Diamonds North recovers macros from Qavvik (April 16, 2007)

Vancouver — Caustic fusion processing of material from Diamonds North Resources’ (DDN-V, DDNFF-O) second drill hole at its Qavvik kimberlite, in Nunavut, returned 515 diamonds including 15 stones categorized as macros.

The diamond tally came from 397 kg of kimberlite extracted by last year’s reverse-circulation (RC) drilling at Qavvik, which is situated on the company’s more than 8,000-sq.-km Amaruk property in the Pelly Bay region.

The 15 macrodiamonds each had at least one dimension of 0.5 mm or greater. A strong proportion of the diamonds are described as white, octahedral, with good clarity.

“The high number of diamonds recovered from Qavvik is very promising,” said Diamonds North president and CEO Mark Kolebaba in a release.

Unlike a previous 60-kg sample that did not return any “larger” stones, the latest sample run turned over five stones caught in the larger sieve sizes (above 0.3 mm). Four diamonds were recovered on the 0.425-mm sieve and one on the 0.6-mm screen.

“These results are consistent with, if not more encouraging than, the first sample recovered from Qavvik and increase the company’s confidence in the potential for another Ekati or Diavik discovery at Amaruk,” Kolebaba continued.

Diamonds North plans mini-bulk sampling at Qavvik this upcoming season. Plans are to use a core drill rig to extract about 5 tonnes of kimberlite for a diamond count. Use of core drilling is expected to mitigate diamond breakage concerns from the previous RC rig. The company also tables more than two dozen other targets in the Qavvik area for testing this year.

The company used a portable RC drill rig extensively in 2006 on numerous targets on Amaruk. It views the tool as a cost-effective reconnaissance method to test potential kimberlites before core drills are used to follow up.

The Qavvik kimberlite was discovered in mid-2006 by drilling a 4.3-hectare magnetic anomaly. Diamonds North notes it has distinctly different characteristics from other kimberlites discovered on Amaruk. Qavvik is described as a soft, coarse-grained olivine macrocrystic kimberlite with visually identified pyrope garnets and potential upper diatreme textures. It is overlain by about 30 metres of overburden sediments.

Shares of Diamonds North perked up about 17% on the news, gaining 13 to close at 90 apiece. The company posts a $46-million market capitalization given its 51.6 million shares outstanding and has a 52-week trading range of 65-$1.30.