Renard stones worth US$88 per ct

A 459-carat parcel of diamonds from the Foxtrot property in north-central Quebec has returned a modelled value of US$88 per carat for equal partners Ashton Mining of Canada (ACA-T) and Quebec government-owned Soquem.

The stones were derived from a 664-tonne sample of the property’s Renard 2, 3, 4, and 65 kimberlitic bodies. All of the diamonds exceed 1.03 millimetres. The two priciest octahedral crystals weigh in at 4.3 carats and 2.30 carats, and are valued at US$1,551 and US$1,308 per carat; both were recovered from Renard 3.

WWW International Diamond Consultants’ modelling pegged the entire parcel’s minimum value at US$76 per carat, with a high value of US$104. The statistically derived values are based on the size-frequency distribution of the diamonds in the parcel, the valuation for each size class, and the estimated current values per size class for larger-size stones that were not fully represented in the parcel.

In its report, WWW concludes that it is highly unlikely that the average price for run-of-mine production from a commercial operation on the four bodies would come in under US$76 per carat, based on current prices. The consultant also figures that the US$104 value is not unreasonable, even given the small size of the parcel.

The parcel’s actual price was also determined by five valuators, including WWW, Rio Tinto Diamonds (an affiliate of Ashton’s 52.2% shareholder Rio Tinto [RTP-N]), and three other independent diamantaires. The results average out to US$70 per carat, based on current producer prices in Antwerp, Belgium.

The current average global price for rough diamonds is around US$80 per carat. WWW believes its modelled value is more accurate owing to the small size of the parcel.

Meanwhile, 34 core holes completed on Renard 2, 3, 4, and 9 this winter have boosted the tonnage estimates for kimberlite bodies 2 and 3.

At Renard 2, drilling outlined an additional 1.9 million tonnes of kimberlitic material to bring the estimated size of the body to 4.2 million tonnes, an 84% increase from the end of 2004. The work included deepening of a previous hole to a depth of 370 metres (terminated there while still in kimberlite), which represents the deepest intersection at Renard 2 so far.

The drilling also identified some 1.8 million tonnes of “Peripheral Breccia” not included in the revised tonnage estimate. That material comprises country rock and country rock breccia containing more than 10% kimberlitic material. Further investigation is required to determine the breccia’s diamond content and potential economic significance.

A 173-tonne bulk sample of Renard 2 in 2004 yielded an estimated diamond content of 92 carats per hundred tonnes (cpht).

At Renard 3, drilling added 300,000, or 21%, to boost the estimate to 1.7 million tonnes. An extended hole there returned the deepest kimberlite intersection so far at a depth of 360 metres; the hole was terminate in kimberlite. A previous 155-tonne sample from the body yielded an estimated diamond content of 123 cpht.

The drilling failed to add to the 6 million tonnes of kimberlitic material contained in Renard 4.

Some 50 metes to the south, at Renard 9, drilling turned up a new kimberlitic zone around 250 metres below surface; follow up drilling is planned. Renard 9 is 160 metres long by 25-55 metres wide. In March, 6 tonnes of material from the body returned an estimated diamond content of 92 cpht. The haul included one stone weighing 3.26 carats.

In all, Renard 2, 3, 4 and 65 are now estimated to contain 20 million tonnes of kimberlitic material, up from an estimate of 17.7 million tonnes at the end of 2004.

Looking ahead, the partners intend to evaluate various mining plans for the project’s Core Area (pipes 2, 3, 4, 65, 8, and 9), based on the current modeled diamond values and tonnage estimates. The plans include the possible collection of a larger bulk sample in 2006, and mini-bulk sampling aimed at pinning down the diamond content of Renard 8 and 9.