Bulk sampling underway on 5034

Vancouver – De Beers Canada Exploration has launched a bulk sampling program on the Hearne and 5034 kimberlite pipes on Mountain Province Diamonds‘ (MPV-T) Kennady Lake property in the Northwest Territories.

The $10 million program is designed to recover at least 2,000 carats of diamonds from the pipes in an effort to increase the confidence and accuracy of the previous revenue modeling completed by De Beers last year.

The Hearne and 5034 kimberlite pipes are the largest and highest valued per tonne of the five diamondiferous bodies identified at Kennady Lake within the joint-venture’s AK claims. In 2000, De Beers tabled a study that examined both open-pit and underground mining options. Open-pit mining was proposed for the 5034 and Hearne pipes, and for a high-grade zone within the top 140 metres of the Tuzo pipe. However, the project fell short of the critical mass to achieve the 15% rate of return needed to proceed to the feasibility stage.

Situated 120 km southeast of Lac de Gras, Kennady Lake comprises a portion of the AK-CJ claims, held 51% by De Beers, 44.1% by Mountain Province and 4.9% by Camphor Ventures (CFV-V). De Beers can increase its interest to 60% by advancing the project to commercial production.

Last year, De Beers recovered 307 tonnes of kimberlite from three large-diameter reverse-circulation (RC) holes into the high-grade northern part of the Hearne pipe, plus 550 tonnes from four holes into the high-grade eastern lobe of the 5034 pipe.

The 5034 kimberlite contains a modeled resource of 12.5 million tonnes to a depth of 300 metres grading 1.64 carats per tonne. The 5034 pipe is subdivided into four lobes based on internal geology, with the north lobe extending partly under land.

The Hearne pipe hosts 7.2 million tonnes grading 1.71 carats per tonne. Hearne consists of a northern and southern lobe, which have been further divided into multiple phases. The Tuzo pipe contains 14.9 million tonnes of kimberlite grading 1.22 carats per tonne at US$43 per carat, based on the 1999 bulk sample. An upper higher-grade zone hosts a modeled 1 million tonnes grading 2.7 carats per tonne at US$47 per carat.

The 2001 bulk sample drilling yielded an additional 1,665 carats using a 1.5-mm bottom cutoff, bringing to 3,491 carats the total parcel recovered from the two pipes. The newly modeled carat values, based on a diamond parcel nearly twice the size of the 1999 parcel, were down 5% for 5034 at US$65.50 and down 11% for Hearne at US$63.30.

Despite the lower values, which are consistent with the large drop in the rough diamond market value, De Beers decided to proceed with another bulk sample to recover a further 2,000 carats. The decision was based on the recovery of a 9.9-carat, gem-quality stone from the 5034 pipe that was valued at US$60,000, or US$6,000 per carat. De Beers believes there may be a statistically significant population of high-quality diamonds present in the 5034 and Hearne pipes.

Drilling is already underway with the first hole collared on the 5034 pipe. De Beers plans to drill 4-or-5 large diameter drill holes into each pipe.