Latest Dia Met finds leave analysts dazzled

The news from Dia Met Minerals’ (TSE) Lac de Gras diamond property in the Northwest Territories just keeps getting better.

Results from core and surface samples on the company’s claim block indicate that all nine of the new kimberlites found by the Dia Met-BHP joint venture last summer contain macrodiamonds (diamonds greater than 0.5 mm in diameter). “The whole thing is extremely exciting,” says John Hainey of Cannacord Capital. “It should silence any skeptics still left. It’s great news for the country.” Other analysts were equally ecstatic.

BHP Minerals Canada is earning a 51% interest in Dia Met’s two blocks of claims totalling 853,000 acres. The remainder will be held by Dia Met (29%) and two individual investors.

A core sample from pipe 92-I and a surface sample from pipe 92-B have a higher diamond content than the 59-kg sample from the nearby Point Lake pipe, which returned 16 macrodiamonds and 65 microdiamonds.

All six of the pipes sampled by drilling are as large or larger than the twin-pipe intrusion at Point Lake. Each of the nine pipes yielded variable proportions of gem-quality diamonds.

Although the samples taken to date are too small (23-161 kg) to make predictions about the feasibility of the diamond-bearing pipes, the results suggest that “a new world-class diamond source” is emerging in the Lac de Gras area, Hainey says.

In the wake of the announcement, shares of the major players in the area were volatile with Dia Met trading in a range of $44-55 at presstime, up from a $35.25 close the day before.

James Eccott, president of Dia Met, refused to comment on the location of pipes and no mention was made of stone color or weight. He said a bulk-sampling program similar to the program completed at Point Lake in March will be launched on at least two of the new pipes later this winter. “Obviously, (BHP) won’t be spending as much time on the Point Lake pipe,” he said. “The big thing now is to prioritize the whole area.”

The recent results are as follows:

Type of Sample Macro- Micro-

Pipe sample weight diamonds diamonds

92-A surface 40.0 kg 2 10

92-B surface 72.2 kg 23 117

92-C core 161.4 kg 10 28

92-D soil 25.7 kg 2 2

92-E core 69.9 kg 11 36

92-F core 23.2 kg 1 12

92-G core 122.0 kg 8 45

92-H core 60.0 kg 1 7

92-I core 122.4 kg 55 132

In other diamond developments:

— Gordon Capital, acting on behalf of a group of European investors, has agreed to purchase a private placement of 1.55 million units of SouthernEra Resources (TSE) at a price of $3.25 per unit. Each unit will consist of one share and one-half a warrant. One whole warrant will entitle the holder to subscribe for one additional common share at $4.25 within nine months of closing.

To maintain its 20% interest in the junior, Kennecott Canada has agreed to subscribe to an additional 303,030 units at $3.30. SouthernEra’s Lee Barker, recently appointed vice-president, says that immediate proceeds of $6 million will be used to finance exploration and development of projects in Canada and South Africa.

— The DHK Syndicate has found diamond indicator minerals in samples taken down-ice of a geophysical target that is thought to represent twin kimberlite pipes on its WO property southeast of Point Lake.

— Subject to regulatory approval, Melinga Resources (VSE) has acquired all of Suncor’s properties in the southeast Northwest Territories in exchange for a repurchasable royalty, shares and cash payments. Included in the package is geophysical database covering 1,000 square miles compiled when Suncor was looking for uranium in the early 1980s. President J.M. Brady says outcropping lamproites have been identified on the claims.

— For $10,000, Verdstone Gold (VSE) has optioned a 51% interest in a property in central Alaska, where three diamonds were recovered during a sluicing operation in the 1980s. Verdstone plans to confirm the presence of indicator minerals (garnets) on the property and increase its landholdings in the area.

— A “European investor” has signed a letter of intent to provide $3.5 million to Canadian Overseas Exploration (VSE) in exchange for a 35% interest in the company. The funds would be used to finance the junior’s marine diamond joint venture in Namibia, where the London-based investor holds other interests.