STOCK MARKETS — Diamond exploration ventures fuel

The long odds of finding a potentially economic diamondiferous kimberlite pipe don’t appear to be daunting the growing number of junior companies now looking for such targets in North America.

Western markets during report period, which ended at noon, April 7, reflect considerable speculative trading in diamond exploration ventures, with large gains posted by juniors active in Saskatchewan. The buoyant markets saw the Vancouver Stock Exchange resource index gain 50.63 points to 934.12 from a week ago, while the composite index closed up 130 points to 930.06. The most active issue on western markets was Savanna Resources, up 9 cents at 44 cents in active trading on the Alberta Stock Exchange. Trading is related to Savanna’s approximate 43% equity stake in Rhonda Mining, active in diamond exploration in Saskatchewan. Also listed on the ASE, Rhonda is trading at the $9 level.

Consolidated Pine Channel Gold gained 95 cents to reach $4.85 after reporting that geophysics turned up magnetic bull’s-eye anomalies on its diamond exploration properties in Saskatchewan. The junior also says it has been approached by representatives of two South-African based companies interested in its Saskatchewan diamond project.

Active in both the Saskatchewan and Alberta diamond plays, Swannell Minerals was up a nickel at 70 cents in active trading. The junior reports that Carlo Civelli, a Swiss-based financier, is now on board as vice-president of finance, Europe. Golden Peaks Resources, which also has bull’s-eye anomalies in Saskatchewan, jumped 60 cents to reach $1.65.

The Saskatchewan play is interesting because of the high percentage of gem-quality diamonds recovered to date and the apparently large size of the bodies being tested. Companies are focusing on the large areas of kimberlitic sediment surrounding pipes; the Uranerz/Cameco drilling reportedly has not identified any feeder diatremes.

This joint venture drilling tested 18 different bodies. Of the 360 tonnes of kimberlite recovered from bulk-sampling, 186 tonnes were processed and 160 diamonds (predominantly gem-quality) averaging 0.04 carats in weight were recovered. It should be noted that only three samples graded higher than two carats per 100 tonnes, with the best about 10.5 carats per 100 tonnes (a minimum of 30 carats per 100 tonnes is required for a kimberlite to be economically viable).

Another negative is that, with at least 100 metres of overburden, exploration-scale recovery can only be achieved by drilling, which makes finding and testing these targets an expensive proposition.

Although not active in diamond exploration, Adrian Resources was up 27 cents at $1.96. The company recently secured a larger stake in the Petaquilla copper project in Panama, a joint venture with Minnova and Kerr Addison Mines. Adrian also has a slice of the Eskay Creek deposit being developed by Homestake in northern British Columbia. Prime Resources Group, which owns half of Eskay Creek, gained a further 26 cents to settle at $2.65. Commonwealth Gold was also active, ahead 9 cents at $1.04. The company is involved in a diamond exploration joint venture near Lac de Gras, N.W.T. Although a number of companies are working this region, the standard-bearer is still the BHP-Dia Met Minerals joint venture which has uncovered a pipe field with a number of highly prospective diamondiferous kimberlite pipes. Albert Applegath’s Kalahari Resources gained a further 46 cents to reach $2.90. The company is planning “the largest grassroots exploration program even undertaken in the Northwest Territories.” The emphasis should be on “grassroots,” particularly for the recently acquired, large land package in the Back River region. The company will be looking for volcanic massive sulphides, iron formation gold and kimberlites.

Much of the recent staking in this region was triggered by rumors of an iron-formation-type gold discovery by Homestake. The company will only say the Goose Lake find is “interesting,” and reports are now surfacing that some of the rumored wide intersections may be the result of drilling downdip of a mineralized structure. As for discussing drill results over a radio phone, a former Homestake geologist told us “not likely.”

Another active trader was Royalstar Resources, up 90 cents at $1.75. The company is involved in a garnet project at the feasibility stage, in New Mexico. Noramco Mining holds a sizable equity position in Royalstar.