KWG, SouthernEra update diamond strategies

Representatives of KWG Resources (ME) and SouthernEra Resources (TSE) outlined their companies’ different diamond exploration strategies at a recent meeting of the Toronto Society of Financial Analysts.

KWG President Pierre Gauthier described how his company is using airborne magnetic data to screen diamond properties in Northern Ontario and Quebec. KWG is involved in three projects: Spider 1, Spider 2 and a joint venture in Northern Ontario and Manitoba.

The Spider 1 project, covering more than 10 million acres in the James Bay lowlands of Ontario near the Attawapiskat River, is focusing on large-scale crustal structures that may have localized kimberlite emplacement. The company under the guidance of Donald MacFadyen, a geophysical consultant with more than 40 years of industry experience, is reprocessing Ontario Government airborne magnetic data to delineate possible kimberlite pipes. Under this project, KWG has staked 280 targets covering about 150,000 acres. In one area, 40,000 acres have been staked around a Monopros claim group said to contain nine kimberlites that were discovered in the late 1980s. The Spider 2 project covers an area extending eastward from west of Timmins Ont., to the Quebec border. Most of the work is being conducted near Kirkland Lake, Ont., and Cobalt, Ont.

In the Kirkland Lake area, KWG plans to further test two diamondiferous pipes outlined by Lac Minerals in the early 1980s, the C-14 and B-30 pipes. KWG is earning a 50% interest in these pipes from Regal Goldfields (CDN). Near Cobalt, the company plans to bulk sample a kimberlite outlined by Lac in Bucke Twp., Ont., and another kimberlite previously drilled by Monopros in Guiges Twp., Que.

In the third project, KWG and joint venture partner Blue Falcon Mines are earning a 51% interest in 16 claims owned by Continental Precious Minerals (ME) and Texas Star Resources (VSE) in the James Bay lowlands. The partners are also gaining access to the BP Canada diamond database developed in the 1980s, now held by Continental.

The company is processing kimberlite samples from some of its properties at the Moscow State University in Russia. The Russians are reported to have an extensive kimberlite database and are able to make diamond grade estimations based on the bulk chemistry of a kimberlite’s groundmass.

KWG has completed detailed airborne magnetic surveys over several targets in each of the three project areas. Drill testing will commence upon completion of financing. The company has already raised $800,000 to explore the Guiges Twp. property.

Since the meeting, KWG says it has closed two private placements worth $1.6 million each; the proceeds will go toward diamond exploration work on the Spider 1 and 2 projects.

Meanwhile, SouthernEra President Christopher Jennings described how his company is well on its way to becoming one of the major players in the Lac de Gras area. The company now has an interest in at least 12 properties covering more than 2.2 million acres.

The company is using kimberlite indicator mineral chemistry to locate and prioritize drill targets. After some 35 years in diamond exploration, Jennings has built up a database which he uses to estimate the economic potential of a kimberlite based on its mineral chemistry.

According to Jennings, 40 high priority targets have been identified on the SouthernEra landholdings.

SouthernEra also has an agreement whereby it can earn up to 40% of any Kennecott Canada deal within a large area surrounding Lac de Gras. Rumor has it that Monopros carried out an overburden sampling program over the entire Slave Province this summer. In anticipation of new staking by Monopros, SouthernEra has acquired several new claim blocks, totalling 250,000 acres, peripheral to the Lac de Gras area. Jennings says the new blocks are strategically located.

Asked to compare the exploration programs of SouthernEra and KWG, Jennings said he has sampled in the James Bay Lowlands but decided not to concentrate his efforts there.