THE DIAMOND PAGE — BHP Minerals launches mine feasibility

Canada could become the world’s newest diamond producer in early 1997 — assuming positive results are reported in a feasibility study on properties held by BHP Minerals and Dia Met Minerals (TSE) in the Lac de Gras region of the Northwest Territories.

BHP gave formal notice to Dia Met that it will prepare, at the former’s expense, a feasibility study for the first diamond mine on the property. This will have the effect of vesting BHP with its 51% participating interest. Dia Met will have 29%, with the remainder held privately.

“We believe a positive production decision will follow the feasibility study if results (from bulk sampling) are as we expect,” said Dia Met President James Eccott. “BHP has already stated that its goal is to begin production in early 1997 if results continue to be as positive as they have been.” The decision as to whether the first mine will be the Koala pipe or the recently discovered Panda pipe will be determined by the final analysis of comparative results from bulk samples. A third pipe, Fox Lake, is also being bulk-sampled and will be part of the long-term feasibility study for the project.

Earlier this year, BHP and Dia Met announced the recovery of 269.99 carats of diamonds from a 229.47-tonne sample taken from the Panda pipe. Even more impressive is the fact that most of the recovered stones were described as “gem or near-gem quality,” which prompted a decision to drive a decline to bulk-sample this target.

The 5,000-tonne bulk sample from the Panda pipe will be additional to large bulk samples from Koala and Fox. Panda, which has an indicated area of 3.03 hectares, is 1.2 km northeast of Koala.

Eccott said BHP’s commitment to the feasibility study is a big step forward in its plan to become a significant producer of diamonds.

BHP will perform the basic mine planning and financial analysis. However, basic engineering and preparation of a bankable estimate were awarded to a joint venture of Fluor Daniel Wright and Signet of Australia. This work will be done by late 1994 as part of an environmental impact statement. Vancouver-based Rescan will provide environmental consulting and permitting services.

The BHP-Dia Met joint venture is not the only group hopeful of becoming Canada’s first diamond producer. This summer, Kennecott Canada expects to release results of its bulk-sampling program on the Tli Kwi Cho (DO-27) kimberlite, also in the Lac de Gras region. This 40%-held project is a joint venture with several junior companies, three of which plan to merge to form a new company, NorthernEra Diamonds.

Three companies — Dentonia Resources (VSE), Horseshoe Gold Mining (ASE) and SouthernEra Resources (TSE) — plan to combine to form an entity that will hold a 33.3% interest in the WO claim block hosting the Tli Kwi Cho discovery. Christopher Jennings will be NorthernEra’s president and chief executive officer, while Horseshoe’s James McInnes and Dentonia’s Adolf Petancic will also be on the executive team.

NorthernEra will also have a 48.3% interest in the WI and DHK claim blocks near the discovery, as well as interests in more than 2.2 million hectares in the Territories.

So far, Kettle River Resources (VSE) has resisted the urge to merge. The company retains its 11.6% interest in Tli Kwo Cho. The remaining 15% is held by Aber Resources (TSE).

Elsewhere in the Northwest Territories

* A new kimberlite was discovered at Yamba Lake, on joint-venture ground held by Tanqueray Resources (ASE), Fibre-Klad Industries (ASE) and Mill City Gold Mining (VSE). The first hole on this target was drilled vertically and intersected kimberlite at 35.4 metres; it ended in kimberlite at 199 metres. A total of 163.5 metres of kimberlite were cored and recovered. A second hole testing the Eddie Pipe is currently drilling in kimberlite, 49.5 metres south of the first hole.

Core from three targets — the Eddie pipe, the Sputnik pipe currently being drilled, and additional ground yet to be drilled — will be sent to Lakefield Research for extraction of macrodiamonds and microdiamonds.

The joint venture also completed initial bulk sampling of the Torrie pipe and is expecting results to be released this summer. A total of 25 tonnes of HQ core and 2.4 tonnes of NQ core were obtained and trucked to Colorado for processing.

The two discovery holes (from 1993) on the Torrie pipe yielded a total of 234 diamonds (including 53 macros) from 395.6 kg of core. Of these, 213 were described as clear-white in color and clarity, while 17 were described as champagne or off-white in color.

* A joint staking effort by Aber Resources (TSE) and Gitennes Exploration (TSE) has resulted in the acquisition of a 44,000-hectare claim block near the Drybones Bay kimberlite discovery outside of Yellowknife (T.N.M., May 2/94). The acquisition stems from Aber and Gitennes’ efforts to secure an option agreement with the discovery syndicate S.H.S. for the purpose of covering adjacent targets.

The YK East property was staked to cover the northerly extension of a structural corridor hosting the discovery pipe, where geophysics indicated numerous circular magnetic anomalies. Initial interests are 40% each for Aber and Gitennes and 20% for S.H.S. The land package is close to Yellowknife, so the partners expect exploration costs will be lower than they would be in more remote regions of the Territories.