Diamondex uncovers kimberlite at King

Diamondex Resources (DSP-V) is adding a third rig to its wholly owned King property in the Northwest Territories, where a $2.7-million program is testing a possible downdip extension of the Snap Lake dyke.

The King property sits 220 km northeast of Yellowknife and adjoins the northern boundary of the Snap Lake underground diamond project, acquired last year by De Beers Consolidated Mines (DBRSY-Q) from Winspear Diamonds and Aber Diamond (ABZ-T) for $480 million.

De Beers intends to reach full production on Snap Lake by early 2004, pending permitting approval and negotiation of agreements with First Nation communities and the territorial government. Snap Lake will be Canada’s first underground diamond mine.

Last year’s drilling by Winspear confirmed the continuation of the main NW dyke downdip within several hundred metres of the King property boundary. The dyke extends 3.2 km north-south, 3.1 km east-west and to a depth of 1 km. It is generally 2-3 metres thick but narrows to 1.3 metres at the eastern margin. The structure — a gently dipping, intrusive kimberlite sheet — contains an indicated and inferred resource of 21.3 million tonnes grading 1.97 carat per tonne, equivalent to 42 million carats. The value of the Snap Lake stones is pegged at US$100 per carat.

Diamondex collared its first two vertical holes 800 metres apart and 200 metres north of the property boundary. The first hole was completed to a depth of 1,343 metres and intersected 17 gently dipping, narrow kimberlite dykes over a 60-metre interval beginning at a depth of 1,101 metres. The dykes range in thickness from 2 to 33 cm and have an overall cumulative thickness of 1.7 metres.

Except for a single, 25-cm-thick, olivine-rich dyke, all the kimberlite dykes comprise material similar to that which characterizes the Snap Lake kimberlite system. Gently dipping altered fractures occur in the host granitic rock up to 60 metres above the uppermost dyke. Similar features are found in the hangingwall and footwall of each of the dykes. These fractures extend only 3 metres below the last kimberlite dyke and would seem to be related to the emplacement of the dyke system.

The second hole was collared 800 metres west of hole 1 and completed to a depth of 1,339 metres. Eight kimberlite dykes, ranging in thickness from 1 cm to 1.63 metres, were cut over a 24-metre section, starting at a depth of 1,147 metres. These kimberlite intervals combine for a total of 2.56 metres and comprise both hypabyssal- and breccia-phase kimberlite. A set of altered fractures extends up to 30 metres above the first kimberlite dyke and 8 metres below the bottom dyke.

A second zone of gently dipping, altered fractures in the host granitic rock was intersected between 1,269 and 1,306 metres. This zone contains a single, 3-cm-wide kimberlite dyke.

Diamondex is wedging off from each of the first two deep holes with the aim of stepping out on these zones. Kimberlite samples from the first two holes will be submitted for microdiamond analysis after the wedge holes have been completed.

Geological information suggests the kimberlite system strengthens toward the north, and northwest of hole 2. A third rig has been contracted, and the next three holes will be drilled to the west, north and northwest of hole 2.

With the intersection of an olivine-rich dyke, Diamondex has encountered a new kimberlite variant in the Snap Lake area. “We think that, as we get closer to the source, these variations will become more common,” says John McDonald, the company’s executive vice-president. “As you get closer to the source, you’re going to be encountering a more active kimberlite emplacement environment, and if there are variations in the system, that is where they will occur, as opposed to the distal ends.”

McDonald is also keeping an eye on the alteration and fracture system associated with the kimberlite dykes. Some thickening is apparent in the system, as is light pervasive alteration (including iron-staining). In addition, the feldspars are pink instead of grey.

At Snap Lake, McDonald says, this type of signature is restricted to 3-4 metres in the hangingwall and perhaps a couple of metres in the footwall. “As we go north, this zone is progressively increasing, and we would expect that close to the kimberlite source.”

An experimental, two-dimensional reflection seismic survey is being conducted over Snap Lake and a portion of the King property, in collaboration with De Beers Canada Mining and the University of British Columbia. If the initial survey identifies the kimberlite dyke system at depth, a 3-D survey will be carried out on the King property in 2002 to guide further drilling.

Last fall, drilling by SouthernEra Resources (SUF-T) the Mackay Lake property intersected two narrow intervals of kimberlite totalling 20 cm at a depth of 1,316 metres. That hole, the first, was collared near the eastern boundary of the King property, 1,400 metres west of Diamondex’s first hole. SouthernEra recently drilled a second hole, a further 800 metres to the east, though it failed to intersect any kimberlite. The hole was stopped at a depth of 1,600 metres.

The Mackay Lake property is held 70% by SouthernEra and 30% by Kalahari Resources (KLA-V).

Meanwhile, Diamondex has intersected a kimberlite body at the Carat joint venture property, which adjoins the northern boundary of the Ekati diamond mine property, also in the Northwest Territories. A 45 incline hole into the land-based geophysical anomaly known as CT-55 drilled through overburden and into kimberlite at a depth of 33 metres. The hole remained in kimberlite to a depth of 70.1 metres before being abandoned as a result of poor drilling conditions. Diamondex identified the kimberlite as crater facies. A second hole was drilled, but was abandoned at a depth of 70.7 metres. Diamondex is therefore arranging for a larger rig to test the CT-55 body.

The CT-55 kimberlite lies 20 km northeast of Ekati’s Sable pipe, one of eight pipes slated to be mined over the 18-year life of the operation. Diamondex continues to evaluate several other geophysical targets in the vicinity of CT-55 for drill-testing.

The junior holds a 60% interest in the Carat property and can earn a further 10% from Tyler Resources (TYS-V) by spending $1 million on exploration before the end of 2002. This year’s winter program at Carat has been budgeted at $800,000.

Elsewhere, Shear Minerals (SRM-V), in partnership with Diamondex, has begun drilling selected targets on the Aylmer Lake West property, 95 km southeast of the Ekati mine. The property comprises seven mining claims covering 77 sq. km.

Ground geophysical surveys were recently completed over the diamondiferous Nicholas Bay kimberlite pipe, and over several land- and lake-based targets within 4 km of Nicholas Bay. Six core holes at the Nicholas Bay pipe, which was previously drilled in 1994, were re-logged and sampled for microdiamonds by Shear. A total of 127.7 kg of kimberlite yielded 1,174 micros and six macros (a macro is here defined as measuring greater than 0.5 mm in at least one direction). In 1994, by comparison, 230 kg of drill core returned 176 micros and four macros.

The Nicholas Bay pipe consists of two distinct phases of kimberlite: a tuffisitic kimberlite breccia and an olivine macrocrystic hypabyssal phase. Shear has completed the earn-in requirements for a 49% interest in this property.

Diamondex was incorporated in 1999 when the non-core assets of Winspear Resources were spun-off into this separate public company. Under this plan of arrangement, Diamondex acquired 2,500 sq. km of prospective exploration properties in the Slave Province. This year, the company has boosted its property holdings to more than 5,260 sq. km through acquisitions and staking. The company has 20.9 million shares outstanding.