Fipke `really happy’ with diamonds’ quality — Economic pipes

Partners Dia Met Minerals (TSE) and BHP Minerals Canada appear to have three economic diamondiferous kimberlite pipes on their land package in the Lac de Gras region of the Northwest Territories, plus one or two more in the making.

Recent valuations for diamonds from three of the pipes sampled on the property earlier this year, “compare with the best of South Africa, and probably rank up there with the Russian (pipes),” said Dia Met Chairman Charles Fipke.

At the same time, the partners reported the discovery of 16 new kimberlites, bringing to 26 the number of kimberlites drill-identified on the property since the start of exploration. All the new discoveries are diamondiferous, which reflects the joint venture’s considerable expertise in differentiating between barren and diamondiferous kimberlites without drilling. One of the new targets, 93-J, returned dazzling results from core drilling which far surpass anything ever reported from Lac de Gras. The 60.5-kg. core sample from this pipe returned 155 macro-diamonds (greater than 0.5 mm) and 259 micros.

“I’m sure we will be doing more work on this target this winter,” Fipke told The Northern Miner, after pointing out that 40 of the diamonds recovered from this pipe are greater than one millimetre in diameter, including a colorless dodecahedral greater than two millimetres in diameter.

BHP and Dia Met are forging ahead with plans to carry out test samples of between 3,500 and 5,000 tonnes from each of Pipe 4 and Pipe 3. This decision is based on previous, smaller tests from these targets, and on the results of the recent diamond evaluations.

The valuations are based on the mean of six independent estimates — two by London-based firms and four by diamond companies in Antwerp. A 49.8-tonne sample from Pipe 4 contained 62.11 carats (31% of this amount being of gem-quality) for a mean value of US$112 per carat. (The value per carat refers to the entire sample of diamonds from that pipe, not just the gem fraction.)

A 179.7-tonne sample from Pipe 3 contained 61.28 carats (33% being of gem-quality) for a mean value of US$81 per carat. Pipes 3 and 4 contain multiple phases that were segregated in the reporting of these results. A 151.5-tonne sample from Pipe 1 contained 65.37 carats (17% gems) for a mean value of US$89 per carat.

“We are really happy with the quality of our diamonds,” Fipke said. “Results to date from all three pipes indicate economic targets. With the first result (Pipe 4), we’re talking about rock worth US$140 per tonne.”

Valuations were also obtained from the joint venture’s original discovery, Point Lake, and from Pipe 2; however, the results were considered “too low to justify further exploration.”

This statement is something of a bombshell, in that Point Lake has been compared to the Tli Kwi Cho (DO-27) target, being bulk-sampled (5,000 tonnes) this winter by the competing Kennecott-DHK joint venture on a nearby claim group. Earlier this month, a Toronto mining analyst compared Point Lake and Tli Kwi Cho by adjusting results to reflect a common 50-kg-sized sample weight. The results of this exercise showed 14 macros and 55 micros from Point Lake, and 13 macros and 39 micros from DO-27. By comparison, if 93-J results are adjusted to continue this exercise, a 50-kg. sample shows an astounding 128 macros and 214 micros.

It is no secret that the first company to prove up an economically feasible diamond deposit will likely be in the best position to negotiate marketing contracts and mine financing. The world market in rough diamonds is still largely controlled by Central Selling Organization (CSO), the international and highly secretive cartel established by De Beers in the 1930s. The issue of independent marketing has largely subsided in face of the current worldwide recession, although some analysts predict it could revive later this decade as a number of marketing contracts come up for review. The emergence of Canada as a new diamond producer will become clear once valuation information is provided from the large bulk-sampling programs taking place this winter and into 1994 at Lac de Gras. The high percentage of gem-quality diamonds (more than 30% in the two BHP-Dia Met pipes being tested) indicate potential for high-value production such as occurs in Russia, Botswana and South Africa. Another important factor is that the pipes in the Northwest Territories are geologically young, with the upper sequence preserved.

The BHP-Dia Met joint venture expects to complete on-site construction of a bulk-sample heavy media plant by year-end to test Pipes 3 and 4 (Pipe 1 will not be part of this program). One pipe will be sampled from underground workings, the other by large-diameter (about 1-metre) reverse circulation drilling. Construction of a decline for the underground program will begin this month. A 110-man camp is under construction to house staff. Also planned is delineation drilling to establish precise boundaries of both pipes. Core drilling results were also released for several other significant kimberlites discovered this year. Target 92-F returned seven macros and 35 micros from 59.6 kg of core, plus 12 macros and 21 micros from a 60.8-kg sample and 45 macros and 142 micros from 56.3 kg.

A 27.6-kg core sample from Pipe 93-A returned five macros and 12 micros, while a 57.9-kg sample from this same target returned 14 macros and 48 micros. But the real barn-burner was Target 93-J, according to David James, mining analyst for Richardson Greenshields.

“If Dia Met-BHP’s Pipe 4 looks good, what results will Pipe 93-J produce?” James queried. “You can have Venezuela, I’m for Lac de Gras!”