Kennady Lake kimberlite rises in value

A revised model of the 5034 kimberlite at Kennady Lake in the Northwest Territories has increased the value of the pipe’s stones.

Based on results from this year’s bulk-sampling of 5034, together with previous mini-bulk sample and microdiamond results, De Beers Consolidated Mines (DBRSY-Q) has modelled a kimberlite resource of 12 million tonnes averaging a grade of 1.64 carats per tonne to a depth of 300 metres. De Beers estimates the 5034 diamonds are worth an average of US$63 per carat, which translates into an implied value of US$103.50 per tonne. By comparison, the earlier, preliminary estimate was 15 million tonnes averaging 1.6 carats at US$51 per carat, equivalent to US$82 per tonne.

Property-owner Mountain Province Mining (MPV-T) says the rise in estimated value is consistent with the number of good-quality larger diamonds recovered in the bulk sample. The 1999 bulk sample returned 42 stones weighing greater than 1 carat. The three largest diamonds recovered were 10, 4.9 and 4.85 carats.

In total, 1,044 carats of diamonds above a commercial-size, 1.5-mm square-mesh cutoff were recovered from 609 tonnes of drill samples from the 5034.

Last winter, Monopros, the exploration arm of De Beers, collected bulk drill samples from a cluster of four pipes at Kennady Lake (5034, Hearne, Tuzo and Tesla) as part of a $14-million program designed to obtain a sufficiently large number of diamonds for a determination of grade and diamond values for each pipe. Monopros will use this information to decide whether or not to proceed with a bankable feasibility study.

Situated 320 km northeast of Yellowknife and 120 km southeast of Lac de Gras, Kennady Lake constitutes a portion of the AK-CJ properties, in which Monopros can earn up to a 60% interest by advancing the project to production. Mountain Province is carried to a 36% interest, whereas partner Camphor Ventures (CFV-V) is carried to 4%.

The 5034 pipe was discovered in 1995 by drilling a magnetic low at the head of an east-westerly trending kimberlite indicator mineral train, which ended on the western shoreline of Kennady Lake. Monopros has subdivided the pipe, on the basis of internal geology, into a west, centre and east lobe, as well as a north lobe that partly extends under land.

Monopros optioned the AK-CJ properties in early 1997 and immediately flew an airborne helicopter magnetic and electromagnetic (EM) survey, with 50-metre line spacing, over the southern portion of the AK claims. Particular attention was paid to the area around the 5034 pipe.

Later that year, Monopros drill-tested several EM anomalies in Kennady Lake and discovered the Tesla, Tuzo and Hearne pipes — all in a 1-km radius of the 5034. In 1998, Monopros collected 50-tonne mini-bulk samples from each of the pipes to determine preliminary grades and valuations. During this year’s bulk-sampling program, 1,666 tonnes of kimberlite were extracted from 43 vertical holes drilled into the four pipes. In total, more than 575 tonnes were extracted from the 5034 pipe, 454 tonnes from the Hearne body, 460 tonnes from the Tuzo kimberlite and 177 tonnes from Tesla.

De Beers recovered 64 carats of diamonds by processing 184 tonnes of sample from the Tesla pipe for an indicated grade of 0.35 carat per tonne (compared with the previous estimate of 0.37 carat per tonne). The largest diamond recovered weighed 2.7 carats. This year’s valuations are not yet available, though previous valuations made on the 1998 mini-bulk test sample averaged US$96 per carat.

Tesla is the smallest of the four pipes sampled, with a revised resource estimate of 4.6 million tonnes, up from an earlier estimate of 4 million tonnes.

The Hearne pipe hosts 6.9 million tonnes to a depth of 300 metres. A 469-tonne bulk sample yielded a previously reported 846 carats for an indicated grade of 1.8 carats per tonne. The largest diamonds recovered were 3.37 and 3.16 carats, respectively. In total, there were 40 stones greater than 1 carat. Diamond valuations are pending. Based on last year’s test sample, Hearne was modelled to grade 2.33 carats per tonne at US$44 per carat. The largest diamond recovered in the 1998 test sample was 1.87 carats.

The resource in the Tuzo pipe increased to 15.3 million tonnes to a 360-metre depth from an earlier estimate of 9 million tonnes to 300 metres. In total, 533 carats were recovered from a 523-tonne bulk sample, giving an indicated grade of 1.02 carats per tonne. Twenty diamonds weighed in excess of 1 carat, the largest being 3.38 carats. Tuzo was previously modelled to grade 2.2 carats per tonne at US$68 per carat. Revised valuations for the Hearne body are expected shortly, with those for the Tuzo pipe to follow at a later date.

During this past spring, Monopros discovered a fifth pipe, called Wallace, between the Hearne and 5034 kimberlites. The discovery hole yielded 9 macrodiamonds and 72 micros from 40 kg of kimberlite. (A macro is defined as exceeding a screen size of 0.5 by 0.5 mm.) Based on the available information, Monopros believes the maximum dimension of the pipe is unlikely to exceed 60 metres. A second body of kimberlite was intersected by drilling about 150 metres northeast of Wallace and 150 metres southwest of the 5034 pipe. An 80-kg sample returned five macros and 284 micros. At this stage, Monopros is uncertain whether this new kimberlite represents a new body, or if it represents an elongated continuation of the Wallace pipe.

Monopros reopened the Kennady Lake camp in November and has resumed exploration drilling on the Faraday kimberlite body, discovered last spring 12 km northeast of the Kennady Lake cluster. An angled hole intersected 34 metres of kimberlite between 38 and 72 metres of depth, giving a horizontal projection of 22 metres. A 40-kg sample yielded six macros and 82 micros. A second hole, collared nearby, intersected successive narrow intervals of kimberlite, varying from 2 to 7 metres in thickness. A ground geophysical survey grid was conducted over the area to define the target.