Diamond-staking news draws crowd in oil territory

The diamond-staking rush in Alberta and northern Canada continues to draw crowds, as shown by strong attendance at a recent conference here in the oil and gas heartland. The Calgary Mineral Exploration Group forum, now in its second year, drew twice as many delegates as last year.

Co-sponsored by the Alberta Stock Exchange, the Alberta Chamber of Resources and investment companies Yorkton Securities and McDermid St. Lawrence Chisholm, the conference featured speakers who explained reasons for the staking rush and who emphasized the need for sharing information about diamonds.

Not all delegates were geologists or mining executives. Also present were many potential investors who had received free tickets from brokers. They were told to listen and learn.

Douglas Hurst, a Vancouver mining analyst with McDermid, said it isn’t surprising that, until recently, information about diamond exploration has been in short supply.

“The learning curve has been a very steep one for everyone,” he said in his talk, which gave an overview of diamond plays in western Canada. “It has taken the better part of a year to get up to speed.”

The time required by the industry to adapt to the newfound interest in diamonds explains, he said, the success of Dia Met Minerals (TSE) and BHP Minerals Canada in the Lac de Gras area of the Northwest Territories. Those companies had the technical expertise and testing facilities that enabled them to step boldly into the diamond exploration realm and reap the benefits, he explained. Other companies are just reaching that stage.

“The tiger is now out of the bag,” Hurst told delegates, and proceeded to speculate on what a healthy diamond-extraction industry in Canada could mean to the world market. Canadians are great explorers, he stated, and as such they tend to demonstrate great initiative.

As an example, Hurst cited innovative approaches taken by Canadian gold miners in Nevada and the excellent results they have achieved. The packed ballroom at a downtown hotel resembled a classroom, as geologists and mining experts presented one slide show after another. Twenty-two presentations were given, ranging from how to finance a junior mining company to such arcane-sounding topics as “metal ore fields and petroleum deposits resulting from silane and hydrocarbon emanation in crystalline terranes.” Few delegates had ever heard such detailed descriptions of the geology under review. It was only a year ago that Alberta started gathering detailed geological information, through funding provided under the province’s first Mineral Development Agreement with the federal government. Moreover, since 97% of the province’s mineral revenues stem from oil and gas, the focus has been on those resources.

But most delegates expressed a feeling that the sound geological theories presented at the forum, combined with recently relaxed staking regulations and fees, could well be the ground floor for something big.

Several wanted to know when the results of 1992 studies by the Geological Survey of Canada (GSC) and the Alberta Geological Survey would be released and how they would be distributed. (The deadline for compiling data collected during the past year is March 31. Results are expected to be released shortly thereafter.)

Based on GSC findings, new approaches may be required for exploring for kimberlite and lamprolite pipes in western Canada. GSC geologist B.A. Kjarsgaard said there are no hard-and-fast rules regarding where and in what form the pipes may be found. For example, not all showings are magnetic. Also, many pipes discovered in the west reveal a pancake shape as compared with the more characteristic carrot shape.

Of the 10 pipes identified to date by Dia Met-BHP at Lac de Gras, three appear to be of economic grades, Hurst said. He predicted that only one would be put into production.

Most exploration companies and investors are showing interest in those claims near the Dia Met-BHP discovery. Geology supports this belief as kimberlite pipes tend to occur in clusters.

The Mineral Exploration Group of Calgary was created in 1976 and has had as many as 250 members. Current membership is 170. Its purpose has been educational, with mining specialists speaking at luncheons once a month.