LEADING LIGHTS
Two Saskatchewan mining companies may not be household names today, yet Star Diamond Corporation and NexGen Energy Ltd. are garnering attention that few up-and-coming resource firms receive. That’s because, Joel Schlesinger writes, one firm is pretty much
STAR DIAMOND CORPORATION (TSX: DIAM)
It’s entirely understandable Star Diamond recently changed its name from its former moniker, Shore Gold Inc. After all, the junior explorer isn’t sitting on a motherlode. Rather all that glitters for this mining company are diamonds — a lot of them.
Star Diamond’s vice-president of exploration and development George Read says the firm’s StarOrion South Diamond Project about 60 kilometres east of Prince Albert is a success story that has been decades in the making. The company began exploring the Fort à la Corne Forest region in the mid1990s after discovering large kimberlite deposits, known to contain diamonds.
“Then last year we attracted the attention of Rio Tinto,” Read says, adding the multinational mining firm could potentially become a 60 per cent stakeholder once a mine it built.
Certainly, the potential is considerable given the samples recovered. The weighted average price of rough diamonds found in samples exceeds $200 a karat — more than double the global standard, Read says.
So far, the company has found approximately 66 million karats, based on estimates released in April.
That’s enough to build a mine with about 34 years of life, Read adds.
While “the grade — in other words the number of karats per ton — of these kimberlites is relatively low, particularly compared with (the) Diavik and Ekati mines in Canada’s North,” the quality is “exceptionally high.” And so too are the karat sizes.
Star Diamonds has found gems exceeding 40 karats, with the potential to discover stones more than 100 karats. Moreover, the deposits have a high likelihood to yield rare, chemically pure type IIa diamonds.
“They can be the most perfect gin-and-tonic white, which have fantastic values,” Read explains.
Uncovering the buried treasure has involved its fair share of challenges. For one, more than 100 metres of overburden — dirt and rock — covers much of the kimberlite. Just to explore the deposit required special German-built machinery to clear away the dirt.
Going forward, however, Star Diamond and Rio Tinto are focused on further verifying the deposit, aiming to transform it into one of the world’s leading diamond mines, Read says.
“In this case, 95 per cent of the product from a future mine would be used in jewelry.”
That, Read adds, is a key reason why “Rio Tinto is keen to make this project happen very quickly.”
NEXGEN ENERGY (TSX: NXE)
London, Paris and New York are just a few of the destinations where NexGen Energy’s chief executive officer Leigh Curyer has been making stops in recent weeks to meet with business media, like Bloomberg, and investors curious about the junior mining firm’s big find in the northwest corner of the province.
“In recent memory, I don’t think we’ve experienced that much interest from a market perspective,” says Curyer, also NexGen’s president.
It’s hardly surprising. There’s plenty to be excited about.
NexGen’s Arrow deposit in the western part of the Athabasca Basin has the potential to rival operations in the eastern basin such as the Cigar Lake mine, which is the largest, high-grade uranium mine in the world.
The Arrow find is so remarkable, in fact, that NexGen recently won the Bill Dennis Award from the Prospectors and Developers Association of Canada. Given to resource firms that make a significant mineral discovery with the potential for a large economic impact for Canada, the award vindicates the significance of the Arrow deposit, discovered in 2014.
“The project is still growing,” Curyer says. “But what we know today is that the deposit is incredibly significant and we’re moving into the development and permitting phase.”
Located about 750 kilometres northwest of Saskatoon, the Arrow discovery has an estimated 450 million pounds of uranium. That rivals Cigar Lake, only without the technical challenges.
“It’s fair to say we’re in a more simplified geological setting than Cigar Lake.”
Curyer adds the Arrow deposit is shallower and does not involve dealing with surface and underground water that Cameco and its partners had to contend with at Cigar Lake.
What also makes NexGen’s situation unique is it has built a firstrate technical team and attracted major shareholders. These key pieces will allow the company to proceed from exploration to development without partnering with a major mining firm.
Curyer points to the backing of CIBC and Li Ka-shing, Hong Kong’s richest individual — two significant investors instrumental to NexGen’s success in the near future.
“(Li) is very aware of the need for nuclear power in Asia, and he is very confident in our position to meet the demand for nuclear energy in the years to come.”
As developed and developing nations look to hydrocarbon alternatives to fight climate change, uranium is poised to experience increasing demand.
And the Arrow project has the potential to be one of the world’s top producing mines to meet escalating need.
“Our project is highly profitable at today ’s uranium price and, when in production, we would be producing cash flows that would put us in the top 10 mining companies worldwide,” Curyer says.
“That’s not just uranium miner — that’s any mining company.”
The project is still growing. But what we know today is that the deposit is incredibly significant and we’re moving into the development and permitting phase. LEIGH CURYER, president and CEO, NexGen Energy