Kirkland Lake diamond find attracts handful of juniors

Since Sudbury Contact Mines (TSE) reported its discovery of eight microdiamonds on its Diamond Lake project a handful of companies have moved into the Kirkland Lake, Ont., region to stake more ground and begin exploration work.

Despite accusations that they are simply attempting to ride the coat tails of the Lac de Gras, N.W.T., diamond exploration campaign, Kirkland Lake players are optimistic about the chances of an economic discovery. In a recent interview with The Northern Miner, Prospector Joseph De Felice says the Kirkland Lake region has several advantages over the Lac de Gras area where remote conditions make exploration expensive.

De Felice is President of Findore Minerals, (CDN) which is gearing up for a diamond exploration joint venture with Strike Minerals (CDN) in Tannahill Twp., about three townships to the north of the Sudbury Contact discovery. Whereas much of the vast area staked recently in the Northwest Territories has never been mapped before, De Felice says diamond explorers in the Kirkland Lake camp have access to maps and visible targets.

He also points out that the C-14 kimberlite pipe on Regal Goldfields’ (CDN) Clifford Twp. claims is the only pipe in Central Canada to have yielded diamonds larger than one millimetre. Lac Minerals (TSE) found eight macro diamonds on the C-14 before selling its diamond properties to Dia Met Minerals (VSE) in 1986. (A macrodiamond is any diamond greater than half a millimetre in diameter.)

“The important thing here is that kimberlite targets have already been established,” De Felice said.

Four of the microdiamonds, measuring less than 0.45 millimetres in diameter, were taken from Sudbury Contact’s Diamond Lake project which straddles Gauthier, McVittie, McElroy and Hearst twps. (T.N.M., April 6, 1992). Since the discovery was announced in April, Sudbury Contact has confirmed that six of 14 diamonds found on the property are gem quality. An 8-hole (3,000-ft.) program has also turned up one new kimberlite pipe and when the The Northern Miner spoke to project geologist David Christie, samples were being analyzed. “After reviewing mapping and ground geophysics, we hope to start drilling again in the fall,” said Christie.

The mini staking rush that followed the Diamond Lake find, has brought a number of other juniors including Greater Lenora Resources (TSE), Pure Gold Resources (TSE), Deak Resources (TSE), Gwen Resources (ASE) and Wheaton River Minerals (TSE) into the region. St. Genevieve Resources (TSE) affiliate KWG Resources (ME) is also active in Guigues Twp. on the Quebec side of the border.

(Further north, in Ontario’s James Bay lowlands area near the Attawapiskat River, KWG and a private British Columbia company anounced plans to explore a 40,000-acre area for diamonds. Also owning land in the Attawapiskat River area is Continental Precious Minerals (ME).)

Strike Minerals President Carl Forbes said the company had also optioned six claims in Guigues Twp. with the right to earn a 100% interest in return for $300,000 in exploration expenditures spread over three years. With five geophysical anomalies established in Elliott, Arnold, Eby and McVittie twps., Wheaton River is operating under a joint venture agreement with equal partner Strike. With the right to increase its interest to 75%, Wheaton River was set to spend about $150,000 on drilling after completing ground magnetics, said secretary-treasurer Kerry Knoll. Parent Glencairn Explorations (ASE) has the option to earn a 100% interest (under an amended agreement) in a Morrisette Twp. property held by Kinbauri Gold Corp., a dormant company controlled by geologists Chris Gleeson and Vern Ramplan. (Kinbauri retains a 15% net profit interest and may buy back up to a 25% working interest.)

Having planned to start drilling by the first week of August, Glencairn is targeting a magnetic anomaly overlain by a nickel anomaly. “We hope one drill hole will tell the story,” said Knoll.

In addition, Wheaton River recently optioned its McVittie Twp. property to Canadian Giant Explorations (VSE) in return for expenditures totalling $300,000. The McVittie claims tie onto the Sudbury Contract discovery area. Knoll says lessons learned while Glencairn was operating a small diamond mine in Brazil has taught him not to get too excited if and when the first stones are found. Glencairn’s 240 cubic metre-per day open pit mine (known as the Feijao Cru) was closed last year due to lower-then-expected volumes, even though the company was mining near a test pit where bulk sampling had yielded 669.69 carats of diamonds from an average grade of 1.24 carats per cubic metre. About 80% of those diamonds were gem quality selling for US$125 per carat.

Like its competitors, Wheaton River must also contend with unfavorable odds that are the norm in diamond regions like South Africa, Australia and the Northwest Territories. Typically, kimberlites occur in clusters of 30-40, but historically as few as two — if any — prove to be economic. Analysts also warn that of the 5,000 kimberlite pipes discovered around the world so far, about 1,000 contain diamonds but only about 50 contain diamonds in economic quantities that justify recovery. If that isn’t enough, active juniors are faced with trying to fund exploration programs amid unfavorable market conditions.

“This is certainly a frustrating time to raise money,” said Regal Goldfields Chairman Doug Bannerman, who is attempting to secure $2 million for further exploration on the C-14 pipe in Clifford Twp.

Ironically Goldfields was able to acquire the 64 claims on which the C-14 is located only because Dia Met failed to renew its mining licence and after a claim dispute Dia Met now owns a 2.5% royalty on the property. Dia Met is one of the key players in the Lac de Gras diamond hunt.

Through a public offering of 500,000 flow through shares at $2, Regal is trying to raise enough money to run a ramp into the 5-acre C-14 pipe and extract a 5,000 ton bulk sample. Meanwhile the company has acquired two more properties in Morrisette, Gauthier and McElroy twps. and is bidding for a third. “Three majors have shown interest, but we have seen no cheques,” said Bannerman.

In Eby Twp. to the southwest, Greater Lenora has identified kimberlite indicator minerals, including chrome diopside and pyrope garnets in samples collected during a 1987 reverse circulation program. A follow-up exploration program comprised of trenching and drilling was planned by Greater Lenora. Other Kirkland Lake diamond players include Pure Gold Resources, which holds 44 leased and patented claims in Hearst and McElroy twps. located immediately southwest of the Sudbury Contact discovery. A group lead by Donald Sheldon of Vancouver recently secured a 56.9% interest in Pure Gold from Noramco Mining and Gothic Resources.

Meanwhile, Sudbury Contact is getting financial backing from majority shareholder Mentor Exploration (TSE), which in turn is controlled by Agnico-Eagle Mines (TSE). De Felice says he is attempting to arrange a rights offering to fund exploration in the Kirkland Lake camp.