Partners plan Buffalo Hills hunt

Ashton Mining of Canada (ACA-T), Alberta Energy (AEC-T) and Pure Gold Minerals have approved a three-pronged work plan for the Buffalo Hills property in north-central Alberta in 2002.

Firstly, the partners intend to complete a 6-to-8-hole delineation drilling program on the K252 kimberlite. The holes will aim to clarify the relationship between the geophysical signature of K252 and its potential size. Pending positive results, the partners plan additional bulk sampling.

In May of 2001, a 22.8-tonne, mini-bulk sample collected from K252 returned a total of 12.54 carats of diamonds for an estimated diamond content of 55 carats per hundred tonnes.

The K252 pipe shows two distinct phases; an upper fine to medium-grained volcaniclastic kimberlite and an underlying kimberlite breccia. The bulk sample was collected from three reverse circulation holes near the centre of the pipe. Both phases of kimberlite were intersected in each hole under 74.1, 69.5 and 74.7 metres of overburden, respectively.

In all the sample comprised 13.4 tonnes of volcaniclastic kimberlite and 9.4 tonnes of kimberlite breccia. The volcaniclastic portion yielded 4.51 carats of macrodiamonds (greater the 8 mm in size) for a diamond content of 33.7 carats per 100 tonnes, while the breccia surrendered 8.03 carats to average 85.4 carats per 100 tonnes.

The breccia relinquished the largest stone, a 0.94-carat colourless composite crystal. A colourless 0.65-carat stone was recovered from the volcaniclastic phase.

The second phase of the planned program will entail ground geophysical surveying over several known magnetic and electromagnetic in anticipation of follow-up drilling.

Lastly, the partners will complete a campaign of airborne electromagnetic surveying aimed at identifying new anomalies on the property.

So far, 36 kimberlite bodies have been discovered on the property with 24 of them containing diamonds.

A 223.3-kg sample collected from the K281 kimberlite about 15 km southeast of k252 returned 7 diamonds. The kimberlite body was cut by two drill holes at 37 metres and 80 metres depth, respectively. The low diamond count put further work on the back burner for the time being. Initial data suggests the pipe could cover a 500-by-300-metre area.

Ashton and Alberta Energy each hold a 45% interest in the Buffalo Hills project. Pure Gold has the remainder.

Earlier this week, Alberta Energy agreed to merged with PanCanadian Energy (PCE-T) and form EnCana Corp., a natural gas and oil giant with $27 billion in assets.

Under the proposed deal, Alberta Energy shareholders will receive 1.472 common shares of PanCanadian for each AEC share held. As a result, AEC shareholders will own 46% of the new company and PanCanadian shareholders would have 54%.

The deal is subject to the approval of shareholders, who are slated to vote in early April.