Central Canada’s diamond hunt gets second wind

Diamond exploration in central Canada is getting its second wind following a number of promising developments.

Although Ontario and Quebec were hopping in the mid-1990s, when financing for diamond exploration was widely available, economic discoveries in the Northwest Territories eclipsed any early success in the region. Financing for projects outside the Territories all but disappeared as investors shied away from junior mining stocks in the wake of the 1997 Bre-X scandal. But promising new discoveries and advanced exploration work by De Beers, the global diamond giant, has reawakened the search for central Canada’s first diamond mine.

The hotspot is the James Bay Lowlands, where the Canadian unit of De Beers Consolidated Mines (DBRSY-Q) is extracting a 10,000-tonne bulk sample from the Victor pipe near Attawapiskat, Ont. The world’s largest producer of diamonds was uncharacteristically upbeat about the project at the World Diamond Conference held in Toronto last June, although grades have yet to be reported.

De Beers has built an 80-man construction camp on the site and a 3.3-kilometre extension to an existing winter road. Processing and diamond recovery from the Victor sample was expected to continue through the summer at a 10-tonne-per-day on-site pilot plant. The results will allow De Beers to predict diamond grade, value and resources.

The company did not respond to queries about the current status of the project.

Through its Canadian prospecting arm Monopros, De Beers has been active in the James Bay Lowlands since at least the mid-1980s. The Victor pipe was discovered more than 10 years ago, but diamond indicator mineral results from the kimberlite were mediocre and De Beers moved its focus to the Northwest Territories.

A couple of years ago, De Beers returned to the Attawapiskat River region, where the company holds rights to 20 kimberlite pipes, and took a mini-bulk sample on Victor. Results were encouraging enough to warrant further work.

“One doesn’t take that decision too lightly because there is fair amount of money (several million dollars) involved in taking a 10,000-tonne bulk sample in such a remote area,” says Rory Moore, president and CEO of Canabrava Diamond (CNB-V), which also holds a substantial ground position in Attawapiskat.

Indeed, it is the expense and hardship of exploring for diamonds in the James Bay Lowlands that have prevented intensive exploration to date, even though the area has been considered prospective for diamonds since 1899, when W.H. Hobbs said it was the most likely origin for diamonds found in the northern United States.

The region is a favourable environment for diamonds because it consists of platform sediments overlying Archean basement rocks, a common setting for economic diamond deposits worldwide.

The discovery of kimberlite indicator minerals in the area in the 1960s strengthened Hobb’s theory and, by the early 1980s, BP Canada/Esso had found 30 diatremes in the area. One of those had traces of diamonds, but BP concluded that the stones had fallen off the drill bit.

In 1988 Monopros found a cluster of 15 kimberlites along the Attawapiskat River and, in 1994, junior KWG Resources (KRL-V) discovered its first kimberlite in the region. KWG is now working with joint venture partner Spider Resources (SPQ-V) to drill test the Kyle 3 dyke, one of several kimberlite bodies outlined since the junior’s original find. Kyle 3 returned 55 microdiamonds and seven macrodiamonds from a 6-metre section of a recent drill hole. The near-vertical, dyke-like body remains open to the west.

Junior Dia Bras Exploration (DIB-M) is also active in the area, having just completed an airborne geophysical survey over 5,000 sq. km near the Monopros pipes. The survey identified a number of drill targets.

Meanwhile, Canabrava and Navigator Exploration (NVR-V) have acquired about 160 sq. km of ground in the vicinity of the Victor pipe and are flying a second geophysical survey over the area to pinpoint drill targets.

“The plan is to commission a drill program immediately after freeze-up,” says Moore. Navigator can earn a 50% interest in the project from Canabrava by spending $1.7 million on exploration over two years.

Canabrava is also involved in diamond exploration further south, near Wawa, Ont., where the Ontario Geological Survey outlined several indicator mineral anomalies. Canabrava followed up the anomalies, discovered a kimberlite dyke, then optioned a large land package to Kennecott , a division of Rio Tinto (RTP-N).

Kennecott has the right to acquire a 60% interest in the ground by spending $25 million in seven years, including $1.5 million by the end of this year, or by advancing the project to a production decision. The land package includes the 100%-owned Whitefish Lake project and the KAP and Rocky Lake projects, owned 50% by Canabrava and 50% by Paramount Ventures (PVF-V) and Finance Inc.

Also active in the Wawa area is Band-Ore Resources (BAN-T), which has extracted high diamond counts (10 macrodimaonds) from a 63-kilogram sample of a lamprophyre dyke. A third drill hole completed over the summer has been sent for diamond analysis. Band-Ore hopes to continue exploration, including mapping, stripping outcrops, sampling and drilling.

Other diamond hopefuls working in the region include Diadem Resources (DIR-M) and Tri Origin Exploration (TOE-T).

The hot spot for diamond exploration in Quebec is the east coast of Ungava Bay in the northern part of the province, where Twin Mining (TWG-T) is using $8.8 million raised in a tough financing market to launch a major exploration program. A dyke system on the company’s Torngat property returned encouraging results in two of five 10-tonne samples. Some of the diamonds recovered measured over three millimetres.

Twin Mining initiated diamond exploration in the Torngat Mountains after identifying a cluster of kimberlite dykes on computer-enhanced aerial photographs. One of the dykes, Torngat 1, was sampled as part of a research project by a Universit du Qubec Montral professor in the early 1990s and was found to contain diamonds, but the significance of the find was not recognized at that time.

Saskatchewan Research Laboratory, which processed the diamonds from the latest sampling program, described them as high quality, white and transparent. However, the samples are not big enough to allow a meaningful determination of grades and values.

Twin Mining is awaiting results of the final three samples and selecting a site for a 500-tonne mini-bulk sample to determine diamond grade.

Band-Ore is also exploring the area in a 50-50 joint venture with Southern Africa Minerals (SAF-T). A sampling program is expected to cover structural trends similar to those that host the diamondiferous dykes on the Twin property. Marum Resources (MMU-V) is also active in the Torngat Mountains region, where it has picked up about 250 sq. km of ground covering aeromagnetic and satellite imagery targets.