DHK discovery boosts Lac de Gras potential

Another significant diamond find in the Northwest Territories has removed any remaining doubts about the potential for economic deposits outside the 800,000-acre block held by partners Dia Met Minerals (TSE) and BHP Minerals Canada.

About 22 miles south-southwest of the diamondiferous Point Lake pipe, Kennecott Canada discovered 39 microdiamonds and 15 macrodiamonds in the first three holes drilled on DHK Resources’ Tli Kwi Cho kimberlite pipe. The core samples weighed a total of 89.4 kg.

Hole 27-3 returned 40 diamonds (including 11 macros) from 60 kg of kimberlite compared with 81 diamonds (16 macros) from 59 kg of core in Dia Met’s Point Lake discovery hole.

But because grades vary considerably in diamond-bearing kimberlites, the sample is too small for any conclusions to be drawn about the feasibility of the new pipe.

“Obviously much more work on this and other targets on the WO block is warranted, but this news dispels the stigma in the play that Dia Met and BHP had the only good ground,” says analyst David James of Richardson Greenshields.

Only the clear and colorless stones were included in the count of the Tli Kwi Cho diamonds, while translucent stones and yellow-synthetics were set aside by Lakefield Research. No carat weights or stone qualities were reported. Wary of their competitors in the area, officials at Kennecott Canada are reluctant to say more about the find.

Kennecott and its associates, SouthernEra Resources (TSE) and Commonwealth Gold (VSE), have the option to earn a 65% interest in DHK’s WO, WI and DHK claim blocks. If the option is exercised, the partners in DHK Resources — including Dentonia Resources (VSE), Horseshoe Gold Mining (ASE) and Kettle River Resources (VSE) — would each retain an 11.7% interest in the ground. Kennecott would have a 40% interest while SouthernEra and Aber would each hold 10%. The remaining 5% would be held by Commonwealth.

News of the discovery took shares of the publicly traded participants to new heights and helped the Toronto Stock Exchange break previous trading records. Kettle River leapt to a new high of $12.88 from $3.50 before profit-takers drove the price down to $9.00 just before presstime.

The Tli Kwi Cho pipe was discovered on a twin magnetic high anomaly with an estimated surface area of 100 to 200 acres. A till sample taken 2,000 ft. down-ice from the geophysical target returned three G-10 garnets and eight chrome diopsides.

The geophysics turned out to be more complex than anticipated, and Kennecott drilled four core holes before intersecting enough kimberlite (300 ft.) to fulfil the objectives of the drilling program. Samples from the fourth hole are being processed.

To date, Kennecott has tested five geophysical targets yielding three separate kimberlites, including Tli Kwi Cho and “Anomaly 29.” Among the targets tested was the Bullet Hole anomaly to the south.

A lot more delineation drilling is required before the size and geometry of Tli Kwi Cho can be determined, says DHK President George Stewart. Plans for a bulk sample of the pipe, which is partially covered by a lake, have yet to be discussed.

The drilling program, operated out of the Echo Lake camp, continues. Tli Kwi Cho sample results:

Hole Sample Micro- Macro-

Weight (kg) diamonds diamonds

27-1 0.4 0 1

27-1 15.5 6 2

27-2 10.5 4 1

27-3 16.6 8 0

27-3 14.9 12 5

27-3 16.2 5 3

27-3 12.3 4 3

— For more diamond exploration coverage, see Page 14.