Diamond & Specialty Minerals Summary for Sept. 15, 2017
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.