Diamond fever fuels staking rush in Canada’s Far North

Diamonds North Resources (DDN-V) has picked up prospecting permits covering 50,100 sq. km (12.4 million acres) in the Northwest Territories and Nunavut, based on the results of a $2-million reconnaissance exploration initiative last year.

The package of new permits granted to Diamonds North at the beginning of February is second only to De Beers Canada, which acquired 98,500 sq. km (24.3 million acres) of new prospecting permits in Nunavut and 18,600 sq. km (4.6 million acres) in the N.W.T., for a grand total of 117,100 sq. km (28.9 million acres). BHP Billiton (bhp-n) follows Diamonds North with 32,600 sq. km (8.1 million acres) of new holdings in the northern regions.

In early February, the Nunavut mining recorder issued a total of 1,137 new prospecting permits covering 189,600 sq. km (46.8 million acres) across the Far North, whereas the Northwest Territories mining recorder issued 449 permits totalling 79,500 sq. km (19.6 million acres), compared with a record 1,518 prospecting permits covering 259,000 sq. km (64 million acres) issued last year in Nunavut alone.

“The new permits represent a prospective land holding that positions the company in many under-explored terrains with indicated diamond potential,” says Mark Kolebaba, president of Diamonds North. The company’s regional exploration initiatives have led to the identification and permitting of more than 10 new project areas. One of these is on the northeastern side of Banks Island in the High Arctic.

A 50-50 joint venture, the Banks Island project was formed in 2003 with Majescor Resources (MAJ-V) on the basis of regional heavy mineral sampling results. Follow-up stream-sediment sampling returned several samples containing kimberlite indicator minerals, some of which exhibited primary textures. Based on these results, the joint venture doubled its holdings on Banks Island to 1.2 million acres, or 4,870 sq. km.

Diamonds North has also acquired, by staking, 656 sq. km of new mineral claims strategically situated between the Snap Lake and Gahcho Kue diamond projects, 235 km northeast of Yellowknife. The claims constitute the Kennap project and cover several indicator mineral anomalies. Favourable indicator mineral sampling results also prompted Diamonds North to stake the 1,200-sq.-km Tasiq project in Nunavut, 100 km south of Baker Lake.

Elsewhere, in the southern Northwest Territories, near the border with Saskatchewan, Arctic Star Diamond (add-v) secured 44 prospecting permits covering 8,280 sq. km. The permit area, referred to as the Fort Smith project, is 500 km southeast of Yellowknife and 270 km east of the Fort Smith settlement. Arctic Star acquired its position based on the results of regional sampling. Targeting only eskers, the junior collected 28 samples from which an unspecified number of kimberlite indicator minerals were recovered, including pyrope, chrome diopside, orthopyroxene and chromite. The most anomalous sample held 19 indicator mineral grains.

Heavy mineral sampling is planned for the summer, as is an airborne geophysical survey.

Arctic Star’s vice-president of exploration is Buddy Doyle, formerly the diamond exploration manager at Kennecott Canada Exploration.

Randy Turner’s Diamondex Resources (DSP-V) was granted three prospecting permits totalling 786 sq. km (194,132 acres) west of its main Lena West project. Lena West was developed as a conceptual play in 2002; it covers 25,000 sq. km of prospecting permits in the lower Mackenzie River Drainage of the Northwest Territories, 200 km southeast of Inuvik and 900 km northwest of Yellowknife. The project area, west of the Slave Craton, was acquired based on the results of reconnaissance stream-sediment sampling in 2002.

Diamondex’s experienced technical team theorized that the younger sediments covering this northern portion of the Interior Platform are underlain by stable crustal material similar in areal extent to the prospective Slave Province. A study of the Tertiary river drainages and Quaternary glaciation cycles by Nikolai Pokhilenko concluded that the Lena West project area was a possible source for documented alluvial diamond occurrences in the Klondike and Yukon River areas. Pokhilenko is a Russian geoscientist who has served as a technical advisor to Diamondex and its predecessor company, Winspear, since 1994.

A first pass of widely spaced stream-sediment sampling across the project area in 2002 revealed anomalous concentrations of kimberlite indicator mineral grains, including pyrope garnet, picroilmenite and (more rarely) chromite. Indicator minerals were found in 94% of the samples. The recovered pyrope garnets included G9s and G10s.

“We knew that these indicators were not sourced from the Slave Province but from somewhere close,” said Diamondex President Randy Turner during a presentation last year at the convention of the Prospectors & Developers Association of Canada, in Toronto. Morphology studies would suggest some of the kimberlite indicator minerals had travelled no more than 5 km.

“We felt, following the sampling program, that we had discovered a new kimberlite province with the potential for several kimberlite clusters,” said Turner. In the summer of 2003, three field crews collected more than 1,000 stream-sediment samples from the project area. Sampling has proved to be an effective exploration method for Diamondex since much of the project area is boggy with poor till development. The area is dissected by numerous rivers, lakes and streams.

Diamondex crews use a unique method to recover the heavy minerals by panning the samples while out in the field; a method introduced to the company by its Russian geologists. The panning technique involves using the stream or lake water to wash and sieve a 60-kg sediment sample through a 2-mm screen. The plus-2-mm material is discarded and, using a wooden pan, the minus 2-mm material is panned to remove the light fraction. The sample is then dried and further sieved to remove both fine and coarse material. The remaining sieved sample is then ready for processing.

The entire project area, along with claims staked in 2002 and 2003, was flown by 136,500 line km of magnetic geophysical surveys at 300-metre line spacings. The survey was designed to look for “big pipes.”

Said Turner: “We had several promising mag targets from this survey, and we established there were anomalous concentrations of pyropes, ilmenites and chromites.”

Diamondex recovered four microdiamonds, the largest of which measured 1.5 mm in one dimension.

More than 80 geophysical targets ranging in size from 300 to 1,000 metres in diameter were detected. Twenty of the higher-priority anomalies were further investigated with ground geophysical surveys. Last summer, a further 1,094 stream-sediment samples were taken from the project area. So far, about 30% of these samples have been picked for indicator minerals. Initial results again show anomalous concentrations of ilmenite and fresh pyrope grains of lherzolitic and harzburgitic peridotite, with a significant portion of G10s.

During the fourth quarter of last year, 862 metres of diamond drilling were carried out on the Lena West property without encountering any kimberlite. Three geophysical targets were tested by six holes ranging in length from 60 to 224 metres. All the drill setups were vertical, with the exception of one angled hole that was lost in overburden. Much of the recovered core is dominated by poorly lithified mud-siltstone. Tests are endeavouring to determine if this material created or contributed to the distinctive magnetic signatures obtained from airborne and ground geophysical surveys.

In addition to the new prospecting permits recently acquired, Diamondex staked 20 claims totalling 110 sq. km over targets outlined by the 2004 airborne survey. These magnetic targets were staked between Norman Wells and Tulita, N.W.T., 200 km south of the Lena West prop
erty.

Diamondex has proposed a $4-million exploration budget for Lena West in 2005. In March, geophysical crews will begin testing follow-up targets on the ground in preparation for drilling in April. Further heavy mineral sampling will resume in June.