Cominco, Teck fund Gerle to join N.W.T. diamond play

The Lac de Gras diamond play, which has so far been dominated by international majors, recently welcomed two of Canada’s leading mining companies.

Affiliates Cominco (TSE) and Teck (TSE) have agreed to finance diamond exploration in the Slave province of the Northwest Territories on ground held by Gerle Gold (VSE).

Although Gerle President Raymond Hrkac declined to comment on the location or size of his claims, he says the company has spent $400,000 on land acquisition and airborne surveys. Under an exclusive contract with Aeroquest, a total of 20,000 line km have been flown and 59 magnetic anomalies representing potential kimberlite pipes identified.

Meanwhile, Pure Gold Resources (TSE) wrapped up a previously announced deal (T.N.M., Sept. 21/92) with Australian diamond producer Ashton Mining to explore claims near Lac de Gras. Pure Gold will finance reconnaissance sampling and geophysical surveys while Ashton will have the option to finance target evaluation, drilling and bulk sampling.

Under the memorandum of agreement among Cominco, Teck and Gerle Gold, the majors will make a private placement of two million shares of Gerle at 25 cents per share and have the option to purchase a further 1.7 million shares at 30 cents per share by Jan. 31, 1993.

The proceeds will be used for exploration, land acquisition and general corporate purposes in 1992-93.

Cominco and Teck will then have the option of spending a minimum of $500,000 in 1993 and $500,000 in 1994 to select specific targets on or before June 30, 1995.

For each target selected, the majors must pay the company $50,000 and spend $50,000. After spending $500,000, Cominco/Teck will have earned a 100% interest in the target. Gerle will retain a 4% net profits interest up to $1 million per year, and 20% thereafter.

Meanwhile, two diamonds from the Sweetgrass Hills region of southern Alberta have been submitted to Roger Morton, a professor of economic geology at the University of Alberta, for analysis.

Dia Met Minerals (VSE) also reports that “anomalous diamond indicator minerals of compositions favorable for diamonds have been identified in several drainage systems” in the Foothills region. Dia Met shares two large claim blocks in the province with Cameco (TSE) and Uranerz Exploration and Mining.

The two diamonds submitted to Morton, reportedly discovered in 1988 by placer miner Tom Bryant, are of gem quality and weigh 0.14 and 0.17 carats respectively. They represent Alberta’s first documented diamond discovery. Bryant, who has joined a syndicate that holds ground in the area, told The Edmonton Journal that he decided to disclose his find “to let people know that those who are staking aren’t on drugs — diamonds really do exist.” Mineral permit applications in Alberta currently represent about 11 million acres, while existing agreements cover another 2.72 million acres. But skeptics say hoaxes and salting are legendary in the diamond business. And even if the find is authentic, its source could lie anywhere on the Archean craton stretching from Wyoming to the Coronation Gulf in the Northwest Territories.

Takla Star Resources (ASE) recently applied for mineral permits covering 172,800 acres near Legend, Alta., increasing its total application area in Alberta to just over three million acres. The company says its Ram River block was selected to secure an area considered to be a favorable environment for lamproitic diatremes. The block lies along strike and to the east of Dia Met’s diamond-bearing Jack lamproite pipe on the British Columbia-Alberta border.

Gwen Resources (ASE) has applied for 23,0000 acres northeast of Edmonton and has entered into an agreement to earn a 50% interest in a separate, nearby claim block held by Keystock Financial Corp.

In other diamond developments:

n British investors have agreed to purchase 3.4 million units of Lytton Minerals (TSE) at 30 cents to raise $1.02 million for diamond exploration. Lytton is sampling on its 1.1-million-acre property near Lac de Gras. More than 800 30-lb. samples have been collected and shipped to Vancouver for analysis.

Each Lytton unit will consist of one share and one half a warrant. A full warrant will entitle the holder to purchase one share for 35 cents before April 30, 1994.

— Ansil Resources (CDN), whose royalties on the Ansil mine in Quebec were recently purchased for $4 million, has agreed to buy 100,000 flow-through shares of Regal Goldfields (CDN) at $2.50 per share. Proceeds will be used to explore Regal’s A-4 diamond-bearing pipe near Kirkland Lake, Ont. A 50-tonne bulk sample is planned to follow up results of a previous 8-tonne sample that returned two diamond fragments. Work will also continue on Regal’s C-14 and B-30 pipes.

— Kennecott Canada has told Teryl Resources (VSE) and Calco Resources (VSE) that it intends to exercise its right to earn a 65% interest in the Amad claims next to the BHP-Dia Met claim block at Lac de Gras. The agreement calls for cash payments of $60,000 and expenditures of $3.25 million by May, 1996. Diamond indicator minerals, including eclogitic garnets, have been found around six of seven geophysical targets identified on the claims. — A phase-one sampling program on ground held by Barexor Minerals (ME) at Aylmer Lake, N.W.T., has identified several pyrope garnets and olivine minerals.

— Tanqueray Resources (ASE) has increased its landholdings in the Lac de Gras area to 152,506 acres through an agreement with Fibre-Klad Industries (ASE), whose claims adjoin Tanqueray’s to the north. Tanqueray will hold a 58% interest in and be the operator of the unitized claim block and retain a 2% royalty on its original claims.

— A 6-month, $400,000 sampling and evaluation program is under way at the Leicester diamond mine in South Africa, say partners Stow Resources (VSE), Dryden Resource (VSE) and SouthernEra Resources (TSE). About 80,000 tonnes of calcrete need to be stripped before 9,000 tonnes of fresh kimberlite can be sampled. The partners hope to obtain a “reasonable parcel of diamonds” (300-500 carats) from the 21-acre kimberlite to establish the stones’ size and quality.

— A marine diamond concession held by Consolidated Diamond Mines, a De Beers subsidiary, has yielded 3,988 gem-quality diamonds, or 1,887 carats since the first sampling voyage in September, 1991. De Beers has told partners Canadian Overseas Exploration (VSE) and Benguela Concessions — who share the mining rights on the concession — that large increases in the joint venture’s production would not be acceptable under the present sales climate for diamonds.