Di­a­mond & Spe­cialty Min­er­als Sum­mary for Sept. 15, 2017

Stockwatch Daily - - MINES & METALS - by Will Pur­cell

THE DI­A­MOND and spe­cialty min­er­als stocks box score for Friday was an up beat 72-55-137. The TSX Ven­ture Ex­change gained three points to 779 while pol­ished di­a­mond prices edged higher.

Larry Reaugh’s Amer­i­can Man­ganese Inc. (AMY) jumped 4.5 cents to 23.5 cents on 3.2 mil­lion shares on word that its plan to re­cy­cle lithium-based ma­te­rial from lithium-ion bat­ter­ies is go­ing well. The com­pany plans to file for patents in Novem­ber.

Chris Tay­lor’s Dunnedin Ven­tures Inc. (DVI), up two cents to 21 cents on 110,000 shares, has added 42,128 hectares to its Kahuna di­a­mond project north of Rankin In­let in Nu­navut, ex­pand­ing the project to just over 166,000 hectares. Mr. Tay­lor, pres­i­dent and chief ex­ec­u­tive of­fi­cer, says the new ground is prospec­tive for both gold and di­a­monds, ap­par­ently con­tin­u­ing his at tempt t o use Kahuna as a di­a­mond ex­plo­ration project with Dunnedin, and as a gold prospect through a spin-off com­pany, the lat­ter of which he re­vealed nearly a year ago and last men­tioned in June.

Mr. Tay­lor says that the sum­mer pro­gram on Kahuna is be­ing ex­tended to cover the new ground through ge­o­log­i­cal map­ping, as well as bedrock and till sam­pling. He says that the new area cov­ers ex­ten­sions to green­stone belts and banded iron for­ma­tions — he is tout­ing gold here — as well as host­ing prob­a­ble up-ice sources of re­cently re­cov­ered di­a­mond in­di­ca­tor min­er­als along with suit­able geo­phys­i­cal tar­gets re­sem­bling kim­ber­lite pipes. Mr. Tay­lor has also been promis­ing, or at least mus­ing about, drill pro­grams and bulk sam­pling ef­forts for the prop­erty since the com­pany ac­quired Kahuna three years ago. He ap­pears more se­ri­ous about the plan now, as Dunnedin has be­gun mo­bi­liz­ing fuel and other re­quired ma­te­ri­als for a planned win­ter drill pro­gram.

This is the plan the com­pany re­vealed in late Au­gust, in which it plans to test three tar­gets east of the Kahuna kim­ber­lite dike, which have healthy geo­phys­i­cal sig­na­tures in­dica­tive of pos­si­ble pipes and are sup­ported by ar­rays of kim­ber­lite in­di­ca­tor min­er­als trail­ing away in the down-ice di­rec­tion. As well, Dunnedin said it was as­sess­ing 19 other areas that pro­duced high in­di­ca­tor counts, and some of those could be drilled early next year as well. In all, Mr. Tay­lor sug­gests that there are over 30 geo­phys­i­cal tar­gets within a five-kilo­me­tre ra­dius that could be kim­ber­lite pipes.

The for­mer prop­erty owner, Pamela Stand’s now bank­rupt Shear Min­er­als Ltd., found dozens of kim­ber­lite pipes on what it called its Churchill di­a­mond project in the mid-2000s, but the best of them were barely di­a­mon­dif­er­ous. For­tu­nately, none of its pipes had min­eral chem­istry cor­re­spond­ing with the bet­ter in­di­ca­tor grains that it had been track­ing, but its pipe search was side­tracked when the com­pany be­gan find­ing rich dikes on the prop­erty that Ms. Strand be­lieved could be strung to­gether into a work­able mine. Ms. Strand got as far as bulk sam­pling the Kahuna dike and com­plet­ing mini-bulk tests of a few other rich dikes, but the project stalled when the di­a­mond sec­tor im­ploded. (Bank­ruptcy came later, when Ms. Strand was put out to pas­ture and the new CEO, Julie Las­sonde-Gray, tried to res­ur­rect the failed Jeri­cho mine in western Nu­navut.)

Af­ter Dunnedin ac­quired Kahuna, it quickly put to­gether a re­source es­ti­mate based on Shear’s old data, list­ing 3.07 mil­lion tonnes at Kahuna av­er­ag­ing 0.80 carat per tonne, based on a 1.18-mil­lime­tre sieve, plus 921,000 tonnes at Notch av­er­ag­ing 0.83 carat per tonne, for a com­bined 3.22 mil­lion carats. Two other, smaller dikes re­main out­side the re­source in­clud­ing PST, which av­er­ages over two carats per tonne but ap­pears to be dis­cour­ag­ingly nar­row. Di­lu­tion is a con­cern in all dikes, but the di­a­mond size dis­tri­bu­tion pro­file ap­pears coarse. In­deed, a 13-carat gem that got away when Shear in­ad­ver­tently broke it dur­ing the re­cov­ery process was a favourite topic for Ms. Strand at one time, and now for Mr. Tay­lor. Dunnedin will pro­mote the dikes if it must, but Mr. Tay­lor hopes to find a few big pipes with the di­a­mond char­ac­ter­is­tics of­fered by his dikes.

Wayne Tis­dale’s US Cobalt Inc. (USCO), up one cent to 55 cents on 118,000 shares, has ex­panded its drill pro­gram at Iron Creek in Idaho. The com­pany has com­pleted 20 holes span­ning just un­der 4,700 me­tres and it is adding about 3,000 more me­tres to the pro­gram, now pegged at about 12,100 me­tres across 41 holes. Mr. Tis­dale, pres­i­dent, and Brian Kir­win, se­nior vice-pres­i­dent of ex­plo­ration, say that the first holes were de­signed to con­firm his­tor­i­cal es­ti­mates of cobalt and cop­per at Iron Creek, while the ad­di­tional holes will test the depth po­ten­tial of the cobalt be­neath the his­tor­i­cal es­ti­mates.

Those old es­ti­mates in­clude three com­pleted in the 1970s and two oth­ers rolled out in the early 1980s. (The num­bers vary con­sid­er­ably within each es­ti­mate and there are few sim­i­lar­i­ties from one es­ti­mate to the next.) In 1980, No­randa Inc. pro­duced one of the rosier cal­cu­la­tions, list­ing a re­serve in one lens of 1.05 mil­lion tons at 0.61 per cent cobalt and 0.3 per cent cop­per, with a sec­ond lens hold­ing 229,000 tons at 0.48 per cent cobalt and 0.24 per cent cop­per.

Blair Way’s Lead­ing Edge Ma­te­ri­als Corp. (LEM), un­changed at 62 cents on 73,000 shares, has pro­duced about 25 kilo­grams of rare earth car­bon­ate us­ing a “new and op­ti­mized flow­sheet” and ma­te­rial from its Norra Karr project in Swe­den. Norra Karr has been on hold for the past few years but Mr. Way is get­ting re-en­thused, as rare earth prices have been show­ing signs of re­cov­ery from the col­lapse of the 2011 price bub­ble, which had made rare earth projects a must-have for many Howe Street pro­mot­ers.

Lead­ing Edge has a re­serve of 23.6 mil­lion tonnes av­er­ag­ing 0.59 per cent to­tal rare earth ox­ides as cal­cu­lated two years ago by a pre­de­ces­sor com­pany, Tas­man Me­tals Ltd. That es­ti­mate was used in a 2015 prefea­si­bil­ity study that yielded a dis­counted net present value of $313-mil­lion (U.S.) af­ter taxes. The pro­posed mine would cost $378-mil­lion (U.S.) to build, which is why Tas­man’s CEO, Mark Saxon, be­gan tout­ing po­ten­tial “op­ti­miza­tions” at every op­por­tu­nity to in­creas­ingly pes­simistic in­vestors. (He merged his com­pany with Mr. Way’s Flin­ders Re­sources Ltd. last year to cre­ate Lead­ing Edge.)

Tim Fern­back’s Lico En­ergy Min­er­als Inc. (LIC), un­changed at 9.5 cents on 572,000 shares, has agreed to is­sue eight mil­lion shares now, rather than later, to Ne­vada En­ergy Me­tals Inc. (BFF: $0.02). The ac­cel­er­ated pay­ments will give Lico 100-per-cent in­ter­ests in Ne­vada’s Dixie Val­ley and Black Rock Desert lithium prospects in Ne­vada.

(*MKTDIAM)

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