Diamonds North proves up its name

While it’s still a ways off from its goal of finding Canada’s next big diamond mine, Diamonds North Resources (DDN-V, DDNFF-O) is moving closer — recently pulling up more than 500 diamonds from one kimberlite at its Amaruk property, in Nunavut.

The news set the company’s share price alight, with the stock shooting up almost 100%, or 77, to $1.55 apiece on over 10 million shares traded. At presstime, the shares had retreated somewhat to $1.42. Diamonds North has roughly 60 million shares outstanding.

In all, 550 diamonds were pulled from 81.75 kg of rock at the Tuktu-1 kimberlite — the third diamond-rich kimberlite found within the 1,600-sq.-km central block at Amaruk (the other two being the Char and Qavvik kimberlites). The entire property is roughly 8,000 sq. km.

The breakdown of diamond recoveries was as follows: the 0.106-mm sieve recovered 269 diamonds, the 0.15-mm sieve recovered 158, the 0.212-mm sieve 73, the 0.3-mm sieve 37, the 0.425-mm sieve 11, and the 0.6-mm sieve recovered two stones.

The total amount of diamonds averages out to seven diamonds per kg — much higher than the one diamond per kg that is often used as a benchmark.

Also positive is the quality of the diamonds, with over 90% of those recovered from the 0.3-mm mesh being white, and the majority being clear octahedral crystals.

Diamonds North says it plans to do a bulk sample on the kimberlite in the near future.

In all, 22 kimberlites have been discovered on the property. Results from 18 of those — eight of which are situated in the Tuktu area — are pending.

The Tuktu-1 kimberlite sits roughly 15 km from the Qavvik kimberlite, which also lies on the property.

The company recently announced results from two reverse-circulation drill-hole samples at Qavvik, as well.

A 72.8-kg sample at Qavvik-3 yielded 183 diamonds, while a 65.7-kg sample at Qavvik-4 yielded 129 stones.

The company says all 17 diamonds on or above the 0.3-mm mesh are white with a high proportion of clear octahedral crystals.

Back in March 2007, Diamonds North announced that 515 diamonds were recovered from 397 kg of kimberlite at Qavvik. The third kimberlite cluster, known as Char, sits roughly 30 km from Tuktu. A sample at Char yielded 178 diamonds from 159.35 kg.

The Amaruk project sits in the Pelly Bay diamond district of Nunavut.

Diamonds North has roughly $9.4 million in cash and marketable securities available — $7 million of which is cash.

Nancy Curry, a spokesperson for Diamonds North, says that while the company it has sufficient funds for its immediate exploration needs, the exact dollar figure for the 2008 exploration budget won’t be known until results from the 18 kimberlites and the larger samples from Char — due in about a month — come in.