MINERAL EXPLORATION — Spider and KWG pursue Wawa diamonds

Spider Resources (SPQ-A) and equal joint-venture partner and affiliate KWG Resources (KWG-T) have wrapped up a first phase of exploration work at their diamond property north of Wawa, Ont., alongside Lake Superior’s north shore.

Diamond fever in the area dates back to at least 1993, when two diamonds weighing more than a carat apiece were found by prospector Mickey Clement in the gravels of the Dead River ox-bow in the Michipicoten River, immediately south of Wawa.

However, diamond exploration activity only began in earnest following the discovery of six diamonds (one macrodiamond measuring 0.71 mm plus, with five microdiamonds measuring between 0.14 and 0.37 mm) in 18.1 kg of bedrock outcropping on to the Trans-Canada Highway, some 30 km north of Wawa. The discovery was made in autumn 1995 by prospector Sandor Surmacz and geologist Marcelle Hauseux.

The host rock is described as a 3-metre-wide, steeply dipping, xenolith-rich, mafic-to-ultramafic dyke, which crosscuts felsic and agglomeratic Archean mafic-to-ultramafic tuffs. These tuffs, which are about 25 metres thick, are highly altered, xenolith-rich and composed of amphibole and chlorite.

Resampling of the discovery site last autumn by Spider yielded 64 diamonds, including eight macrodiamonds recovered from 68 kg of bedrock. (A macrodiamond is defined as having one dimension 0.5 mm or greater.)

Overall, 53 of those diamonds were described as clear whites of varying crystal morphology, whereas 54 were fragmented crystals. Spider interprets the fragmentation as being indicative of rapid cooling — a result of the crystals’ descent from the atmosphere through waters following the explosive volcanic event that originally brought them to surface. Spider postulates that this instantaneous cooling in water and subsequent accumulation of tuffaceous material may explain this somewhat rare diamond occurrence.

The discovery is considered geologically significant insofar as any accumulation of tuff requires a nearby volcanic vent, which, so far, remains unfound.

Regional geochemical and till sampling by the Ontario Geological Survey over the past few years suggests that there are numerous sources of diamond-bearing rock in the Wawa area.

Spider’s $500,000 spring and summer exploration program was designed, in part, to locate and sample the postulated nearby vent. Activities included mapping and geophysical surveying, as well as the taking of 367 till samples and 103 rock samples.

The six original diamond-occurrence sites were resampled, constituting 36 individual rock samples of the 103 samples. Each of these sites had six 25-kg samples taken, which were then blended to create a 150-kg composite sample representative of each site.

The best initial results from Spider’s summer program were the recovery of 95 diamonds, including 15 macrodiamonds, from a 164.7 kg sample taken from a previously sampled roadcut on the western side of the Trans-Canada Highway, 25 km north of Wawa. The largest of the 95 diamonds is described as a white transparent fragment measuring 0.82 by 0.76 by 0.65 mm.

The 164.7-kg sample, analyzed via caustic dissolution by Lakefield Research, graded 27 carats per hundred tonnes (cpht). Earlier sampling of 28.3 kg of rock from the same outcrop yielded eight diamonds, including two macrodiamonds, for a sample grade of 14 cpht. Combining the two samples results in a grade of 25 cpht based on a 193 kg sample.

So far, no valuation of the diamonds has been performed.

Lakefield Research has advised Spider that the remaining results will be available from the rock samples by the end of November.

Consorminex of Hull, Que., which is processing the till samples for heavy indicator minerals, has yet to set a completion date for its work.

The results will guide the next phase of exploration envisioned for the autumn.

Last January, Spider solidified its position in the area by signing a 5-year exploration licence agreement with Algoma Central Corporation (ACC), allowing Spider exclusive exploration access to 222 sq. km of ground centred on the Sandor discovery.

ACC retains a royalty of 3% on any minerals exploited, with each half per cent being purchasable by Spider for $2 million once the exploration licence is converted to a lease agreement (which allows for additional exploration, development and commercial production, diluting ACC to a 1.5% royalty on any minerals exploited).

An additional 20% net sales interest royalty is due to the original prospectors. This royalty can also be bought back by Spider in a staged buyout for an amount totalling $6 million.