More pipes found at Ekati claim block

A summer drilling program has resulted in the discovery of nine new kimberlite pipes on the Ekati claim block in the Lac de Gras area of the Northwest Territories, raising to 121 the number of kimberlite occurrences found there to date.

Four of the new discoveries were made on the core group of claims, where the total number of kimberlite pipes now stands at 85. The other five discoveries are in the outlying buffer zone claims, home to 36 known pipes. Results from microdiamond analysis are pending.

The core group of claims centre on the Ekati diamond mine, which began production in the fall of 1998. BHP Diamonds, a unit of Australia’s Broken Hill Proprietary (BHP-N), is the operator and 51% owner. The remaining interests are held 29% by Dia Met Minerals (DMM-T) and 10% each by geologists Charles Fipke and Stewart Blusson.

Ekati is currently operating at full production, averaging 250,000 carats per month. In August, the mine produced about 209,000 carats.

BHP also holds a 51% interest in the surrounding buffer zone claims, with the remaining interests held 31.2% by Archon Minerals (acs-v), 7.8% by Dia Met and 10% by Fipke.

Earlier this year, BHP bulk-sampled the Phoenix pipe (core claims), Gazelle (buffer claims) and Piranha. Piranha straddles the property boundary of the neighbouring Diavik project, held 40% by Aber Resources (ABZ-T) and 60% by a subsidiary of Rio Tinto (RTP-N).

The Phoenix, estimated to be 0.6 ha in size, is a satellite pipe of the Point Lake kimberlite, the first pipe discovered by the joint venture, back in 1991. A 106.1-tonne drill sample yielded 149.22 carats exceeding 1 mm in size for an indicated grade of 1.41 carats per tonne. The diamonds were valued in Antwerp, Belgium, at US$24.78 per carat. By comparison, the Point Lake pipe yielded grades of about 0.6 carat per tonne of kimberlite, with diamonds values of less than US$40 per carat.

The Gazelle pipe covers about 2 ha. A parcel of stones weighing 141.38 carats was recovered from a 240.7-tonne sample for an indicated grade of 0.59 carat per tonne. The stones are worth an estimated US$15.12 per carat.

The smaller Piranha, or A-841, pipe, is 0.4 ha in size. An 87.4-tonne drill sample returned 203.44 carats of diamonds, giving a grade of 2.33 carats per tonne with an average value of US$29.72 per carat.

In addition, Dia Met has reported encouraging microdiamond results from one of the five kimberlites discovered in the spring 1999 exploration drilling program. A 191-kg composite sample of core that was collected from three holes drilled into pipe 99-A yielded 266 micros and 39 macros weighing a total of 0.239 carat. (A macro is defined as exceeding 0.5 mm in at least one dimension.) The three largest stones recovered weighed 0.1, 0.04 and 0.03 carat.

BHP generated a profit of about US$20 million from sales of diamonds mined at the Ekati mine in its first quarter ended Aug. 31, 1999. For the 3-month period, BHP posted an operating profit, excluding abnormal items, of US$232 million (or US13.2 cents per share) — an increase of US$2 million over the corresponding period in 1998. If abnormal items are included, earnings amount to US$306 million. BHP realized a US$73.5-million tax benefit arising from the completion of funding arrangements related to the Beenup mineral sands project in Western Australia. Operating revenue for the quarter was down 7.8% from last year, at US$3.1 million.