COAL, URANIUM & OIL SANDS — Kennecott uncovers kimberlite in Alberta

The 1999 winter drilling campaign on the Legend property in northeastern Alberta concluded with only one new kimberlite being found, raising to eight the number of bodies identified to date.

Kennecott Canada Exploration, a division of London-based Rio Tinto (RTP-N), had only one hit while testing a total of seven geophysical targets. Drilling on the Gryphon anomaly encountered a coarse-grained layer in mudstone containing numerous mantle-derived indicator minerals, suggesting either that the hole intersected interlayered mudstone and kimberlite or that it was drilled close to a kimberlite.

Kennecott attributes its lack of success to the prevalence of subtle, magnetic high anomalies within the 1.5-million-acre block of land. The source of these anomalies is believed to be either paleo-drainages or magnetic minerals in the Cretaceous sediments.

Kennecott has suspended drilling on the property until the end of the caribou calving season in June. It will use this time to review the results to date and plan the next stage of exploration.

Of the seven kimberlites discovered in late 1998, only the Phoenix kimberlite has been fully processed for microdiamonds. It yielded a previously reported 5 microdiamonds from 380 kg of drill core.

The processing of samples from the remaining five kimberlites had been held up by repair work at Kennecott’s Thunder Bay laboratory. However, caustic fusion analysis of check samples representing about 10% of the core recovered from each body proved to be barren, as did an initial 80 kg of core from the Roc kimberlite and 30 kg of sample from Dragon. Kennecott’s lab is now fully operational.

Kennecott can earn a 60% interest in the Legend property block from 70-30 owners Montello Resources (MEO-A) and Redwood Resources (RDW-A) by either advancing it to a production decision or spending $30 million on exploration over seven years. So far, Kennecott has spent $1.8 million on the property.