Stockwatch Daily

Diamonds & Specialty Minerals Summary for March 6, 2014

- By Will Purcell

THE DIAMOND and specialty minerals stocks box score for Thursday was a poor 54-66-145. The TSX Venture Exchange gained 10 points to 1,039 while polished diamond prices were flat. James Campbell’s Rockwell Diamonds Inc. (RDI), 52 cents in November, fell one-half cent to 33.5 cents on 5,000 shares. Rockwell has been quiet since it picked a black empowermen­t outfit, African Vanguard Resources, to co-own its Middle Orange River alluvial mines in South Africa. In what passes for equality, South African style, the black locals agreed to pay $7.3-million for a 30-per-cent interest and white Rockwell agreed to lend African Vanguard most of the cash to do so. Andre Gauthier’s Matamec Exploratio­ns Inc. (MAT) lost one cent to close at nine cents on 1.82 million shares. Mr. Gauthier says Matamec’s main focus is developing the Kipawa rare earths deposit in Quebec, but all its promotable news lately comes from Sakami, a gold play in which Canada Strategic Metals

Inc. (CJC: $0.105) is earning a 70-per-cent interest.

Patrick Evans’s Kennady Diamonds Inc. (KDI), up five cents to $4.60 on 11,000 shares, has drilled 58.4 metres of kimberlite at Kelvin, 10 kilometres northeast of Gahcho Kue in the Northwest Territorie­s. The two other drill holes also hit promotable widths of kimberlite; no surprise since the holes are infill tests designed to increase confidence in the dimensions of the irregular Kelvin kimberlite. (Confidence equals promotabil­ity and Mr. Evans is one of the best diamond promoters around.) Kennady’s stock briefly dipped below $4 last month but has been inching upward again as the company begins an important drill program this year. Retail investors are most interested in the planned 25- to 30-tonne mini-bulk sample of Kelvin that will start once the infill tests are complete. A 3.3-tonne test last summer produced 9.3 carats on a 1.18-millimetre sieve, or 2.81 carats per tonne. If that holds up, the tonnage and grade of Kelvin seem remarkably similar with CH-6, the rich pipe on Baffin Island being worked by Peregrine Diamonds Ltd. (PGD: $0.53). Kennady Diamonds still does not have a formal estimate of the amount of kimberlite at its Kelvin-Faraday complex but Mr. Evans had been promoting a target of five million tonnes, and he usually beats his targets. At this point the grade of Kelvin and Faraday remain uncertain, although all signs suggest the rock is at least as rich as Gahcho Kue’s better material, about two carats per tonne. Some holes at Kelvin produced eye-popping grades of up to 11 carats per tonne in tiny samples using all the microdiamo­nds recovered, but that seems unrealisti­c for a larger test.

Alan Leschert and Malcolm Fraser’s Northaven Resources Corp. (NTV: $0.04) is sending investors a mixed message with its “meritoriou­s Brazilian mineral properties” acquired in the late 2000s when Northaven was still Diamond Internatio­nal Exploratio­n Inc., founded by former Calgary stockbroke­r, Robin Dow. Mr. Leschert, CEO, and Mr. Fraser, president, insist Northaven is maintainin­g the Brazilian diamond project, for which it paid nearly $3-million to acquire and explore. The properties, Juina and Rio, were advanced kimberlite and alluvial prospects with deposits in various stages of developmen­t, but there is seamier side to the Brazilian story, as is occasional­ly the case in Brazil. Mr. Leschert and Mr. Fraser, both lawyers, say Northaven “is unable to determine title” and has been out of touch with “relevant service providers” for three years. They add, ominously, Northaven does not have enough cash to “investigat­e any wrong-doing” or to hire local lawyers “to defend any interest it may still have or has unfairly lost.” All that suggests the vendor or another group may have regained control of the projects leaving Northaven with noth- ing, meritoriou­s or otherwise, to maintain.

Paul Gorman’s Shield Gold Inc. (SHG), down one cent to seven cents on 347,000 shares, is buying the Lochaber graphite project in the Gatineau area of Quebec from Rock Tech Lithium Inc. (RCK: $0.02). Lochaber was Rock Tech’s top prospect a year ago. Its interim CEO, Afzaal Pirzada, vainly promoted assay after assay from a 4,600-metre drill program. Rock Tech’s assays ran between 2 per cent and 3 per cent over intervals occasional­ly exceeding 100 metres, with higher-grade zones embedded. Unfortunat­ely, when Rock Tech’s stock moved it invariably fell, and Mr. Pirzada’s promised maiden resource estimate never materializ­ed. (In fact Rock Tech is about to pass away as an exploratio­n spinster: it will become a Zimbabwe-based investment and advisory company — best advice: leave — through a reverse takeover of Brainworks Capital Management Ltd. Mr. Gorman promises a resource estimate based on Rock Tech’s drilling, followed shortly by a preliminar­y economic assessment. Shield should be able to produce a resource estimate quickly, based on the amount of drilling Rock Tech performed since 2012. Meanwhile, Mr. Gorman, an active stock promoter, intends to officially rename Shield as Great Lakes Graphite, although it is not clear why. The company’s new website features a space-based view of the Great Lakes region but all

the company’s properties are barely on — or well off — the northeaste­rn fringe of the image.

Peter Dickie and Mark Smith’s Niocorp Developmen­ts Ltd. (NB), up one cents to 11 cents on 211,000 shares, has sold 13 million shares at 20 cents, raising $2.6-million for the company’s Elk Creek niobium project in Nebraska. This is a first tranche, says president Dickie, of what was to be a $10-million placement. Late last year Mr. Dickie and Mr. Smith, CEO, claimed to have “successful­ly raised” $1.65-million, although a skeptic might add they unsuccessf­ully raised the remaining $8.35-million of what was also to have been a $10-million placement. (Mr. Smith bought 6.8 million of those 15-cent shares and Mr. Dickie another 850,000; they did not participat­e in the latest “first tranche.”) Niocorp is plodding along with work at Elk Creek, which it likens to the big, billion-dollar Niobec mine in Quebec. Elk Creek hosts 19 million tonnes indicated and 83 million inferred averaging 0.63 per cent niobium oxide.

Jason Dussault and Robert Mintak’s Pure Energy Minerals Ltd. (PE) closed unchanged at four cents on 1.74 million shares after Ko- rea-based POSCO agreed — brace for some thick fudge — to “explore the possibilit­y of collective­ly engaging in potential joint business opportunit­ies.” POSCO is interested in seeking lithium on Pure Energy’s Nevada claims, which previously yielded lithium-enriched brines averaging 285 milligrams per litre over 145 metres of drilling. Mr. Mintak, CEO since last spring, claims an “in-depth understand­ing” of the lithium industry, although much of his career was spent handling financial and investor relations duties for Dussault Apparel Inc., Environmen­tal Control Corp. (EVCC: $0.0085 (U.S.)), Seacove IR and Norburn Lighting.

James Calaway’s Orocobre Ltd. (ORL), up six cents to $2.51 on 55,000 shares, is inching toward production at its Olaroz lithium project in Argentina. The company has spent $178-million of the budgeted $229-million and constructi­on, which began late in 2012, and is 80-per-cent complete. Five weeks ago the tallies were $164-million and 75-per-cent. Mr. Calaway says the mine is within budget and will achieve production before the end of June. The mine is projected to produce 17,500 tonnes of lithium carbonate per year and up to 20,000 tonnes of potash. Much of the cash for the mine came from Orocobre’s co-venturers, Toyota Tsusho Corp. and JEMSE, but Mr. Calaway and his family have long been effective fundraiser­s for Texas oil companies and the Democratic Party.

(*MKTDIAM)

Newspapers in English

Newspapers from Canada