) area of South Africa.

The projects come with three processing plants that can treat 200,000 cubic metres per month, and have produced more than 7,300 carats of high-quality stones in the last nine months of 2014.

The company expects the acquisition will allow it to grow production to over 500,000 cubic metres a month, a rate that would help smooth out its quarterly production.

For the quarter ended Feb. 28, Rockwell sold US$10.6 million worth of diamonds from its MOR operations, with an average price of US$2,461 per carat influenced by the sale of two 120-carat-plus Saxendrift stones.

Rockwell has suspended operations at its subeconomic Niewejaarskraal project at MOR to focus on increasing throughput and better understanding the orebody.

The company sold its Tirisano project in South Africa for $6.3 million in cash in March.

Strike Diamond

In March, Strike Diamond (TSXV: SRK) announced results of a fall 2014 till sampling program at its Sask Craton North project, in Saskatchewan.

The regional sampling program identified four potential KIM trains, however, infill sampling is needed to better assess the property.

Strike sampled selective areas of Sask Craton adjacent to the Pikoo project and Alto Ventures’ GEFA and Fisher properties. Two of the potential KIM trains are in the eastern area of Sask Craton North. The site, which also returned a G9 garnet and other indicator minerals, is 8 km down-ice from a cluster of small, subtle magnetic anomalies, and 5 km up-ice of a potential KIM train identified by Alto.

The Southern area of the project, where 17 till samples were collected, contains two potential KIM trains. One sample site contained over 55 KIMs; the company believes the source is nearby.

Of 30 samples taken in the Northern area of the project, only seven returned mantle-derived KIM grains.

Shore Gold

Aiming to increase resources, reduce the $1.9-billion preproduction capital cost, and reduce the time to production at its Star-Orion South project in Saskatchewan, Shore Gold (TSX: SGF) is working to revise its mine plan.

The company wants to mine the Orion South kimberlite — which is both higher grade and has 30 metres less overburden than the Star kimberlite — first, reversing the order of the current plan.

To do so, Shore plans to re-estimate the Orion South resource and then re-optimize the open pit using updated resources and diamond prices. The company began a 12-hole, 2,600-metre, large-diameter infill drill program at Orion South in late April.

The budget for the drill program and resource estimate is $5.5 million.

Star is 100% owned by Shore, while Orion South is part of the Fort à la Corne joint venture with Newmont Mining (32%), in which Shore has a 68% interest.

The Star-Orion environmental assessment was approved by the federal government in December. The company is awaiting provincial approval.

Stornoway Diamond

Construction at Stornoway Diamond’s (TSX: SWY) Renard project in Quebec is on track, with first concrete poured for the processing plant in April.

Plant commissioning is slated for late 2016, with commercial production following in the second quarter of 2017.

Stornoway is also working on an updated resource for its Renard 2 kimberlite, due out in June. The company completed 12,010 metres of drilling in November, focused on adding resources from 600 metres depth and 1,000 metres depth, where Renard 2 remains open.

A preliminary geological model suggests that Renard 2 holds 9 to 12 million tonnes between 600 metres and 1,000 metres depth.

March was an eventful month for Stornoway: the company started prestripping activities at Renard 2 and Renard 3 and also officially opened its Clarence and Abel Swallow airport. It also completed the drawdown of its first US$80-million tranche of US$250 million in diamond stream funding.

Lastly, Stornoway president and CEO Matt Manson received the Viola R. MacMillan award for company or mine development for his success leading the development of Renard.

True North Gems

In February, True North Gems (TSXV: TGX) announced the results of an updated prefeasibility study for the Aappaluttoq ruby and pink sapphire project in Greenland.

The study pegged total project capex at US$25 million, and the project’s post-tax net present value at US$171 million at an 8% discount rate. The post-tax internal rate of return was pegged at 122%.

True North is building the project with partner LNS Greenland, which will own 27% of Aappaluttoq once it begins production.


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