Di­a­mond & Spe­cialty Min­er­als Sum­mary for Sept. 14, 2017

Stockwatch Daily - - MINES & METALS - by Will Pur­cell

THE DI­A­MOND and spe­cialty min­er­als stocks box score for Thurs­day was a pleas­ant 75-54-134. The TSX Ven­ture Ex­change gained five points to 776 while pol­ished di­a­mond prices were flat. Tan­talex Re­sources Corp. (TTX) dou­bled to­day, clos­ing up 4.5 cents to nine cents on 1.53 mil­lion shares on word it can ac­quire lithium, cobalt or other spe­cialty min­eral projects in the Demo­cratic Repub­lic of the Congo.

Matthew Wood’s Five Star Di­a­monds Ltd. (STAR), up 1.5 cents to 24 cents on 262,000 shares, has di­a­mond counts from its Ri­achao project in Brazil. The 13 mi­cro di­a­monds are ap­par­ently from the big ,25- hectare pipe that the com­pany dis­cov­ered in May. Mr. Wood, chair­man, pres­i­dent and chief ex­ec­u­tive of­fi­cer, says that Five Star col­lected two “mini-bulk sam­ples” — an ag­gran­diz­ing term un­usual even for Howe Street to de­scribe two small sam­ples weigh­ing less than 100 kilo­grams each. One batch yielded 11 stones, the other two, from a grand to­tal of 195.3 kilo­grams of kim­ber­lite.

Mr. Wood says that all 13 di­a­monds are trans­par­ent and 10 of them are deemed white or colour­less stones. He also points out that five of the gems were bro­ken do­dec­a­he­dra crys­tals, three were oc­ta­he­drals, two were oc­ta­he­dral con­tact twins, two oth­ers were frag­ments and the re­main­ing stone was a do­dec­a­he­dral crys­tal. While Mr. Wood dili­gently laid out the de­tails of his di­a­monds ac­cord­ing to the “Four Cs,” he left out one im­por­tant de­scrip­tor: the size of the gems. Rarely does a di­a­mond pro­moter in­ad­ver­tently omit an im­por­tant bit of in­for­ma­tion; although data of­ten go miss­ing in­ten­tion­ally when the news is bad. As a re­sult, it is likely that none of the di­a­monds were pro­motably large.

Five Star’s Ri­achao sam­ples were ham­mered off and hoed up from two out­crops, nearly 30 me­tres apart on the east­ern part of the kim­ber­lite tar­get. Mr. Wood says that more work is set to be­gin im­me­di­ately at Ri­achao, with auger drilling, sur­face map­ping and more “bulk sam­pling” planned. (Given Five Star’s hy­per­bolic de­scrip­tion of its first two tests, the bulk sam­ples will pre­sum­ably be limited to sam­ples weigh­ing hun­dreds of kilo­grams, not hun­dreds of tonnes.)

Mr. Wood called the di­a­mond counts “ex­cep­tional early re­sults,” adding that ad­di­tional as­sess­ment needs to be com­pleted on this “very large kim­ber­lite.” (It is big by global stan­dards, he says, but it is prob­a­bly huge by Brazil­ian stan­dards, where most com­mer­cial di­a­mond pro­duc­tion comes from al­lu­vial de­posits de­rived from long eroded kim­ber­lites.) In­deed, Mr. Wood points to his­tor­i­cal com­mer­cial pro­duc­tion from the area im­me­di­ately sur­round­ing the big pipe, sug­gest­ing that the area, if not the pipe it­self, is favourable for di­a­monds. There­fore, Five Star has been seek­ing other pipe tar­gets at Ri­achao and it ap­pears that some will be tested with ground geo­physics.

Paul Brock­ing­ton’s Mar­garet Lake Di­a­monds Inc. (DIA), un­changed at 7.5 cents on 90,000 shares, has ap­pointed Don Hus­ton to its board. Mr. Brock­ing­ton, pres­i­dent and CEO, touts his new­est di­rec­tor’s “wealth of ex­pe­ri­ence” in run­ning ex­plo­ration pro­grams and pub­lic com­pa­nies, adding that he “looks for­ward to his in­put.” While Mr. Brock­ing­ton notes Mr. Hus­ton’s roles as pres­i­dent of Cy­press De­vel­op­ment Corp. (CYP: $0.11) and di­rec­tor of two Jim Pet­tit com­pa­nies: Sky­har­bour Re­sources Ltd. (SYH: $0.40) and Aben Re­sources Ltd. (ABN: $0.41), Mr. Hus­ton also had a fringe role with sev­eral Howe Street di­a­mond ju­niors in the late 1990s and early 2000s, the glory days of Canada’s di­a­mond hunt.

Mr. Hus­ton’s well-named Dasher Ex­plo­ration Inc. dashed about from one fringe di­a­mond project to the next, start­ing in 2001 when it ac­quired a prospect ad­join­ing the (long since failed) Knife kim­ber­lite in the North Slave district, and end­ing in 2003 when its sliver of the Coro­na­tion area play in Nu­navut came to naught. (Knife was a large pipe but it had a low grade; the Coro­na­tion district hosted a clus­ter of kim­ber­lites that were mostly bar­ren of macro­di­a­monds, so Mr. Hus­ton may well have a cau­tion­ary wealth of in­for­ma­tion to share.)

Pa­trick High­smith’s Pure En­ergy Min­er­als Inc. (PE), un­changed at 50 cents on 255,000 shares, is of­fer­ing three mil­lion shares at 50 cents, and per­haps an­other 600,000 shares more if an over­al­lot­ment op­tion is fully ex­er­cised. The $1.5-mil­lion that the com­pany is seek­ing is for work­ing cap­i­tal and ex­plo­ration at Clay­ton Val­ley South and Terra Cotta. Pure En­ergy had suf­fi­cient work­ing cap­i­tal

at last re­port and while it muses about work on the Terra Cotta lithium brine project in north­ern Ar­gentina, the com­pany’s web­site pro­claims Pure to be “fo­cused on the Clay­ton Val­ley project” in Ne­vada.

That fo­cus was sharp­ened in June, when the com­pany com­pleted a pre­lim­i­nary eco­nomic as­sess­ment of Clay­ton Val­ley South, de­riv­ing a dis­counted net present value of $264.1-mil­lion (U.S.) af­ter taxes for a $297-mil­lion (U.S.) mine ca­pa­ble of pro­duc­ing 9,100 tonnes of lithium car­bon­ate per year for 20 years. That plan con­sid­ered a drain­able brine re­source of 331 mil­lion cu­bic me­tres av­er­ag­ing 123 parts per mil­lion lithium.

Dr. An­dreas Rom­pel’s Cobalt Power Group Inc. (CPO), down one cent to 13.5 cents on 178,000 shares, has started a sec­ond phase of drilling at its Smith cobalt prop­erty, near Cobalt in North­east­ern On­tario. The com­pany, formerly Global Cop­per Group Inc., re­tooled it­self a year ago through its ac­qui­si­tion of Smith. It mounted its first drill pro­gram in May, com­plet­ing nearly 1,900 me­tres across nine holes. In mid-May, Dr. Rom­pel, pres­i­dent and CEO, said that the as­says were “pend­ing” — a term of­ten a syn­onym for “this could take awhile.” Dr. Rom­pel now con­cedes that while the as­says for most of the holes have been re­ceived, the com­pany will hold off re­leas­ing the re­sults un­til they are all avail­able. (It is un­clear if he just wants the mar­ket to have all the re­quired in­for­ma­tion at once, or if he is hop­ing that the as­says to come are bet­ter than the ones he is keep­ing se­cret for now.)

The new drill pro­gram will in­clude be­tween 10 and 15 holes, at least 2,000 me­tres in all, that will fo­cus upon eval­u­at­ing the re­cently dis­cov­ered min­er­al­ized zone that showed up in July: A chan­nel sam­ple of a 10-cen­time­tre-wide vein as­sayed 12.5 per cent cobalt, 82.2 grams of sil­ver and 4.99 grams of gold per tonne, 0.53 per cent nickel and at least 1 per cent bis­muth and ar­senic. Dr. Rom­pel says that the new drilling will also fol­low up on re­sults of the ear­lier drilling, of­fer­ing en­cour­age­ment that there is some­thing in the yet to be re­leased as­says deemed wor­thy of a sec­ond look.

(*MKTDIAM)

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