Arrangements have been made with a number of independent, diamond valuators who will examine the parcel and determine an average value on the diamonds. The valuation will commence as soon as all the diamonds have been acid-cleaned at a facility in Antwerp, Belgium. Results of the valuation are expected to be published in the first quarter.
Long perceived as consisting of little more than low-grade, highly complex geological curiosities, the Fort la Corne kimberlite field in central Saskatchewan comprises some 71 known kimberlite bodies. They are among the largest diamond-bearing kimberlites in the world in terms of shear mass, ranging up to 250 hectares (2.5 sq. km) in surface area.
By going underground on the Star kimberlite, Shore has single-handedly changed the public’s perception of the potential of these bodies. The company has consistently recovered stones weighing up to 19.7 carats during the batch-by-batch processing of some 25,000 tonnes of bulk sample. “There is an abundance of large stones and a high frequency of white goods,” says George Read, Shore’s vice-president of exploration. “These are favourable characteristics of the diamond parcel, which will augment the value.”
In terms of size, the Fort la Corne kimberlites rival the
Discovered in 1940 by Canadian geologist John Williamson, this multi-phase kimberlite has been mined continuously by open-pit methods for more than 60 years. Today, management is challenged by low-grades, increasing operating costs, and the uncertainty of an inferred resource, yet De Beers remains positive about the viability of the operation, as large gem stone-quality diamonds are consistently being recovered.
Diamond production for the Williamson mine was projected to be around 260,000 carats for 2004. Inferred minable resources at the end of 2000 stood at 114 million tonnes grading 5.7 carats per 100 tonnes, equivalent to 6.5 million contained carats. The estimate was based on a bottom stone size cutoff of 1.5 mm and a value of US$106 per carat.
At 117 hectares (1.2 sq. km), Orapa A/K1 is the largest body in a cluster of 50 kimberlites and the world’s second-largest kimberlite currently being mined. The Orapa deposit consists of two pipes that coalesce near the surface. When open-pit operations began in 1971, Orapa contained 800 million tonnes of kimberlite to a depth of 660 metres. Reserves and resources for the open-pit mine at the end of 2000 totalled 653 million tonnes grading 49 carats per 100 tonnes, equivalent to 320 million carats, including probable reserves of 274 million tonnes grading 57.8 carats per 100 tonnes, or 158 million carats. The Orapa reserve base uses a bottom size stone cutoff of 1.65 mm and a value of US$47 per carat.
In 2003, the Orapa mine produced 16.3 million carats as a result of processing 17.8 million tonnes of ore averaging a recovered grade of 99.2 carats per 100 tonnes, compared with production in 2002 of 14.3 million carats recovered from the treatment of 16.4 million tonnes grading 86.8 carats per 100 tonnes. The A/K1 pit was advanced to a depth of about 165 metres below surface at the start of 2004. The open-pit operation is expected to last about 25 years.
Unlike the Orapa or Mwadi kimberlite, which have no overburden, the Fort la Corne kimberlites lie under 100 metres or more of unconsolidated glacial cover and have no surface expression. The thick overburden cover in the Fort la Corne area has rendered heavy-mineral till sampling ineffective; instead, companies have relied on magnetic and gravity geophysical surveys.
The Star kimberlite is at the southeastern end of the main Fort la Corne trend. Shore owns all of the 98-sq.-km project, which ties on to southern boundary of the Fort la Corne (FalC) joint-venture area shared by
The 225-sq.-km land holdings of the FalC joint venture contain 63 kimberlite bodies. De Beers is the operator of the joint venture, with a 42.25% stake; Kensington owns an equal percentage; Cameco holds 5.5%; and
A main cluster comprising 52 of the FalC kimberlites form a 32-km-long, north-northwest, elongated trend, 65 km east of Prince Albert, third-largest city in Saskatchewan. The other 11 kimberlites are grouped together in a satellite cluster a further 60 km to the northeast, near Snowden. The FalC joint venture originally held 69 kimberlite bodies, but its holdings were trimmed in recent years and some of the lower-priority satellite kimberlites in the Weirdale and Foxford areas were sold off. Each of the known bodies was tested with at least one drill hole, and on that basis, 49 of the original discoveries are diamond-bearing, and 34 have yielded microdiamonds larger than 1 mm in at least one dimension.
The Saskatchewan diamond play dates back to 1988, when Monopros, a De Beers affiliate, unearthed what was later confirmed to be large, rafted kimberlite blocks near Sturgeon Lake, 30 km northwest of Prince Albert. Spurred on by rumours of kimberlite discoveries, a staking rush ensued and close to 800,000 hectares (8,000 sq. km) were snapped up near Prince Albert. Using aeromagnetic maps published by the Geological Survey of Canada, Uranerz Exploration & Mining staked a large land position covering 28 isolated contour highs in the Fort la Corne area. Airborne magnetic surveys would later reveal 88 magnetic targets in the project area, 71 of which exhibited kimberlite-type signatures.
Uranerz partnered with Cameco in 1989 to create the FalC joint venture. A first pass of shallow exploratory rotary drilling hit kimberlite in each of the seven targets drilled that year. An undisclosed number of microdiamonds were recovered from five of the seven kimberlites in drill-chip samples collectively weighing less than 100 kg. The stones were small but generally appeared to be of gem quality. Seven larger diamonds exceeded 1 mm in at least one dimension.
Drilling in 1989 sampled only the upper few tens of metres of seven kimberlite bodies. More intensive drilling, beginning in 1990, revealed that many of the kimberlite bodies were limited to a thickness of 100 metres.
Earn-in
De Beers joined the FalC joint venture in 1992 under a 3-year earn-in agreement. The joint venture was again amended in 1995 to include Kensington, which earned an initial 25% participating interest by spending $3.4 million over three years. The current ownership has resulted from dilution clauses in the joint-venture agreement. De Beers assumed operatorship of the project at the end of 1998. The FalC joint-venture partners have spent more than $30 million to date.
The Fort la Corne kimberlites were emplaced into a Phanerozoic sedimentary sequence of shale and sandstones along the northeastern margin of a broad sedimentary basin 112-90 million years ago. The kimberlite bodies occur as laterally extensive, lensoidal or pancake-shaped horizons of well-preserved, crater facies pyroclastic kimberlite. They were partially erupted and then capped by re-sedimented kimberlite, and range from single-eruptive bodies to large, multi-eruptive events consisting of a series of stacked, sub-horizontal kimberlite beds interstratified with Lower Cretaceous marine, marginal marine, and continental sediments. Many of the kimberlites appear to have formed in a 2-stage process involving initial excavation of a relatively shallow and wide crater followed by infilling of both primary pyroclastic kimberlite and slumping of kimb
erlitic material from the margins of the crater.
The Fort la Corne kimberlites are classified as Group 1 kimberlites, based on a composition including two generations of olivine (phenocrysts and macrocrysts) and a ground mass of monticellite, spinel, perovskite, mica, primary serpentine and carbonate. Textually, these rocks are classified as pyroclastic kimberlites. Reworked kimberlite sediments are usually found in the upper few tens of metres but can occur occasionally throughout the sequence.
The kimberlite bodies are dominated by olivine crystal tuffs and juvenile lapilli of variable composition, with rare-to-common country rock and mantle xenoliths, minor fine-grained interclast matrix, and rare amounts of garnet, ilmenite and chromite.
The kimberlites tend to have broad, champagne-glass forms. Limited drilling has revealed that many of the kimberlite bodies are about 100 metres thick, with an irregular peripheral apron narrowing to 30 metres thick.
Feeder systems
The roots, or feeder systems, of these large kimberlite bodies were only identified quite recently. In early 2001, delineation core drilling by Shore Gold on the Star kimberlite returned a 539-metre-long intercept of kimberlite in hole 20, before shutting down while still in kimberlite at a depth of 627 metres. Shore’s hole 20 provided the first real evidence of an underlying root system to the Fort la Corne kimberlites. The hole displayed uniform diatreme kimberlite lithologies from a depth of 279 metres downward, with abundant mantle-derived xenoliths, pyrope and eclogitic garnets.
A 625-kg sample taken from the upper 312 metres of hole 20 returned 171 microdiamonds. The two largest stones measured 1.49 by 1.41 by 1.29 mm and 1.52 by 1.25 by 1.15 mm.
Shore acquired the 98-sq.-km Star project by staking in 1995. In the fall of 1996, Shore encountered multiple kimberlite horizons while drilling three widely spaced holes into the higher magnetic portions of a large, complex magnetic anomaly measuring 2 by 1.7 km. Shore has since completed 37 widely spaced core holes from surface into the Star kimberlite, which sits against the FalC property boundary. A July 2003 technical report by ACA Howe International concludes that “the Star kimberlite is a major, laterally continuous zone with a surface area of crater facies in excess of 1.5 sq. km.” Shore believes it is looking at about 300 million tonnes in geological resource for the Star body.
The surface topography of the kimberlite body interpreted from drilling shows an elevated cone/crater-like shape around the eruptive centre. The Star kimberlite was one of several Fort la Corne kimberlites selected by the government-sponsored Targeted Geoscience Initiative program for analysis, owing to its emplacement history. All available drill core was re-logged and lithologically analyzed. Geochemical investigations, including uranium-lead age-dating of perovskite fractions and whole-rock geochemistry, have been used to reconstruct and refine the eruptive history of Star.
These results, along with high-resolution, two- and three-dimensional shallow seismic surveys, aided by borehole geophysics, confirm that the Star body is an eruptive complex with at least four phases of kimberlite and two or more possible feeder vents.
The initial kimberlite volcanism resulted in the formation of a pipe-shaped feeder vent and overlying maar complex. Subsequent eruptions, dominated by sub-aerial deposits, formed a positive relief cone over the top of the feeder vent/maar. The shape of this tephra cone was modified during marine transgression, resulting in re-worked kimberlite sand along the fringes, and kimberlite event deposits, such as turbidites and debris flows, in more distal settings.
In the fall of 2001, Shore drilled a single, large-diameter (24-inch) reverse-circulation (RC) hole into the Star kimberlite, 50 metres southeast of hole 20, to test the potential for commercial-size stones. On the neighbouring FalC joint venture, a 3.3-carat gem quality diamond had been recovered from a 2001 large-diameter drill hole on the 140/141 kimberlite, 3 km north-northwest of Star. De Beers valued this stone at US$390 per carat. A 10.2-carat diamond was later taken from the 140/141 kimberlite during bulk-sample drilling in 2002.
Shore’s RC hole intersected 192 metres of kimberlite to a depth of 296 metres, before stopping as a result of mechanical failure. From the 82.7 tonnes of extracted kimberlite chips, 183 diamonds larger than 1.1-mm sq. mesh sieve were recovered; their total weight was 8.52 carats. The two largest stones recovered were fragments weighing 0.64 and 0.4 carat.
The mini-bulk sample was marred by a recovery of only 59%, based on hole-diameter and expected rock-chip returns. Granulometry studies on the chips concluded that there had been over-grinding of the kimberlite, resulting in chips that were smaller than anticipated. The kimberlite in the top 200-metre portion of the hole was found to be much less competent than that below this level, generating a much finer rock-chip sample. All material smaller than 1.2 mm was lost in the fines. Using the theoretical 140 tonnes that should have been recovered, the mini-bulk drill sample showed a diamond content of 6.1 carats per 100 tonnes.
Overall, the results of the mini-bulk sample showed a fairly even distribution of larger diamonds throughout the hole. An increase in stone density with depth, especially for microdiamonds, was thought to be a condition of rock competency and sample recovery. Two zones in the hole, at 175-190 metres and 258-295 metres, showed significantly higher microdiamond counts in more competent kimberlite units.
After hiring AMEC E&C Services to examine the diamond distribution across the Star kimberlite, based on drill results, Shore elected to go underground to recover at least 3,000 carats for evaluation purposes and grade modeling. It involved sinking a 4.5-metre-diameter shaft into the throat of the Star eruptive centre to a targeted depth of 250 metres below surface in order to collect a bulk sample of about 25,000 tonnes. The vertical shaft was collared less than 100 metres east of the FalC property boundary in 2003.
Drifting
The shaft passed through the glacial cover and into the Cretaceous sediments at a depth of 89 metres and reached the sediment-kimberlite interface at 107 metres. A little more than 7,600 tonnes were extracted during the sinking of the shaft. The remainder was mined from drifting on the 235-metre level in what is defined as the Early Joli Fou (see table on page 15) equivalent kimberlite. Shore drifted laterally out in northeasterly and southwesterly directions, guided by the results of surface and underground drilling. “It’s a network of passages down there, with more than 1 km of tunnels,” explains George Read. Off the southeastern lane, there are half a dozen different drifts, some having multiple headings. The drifting is confined to an area measuring 175 metres north-south and 150 metres east-west. The lateral development at this level is constrained by the kimberlite-country rock boundary, which is perhaps more than 100 metres out from the shaft.
The shaft cut through two main eruptive phases that are believed to be equivalent with stratigraphically defined horizons in the Saskatchewan sedimentary basin, namely the Early and Late Joli Fou formations of the Lower Colorado Group. The upper part of the shaft, from 107 to 171 metres, is in the Late Joli Fou stratigraphic-equivalent kimberlite phase. The lower part of the shaft, from 190 to 250 metres, is in the equivalent of the Early Joli Fou. Based on the bulk sample results, there is a distinct grade difference between the Early and Late Joli Fou equivalent kimberlite, with better grades evident in the deeper Early Joli Fou phase. However, large-carat stones have been found in both horizons.
Diamond recoveries to date total 3,092.25 carats exceeding a 0.85-mm cutoff from the processing of 21,995 tonnes of kimberlite, for an overall average diamond content of 14.06 carats per 100 tonnes. More than 98% of the overall parcel’s carat weight consists of 2
3,847 diamonds of commercial-size greater than 1.18-mm square mesh. Batch samples from the deeper Early Joli Fou kimberlite alone have delivered 2,898 carats of diamonds from the processing of 17,440 tonnes, for an implied diamond content of 16.61 carats per tonne. Shore estimates the Early Joli phase accounts for as much as 80% of the overall mass of the Star kimberlite.
There is a degree of variability in grade that ranges from 9.19 to 33.05 carats per 100 tonnes, batch by batch. “It’s a fairly complicated place down there,” says Read. “It’s not just one big blob of kimberlite, there are variations. It was an active volcano, and things went up and down and sideways. There are probably areas where kimberlite has been subjected to some sort of sub-aerial weathering and then slumped back in, so there is a variety of kimberlite on the 235 level.”
Comparable grade
The implied sample grade is comparable to that of the neighbouring kimberlites of the FalC joint venture, where higher-grade sections of the more promising 140/141, 148 and 122 FalC bodies are modeled to contain anywhere from 29 to 156 million tonnes of kimberlite at predicted grades ranging from 7 to 16 carats per 100 tonnes. Together, these units of “higher interest” in the FalC bodies contain an estimated 369 million tonnes at an average modeled grade of 10 carats per 100 tonnes, using a bottom stone cutoff of 1.5 mm.
Shore has recovered a significant number of large-size diamonds, the biggest being a 19.7-carat, white-coloured aggregate from the 235-metre level in the Early Joli Fou. The next dozen largest stones, all recovered from the Early Joli Fou horizon, weigh in at 19.68 carats (off-white), 14.6 carats (white), 12.84 carats (off-white), 11.57 carats (grey), 10.14 carats (white), 8.33 carats (grey), 8.08 carats (off-white), 8.07 carats (off-white), 7.85 carats (off-white), 7.7 carats (white), 7.68 carats (white), and 7.48 carats (white).
The 19.68-carat is actually a fragment that broke off of an even larger-size diamond. The bigger stones also include a white-coloured, 4.77-carat octahedron and a 5.4-carat, slightly yellow octahedron, both of which are internally flawless. “They are high-value stones,” confirms Read.
The largest diamond recovered from the shallower Late Joli Fou phase is grey-coloured and weighs 5.76 carat.
In total, 152 of the recovered diamonds weigh more than 2 carats each, and 411 diamonds are greater than 1 carat. Of these, 241 are described as white, 84 are off-white, 50 are grey, 24 are brown, 10 are yellow, and two are amber. Nine-hundred and fifty-five of the stones weigh more than half a carat. A small number of coloured stones, representing 1.5% of the overall parcel, have been recovered, including pinks, yellows, ambers and greens. The largest pink-coloured diamond weighed 0.72 of a carat.
Read believes a value of US$125 per carat is not unreasonable, based on the abundance of large stones and the general quality of the diamonds. “The diamonds are good-looking and there is not a lot of boart present,” he says. “There are some nice octahedrons throughout the size range, which are the best shape for cutting.”
Shore is waiting for results from sample batches 56A through 65, representing some 4,000 tonnes of kimberlite from the 235-metre level. These samples have been processed and shipped to SGS Lakefield Research for final diamond recovery. Read guesses there may be about 1,000 tonnes of kimberlite remaining to be processed.
Seven drill stations have been established at the ends of the drifts on the 235-metre level. These will eventually be used to delineate the shape of the Star kimberlite pipe. Shore is preparing to begin a desktop engineering scoping study, based on a positive valuation.
In the meantime, it’s do or die for the FalC joint venture. De Beers’ current approach, fully supported by Kensington, is to move the project toward a decision regarding prefeasibility. The partners are spending $7.6 million on a drilling program designed to evaluate higher-grade units in neighbouring priority kimberlites. The kimberlites will then be considered in combination as a single resource. This approach has the advantage of increasing the size of the potential resource.
“This is the largest program to date and we hope to obtain enough diamonds from two of the more interesting bodies [140/141 and 122] so that we can get a first estimate of the diamond values,” said Andrew Williams, Fort la Corne’s project manager, during a recent media presentation. “This will be important in determining which kimberlites are worth taking forward.”
In the autumn, 32 broadly spaced core holes were drilled on kimberlite bodies 140/141, 122, 120, 147, 121 and 221 to provide information and samples for the identification of higher-grade zones, and to permit higher-confidence grade forecasts. The program was expanded to include up to 10 large-diameter RC holes positioned in higher-grade zones in kimberlites 140/141 and 122.
The FalC land position contains 25 kimberlite bodies within a 5-km radius in the southern portion of the claims. The partners intend to explore and evaluate kimberlites larger than 20 hectares in this concentrated area, the goal being to outline a resource of close to 100 million carats.
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