Diamond & Specialty Minerals Summary for Nov. 13, 2017
THE DIAMOND and specialty minerals stocks box score for Monday was a weak 66-93-120. The TSX Venture Exchange rose six points to 802 while polished diamond prices fell slightly. Chuck Fipke’s Metalex Ventures Ltd. (MTX) dropped one-half cent to five cents on 196,000 shares. Metalex touts its efforts to reach a deal with the locals and finance a big bulk sample of the U2 pipe in Ontario but is getting nowhere.
Richard Silas’s halted Consolidated Westview Resource Corp. (CWS.H: $0.395) is doubling its proposed private placement ahead of a reverse takeover of Bruce Counts’s Lithoquest Diamonds Inc. Consolidated Westview had agreed to sell nine million shares at 27 cents as a condition of the merger, which would add $2.43-million in cash to the company’s treasury. Now the company says that it is planning to sell nearly 19 million shares for a total of $5.12-million. Mr. Silas, the company’s president and chief executive officer for now, says that the cash is mainly for initial exploration on Lithoquest’s North Kimberley diamond project, near the northern coast of Western Australia, and for working capital. (Once the reverse takeover is complete, Mr. Counts will replace Mr. Silas as president and CEO and the company will become Lithoquest Diamonds Inc.)
The additional cash will come in handy, as Mr. Counts says that he and his crew have “discovered strong evidence of a diamond-bearing kimberlite cluster” on North Kimberley. Lithoquest points to three occurrences of apparent weathered kimberlite, adding that rock samples from two of the locations produced “compelling” diamond inclusion chemistry. As well, Mr. Counts says that diamonds had been recovered during historical stream sampling by previous explorers. One of those old finds weighed 1.73 carats and was valued at $740 (U.S.) per carat.
Mr. Counts points out that Lithoquest’s property is in the heart of the Kimberley craton of Western Australia, about 300 kilometres northwest — hardly neighbours — of the prolific Argyle diamond mine that has produced over 750 million carats of low-value white and exceptional value pink diamonds since 1983. As well, the property is about 450 kilometres northeast of the Ellendale mine, which produced about half of the world’s fancy yellow diamonds during its run. Further, Mr. Counts says that two other diamond deposits are “proximal” to Lithoquest’s project. One, the Seppelt-2 kimberlite, has a reported grade of 2.25 carats per tonne.
Once Mr. Counts has the required cash, Lithoquest plans drilling at its kimberlite oc-
currences to collect fresh rock for testing. The company hopes to get started before the end of the year, but it is running out of time as the area goes through a rainy season that typically begins before Christmas and ends in April. The goals of the core drilling program are to confirm that the rock is indeed kimberlite and to assess any internal variations within the material. As well, the company hopes to get an initial sense of the size and tonnage potential of each occurrence. Assuming the rock encountered is indeed kimberlite, Lithoquest will process the rock for microdiamonds to “obtain first indications of diamond grade and size distribution.”
Paul Ferguson and Paul Gorman’s Great Lakes Graphite Inc. (GLK), down one-half cent to 7.5 cents on 325,000 shares, has sold $2-million of convertible debentures to finance its operations and expansion plans. As a result, Great Lakes is cancelling the private placement of 40 million shares at five cents that it planned in mid-August. Mr. Gorman, president and CEO, says that his company “instead has closed a less dilutive financing.” He says that the debenture financing was offered to the company by a “major, long-standing shareholder.” (The company said nothing more to reveal the identity of its lender, but Mr. Ferguson is a major shareholder and so are his parents, Frank and Mitzi Ferguson, who have previously acquired Great Lakes Graphite debentures.)
Mr. Gorman and his crew did not reveal the interest rate of the debentures, nor did they say at what price the convertible debentures might be converted into stock. Mr. Gorman subsequently said that the interest rate on the debentures is 10 per cent, payable at maturity in 18 months. He also says that the company is issuing 3.39 million warrants, exercisable at 7.5 cents, in lieu of the debentures being convertible into stock.
Earlier this year, Great Lakes cancelled its plan to produce micronized graphite at a facility in Northern Ontario. The company now has an arrangement with Ashland Advanced Materials for “commercial-scale purification operations” at Ashland’s big facility in western New York. The terms of that arrangement were not spelled out either, but Great Lakes presumably will be using some of its cash to get that production rolling.
Farhad Abasov’s Millennial Lithium Corp. (ML), down nine cents to $3.50 on 407,000 shares, has sold 6.3 million shares at $2.50 to Million Surge Holdings Ltd., a subsidiary of Golden Concord Group Ltd. This is a first tranche of the “strategic investment,” which parks Million Surge with 9.9 per cent of Millennial’s stock until the regulators complete the clearance process for new insiders. Once complete, Million Surge will buy another 5.7 million shares, completing its $30-million investment. The cash will allow Millennial Lithium to continue development of its Pastos Grandes lithium brine project in Northern Argentina. The company is set to start a preliminary economic assessment of the project.
Thomas Yingling’s Berkwood Resources Ltd. (BKR), down one cent to 36.5 cents on 185,000 shares, has sold 1.26 million shares at 29 cents and 5.84 million flow-through shares at 31 cents, for a total of $2.17-million. The cash is for work on the company’s Quebec properties and for working capital. Berkwood, which claims to be “plugged in” to high-tech metals, is dabbling in exploration for most of the metals needed by battery and energy storage companies.
Its roster of projects needing exploration cash is led by the Lac Gueret Extensions graphite project, on the fringe of the Lac Gueret deposit in Northern Quebec that Mason Graphite Inc. (LLG: $2.36) hopes to mine. Berkwood recently wrapped up a 13-hole drill program there and while assays are pending, Mr. Yingling has already said that his crews hit graphite in every hole. Berkwood also owns the Cobalt Fold cobalt project in Northern Quebec, where it plans preliminary work. (The company, perhaps thinking of its promotional connection to electric cars, often calls the project “Cobalt Ford.”) The company also holds the Roscoe vanadium and the Delbreuil lithium projects.