Diamond & Specialty Minerals Summary for July 14, 2017
THE DIAMOND and specialty minerals stocks box score for Friday was a so-so 59-64-134. The TSX Venture Exchange gained four points to 757 while polished diamond prices were flat. Dominion Diamond Corp. (DDC) jumped 69 cents to $16.91 on 228,000 shares before rumours of an impending buyout tripped a regulatory circuit breaker. The company promptly reset the switch, saying it continues to talk, but has nothing new to say.
Patrick Power’s Arctic Star Exploration Corp. (ADD) dropped another 4.5 cents to 23 cents on 1.46 million shares. The stock opened strong yesterday, hitting a 34.5 cent high, but ended the day down 2.5 cents to 27.5 cents on 2.94 million shares on word that the company is acquiring another diamond play. The new project, covers a 243-hectare permit in northern Finland hosting two old kimberlite discoveries: Black Wolf and White Wolf. (Arctic Star does not mention their size, so they probably are small.) Mr. Doyle, vice-president of exploration, says that the company “views this new project as a unique opportunity to advance a new diamond district.” It believes the two pipes are part of a cluster of yet to be discovered pipes, which is why Arctic Star has applied for a 95,700-hectare exploration reservation centred on the two pipes. The combined project will be called Timantti.
Mr. Doyle and Mr. Power, Arctic Star’s president and chief executive officer, say that once the deal closes, they will seek to “quickly gain a better understanding” of the two Wolf kimberlites. They propose geophysical surveys that will be used to target further drilling. The drilling will help define the shape and tonnage of each kimberlite and provide a better idea of their diamond content. That, in turn, will provide the data needed to determine the pa-
rameters for a bulk sampling program. Further, they say that Arctic Star plans an airborne geophysical survey over the rest of Timantti, or at least the areas with indicator mineral anomalies.
The Wolf kimberlites are intriguing, but they have not seen much work since the mid-2000s. They were discovered by European Diamonds PLC in 2005 and a 41.2-kilogram sample of kimberlite yielded 42 microdiamonds with one up to 0.88 millimetre in length. Roy Spencer, who led the team making the discovery, went back the following year and collected an 8.8-tonne cumulative sample from two shallow trenches. The rock produced 1.25 carats, implying a grade of 0.14 carat per tonne, with the largest diamond weighing 0.09 carat. Those numbers were unimpressive, which is probably why interest in the Wolf kimberlites dried up, but they offer hope that new finds in the area could be economic.
Mr. Spencer knows the diamond promise of area well, as Mr. Power points out that he was “largely responsible” for the discovery of the Grib pipe, 450 kilometres east in the Archangelsk region of Russia. (On Howe Street, “largely responsible” can translate to “was nearby when it was found,” but Mr. Spencer was the exploration manager for Archangel Diamond Corp. in the latter half of the 1990s. He and Archangel’s Russian partner identified the geophysical anomaly and he pushed the two companies to drill the discovery hole.) While nobody but the Russians made money on Grib, Mr. Power has now added Mr. Spencer to Arctic Star’s board. A native of South Africa, he joined De Beers out of high school in the mid-1960s and trotted the globe with the company for years. He is also a technical director for Eric Friedland’s Peregrine Diamonds Ltd. (PGD: $0.135).
To acquire the 243-hectare postage stamp property hosting the Wolf kimberlites, Arctic Star has agreed to issue 14.5 million shares at a deemed price of 20 cents per share to the owners of Finland-based Foriet Oy. Ten million of those shares go to a private United Kingdom-based company, Dragon Equities Ltd. The rest will go to the shareholders of Foriet’s joint venture partner. The cost to acquire the big surrounding property will be minimal, but keeping it all will cost considerably more. Arctic Star is considering a $2-million recommended budget for the Wolf kimberlites, including analyzing boxes of old core to expand the microdiamond parcel and ground geophysics. The big-ticket items are more till sampling this winter, at a cost of $720,000, and a 1,500-metre drill program that would cost $900,000.
Jim McKenzie’s Ucore Rare Metals Inc. (UCU) closed unchanged at 30 cents on 78,000 shares. The company has not made much progress lately at its Bokan-Dotson Ridge rare earth project in southeastern Alaska, but Mr. McKenzie, president and CEO, still touts the project at every opportunity. Lately he has been sounding more like a political pundit than a stock promoter, offering cheerful projections on what the Trump administration will do about supporting domestic production of strategic minerals. This week, he cheered the U.S. Senate’s move to provide “funding and direction” to the Department of Defence to increase strategic minerals production.
Bokan-Dotson Ridge will need all the help it can get. The deposit hosts 4.8 million tonnes indicated and another 1.05 million tonnes inferred, at 0.60 per cent total rare earth oxides. A preliminary economic assessment, now five years old, put the cost of a
mine at $221-million (U.S.). It credited the project with a discounted net present value of $577-million (U.S.), but the dream sheet was rolled out just as the 2011 rare earth price bubble began to burst.
David Blann’s Happy Creek Minerals Ltd. (HPY), up three cents to 20 cents on 81,000 shares, hit the news again this week. Just after it raised the full $3-million it was seeking, the company sent a crew to the Fox tungsten property in preparation for a 5,000-metre drill program. The 35 to 50 holes are intended to expand the current resource estimate; the rest of the work will be part of a proposed preliminary economic assessment. (Fox currently hosts 486,000 tonnes indicated at 0.817 per cent tungsten oxide and another 316,000 tonnes inferred at 1.57 per cent.)
Jeremy Poirier’s Bearing Lithium Corp. (BRZ), down seven cents to 92 cents on 121,000 shares, has an updated resource estimate for its Chile-based Maricunga project, which it touts as “one of the highest-grade undeveloped lithium brine projects in the world.” (Bearing is acquiring a 17.7-per-cent interest in the project.) The company estimates Maricunga hosts 300 million cubic metres of brine averaging 74 grams of lithium per cubic metre and another 60 million cubic metres at 114 grams of lithium per cubic metre, or about 2.15 million tonnes of lithium carbonate.