Shear puts its nose to the grindstone at Jericho

Since announcing a gutsy move to acquire the past-producing Jericho diamond mine in Nunavut last year, Shear Diamonds (SRM-V) has been doing the hard work necessary to determine if there’s life yet in the operation.

In October, a new geological interpretation and model of the complex Jericho kimberlite was completed.

A review of the geology of the kimberlite identified 12 kimberlite types and 13 domains. With that new model, Geostrat Consulting Services is working to identify “manageable mining parcels that can be evaluated for grade modelling and/or reconciliation,” the company said in a release.

Four of five holes drilled into the kimberlite this summer hit kimberlite outside the old model, indicating potential for greater tonnage.

An examination of historic indicator mineral dispersal train data (conducted with Mineral Services Canada) found 20 indicator mineral dispersal trains in and around the Jericho area that aren’t explained by known kimberlites. Shear has expanded its land package in the area around Jericho based on geophysics and indicator mineral chemistry.

Data also suggest further potential in the Jericho kimberlite from a phase that either hasn’t yet been discovered, or has yet to be tested.

Shear recently announced that 200 carats of diamonds had been recovered in trial tests of the restarted plant at the operation, which has been dormant for three years. The material processed was from “coarse rejects” — kimberlite that had been through the plant when it was operated by previous operator Tahera Diamond but wasn’t processed properly.

From 22.1 wet tonnes of the stockpiled material, 200.85 carats was recovered, including 14 stones larger than 0.5 carat — the largest being 1.9 carats.

The company plans to start selling the diamonds to generate cash flow, and the test processing will generate key information on how recoveries can be improved. Shear has also hired DRA Americas to evaluate the diamond recovery plant at Jericho.

In August, Shear raised $1 million through a non-brokered private placement, selling 3.75 million common shares at 28¢ apiece.

The company has recruited new officers — a new vice-president environment and community affairs, Stephanie Autut, acting chief financial officer Richard Belfer, vice-president of operations, Chris Morton — a specialist in diamond recovery and diamond processing optimization — as well as new directors. However, Shear has also lost its vice-president exploration, Jennifer Burgess.

This summer, Shear founder Pamela Strand passed the chief executive role to Julie Lassonde, an engineer and former president of Garson Gold who joined the company last year. Strand remains president.

At presstime, Shear was trading at a new 52-week low of 14¢. The stock has traded as high as 95¢ in the last year and Shear has 45.9 million shares outstanding.