Sudbury Contact price jumps with diamond find at Kirkland Lake

Shares of Sudbury Contact Mines (TSE) jumped from 37 cents to 56 cents recently after the company announced the discovery of eight microdiamonds (diamonds with a diameter of less than 0.45 millimetres) in a kimberlite pipe just east of Kirkland Lake, Ont.

The diamonds, four of which are gem quality, were taken from three holes on the company’s Diamond Lake project. Indicator minerals, including garnets, chrome diopside, pyrope and illmenite, were also visible in the core samples. Results of a second batch of six samples are pending.

Sudbury Contact, an affiliate of Agnico Eagle Mines (TSE), extended its Kirkland Lake gold holdings in 1987, after kimberlite boulders were discovered in some of the nearby gravel pits. It later flew an airborne magnetic survey and followed-up with ground magnetics.

Further exploration on the 3,800-hectare property, which straddles Highway 66 between Kirkland Lake and Larder Lake, outlined a kimberlitic pipe-and-dyke structure over a 400-metre strike length. Last December, two holes intersected the kimberlite to a depth of 250 and 300 metres respectively. Financed by Agnico, the junior will launch another exploration program on the property later this year.

“We have some untested anomalies that have the same geological and geophysical expression as the Diamond Lake pipe,” says geologist Peter Hubacheck.

Detailed work will also continue around the discovery pipe.

The Kirkland Lake area has a history of diamond exploration. Since 1968, when the first kimberlite pipe was discovered, more than a dozen pipes and dykes have been found around the town better known for its gold mines. Diamonds in the area were first reported by Monopros in the early 1980s. To the north of the Sudbury Contact discovery, Regal Goldfields (CDN) holds 64 claims in Clifford Twp., where LAC Minerals once recovered eight macrodiamonds from a pipe called the C-14.

Investors have taken a shine to diamonds since Dia Met Minerals and BHP-Utah Mines discovered 81 diamonds, all less than two millimetres in diameter, in a kimberlite pipe northeast of Yellowknife, N.W.T. Dia Met, which trades on the Vancouver Stock Exchange went from 35 cents to $9 on the news.