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| | Tue Jul 17, 2007
Arctic Star and Metalex continue Kyle search
Publisher: Street Wire
Author: Will Purcell
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| | Arctic Star Diamond Corp. and Chuck Fipke's Metalex Ventures Ltd. are still waiting for permission to bulk test their T1 pipe, but exploration drilling in the Kyle Lake region of Northern Ontario is paying off. The companies continue to test geophysical anomalies and one produced a promotable new find. That pipe will get a closer look next year if it lives up to its early promise.
The Kyle plans
Arctic Star's president, Patrick Power, said the partners were processing about 100 kilograms of kimberlite from the new find for microdiamonds. "If it turns out to be something interesting, delineation drilling would take place immediately." The company is hopeful, as the kimberlite core contains arrays of indicator grains and Mr. Fipke is rushing the rock through his lab in Kelowna.
The new Kyle pipe lies between T1 and the Victor pipe, which De Beers Canada Inc. plans to mine in the next few years. The body is closer geographically to T1, but Mr. Power said the kimberlite core geologically resembled Victor. The initial investigation suggests the still unnamed pipe is small, covering about 1.2 hectares at the surface based on geophysics.
Fortunately, the pipe comes surprisingly close to the surface. The discovery hole encountered kimberlite at a depth of just 10 metres, compared with a depth of more than 130 metres at T1. The shallow layer of overburden will allow Metalex and Arctic Star to complete future drill programs at a significantly lower cost than their budgets for T1.
An ample supply of geophysical anomalies prompted Mr. Fipke to grab a series of claims across the Kyle district, about 100 kilometres west of Victor and the rest of the Attawapiskat pipes. Metalex and Arctic Star will continue to drill the targets. The Kyle area contains a large cluster of pipes and Mr. Power thinks additional discoveries are likely.
The Kyle partners are still waiting for permission to resume a mini-bulk test of T1. Work halted last summer, when the Ontario government failed to grant an extension to the required work permits. Arctic Star and Metalex continue to hope for a quick resolution, but the wait drags on. As a result, the hunt for new kimberlites and delineation drilling of new finds will remain the focus.
Arctic Star seemed unenthused about the Kyle hunt until recently, as it chose to dilute its share of the project rather than cough up its 20-per-cent share of the bills. That will no longer be the case, says Mr. Power. The company has about $3-million in its treasury and its portion of the Kyle expenses will be just 8.5 per cent. The costs could nevertheless mount quickly with promotable diamond counts and the expected permits, as Mr. Fipke is a big spender.
The encouragement
Raw diamond counts can be misleading, especially in Northern Ontario. Small samples of rock from the Wawa area produced micros by the thousands, but the grades of the bodies were microscopic. Meanwhile, Victor sat on the shelf for a decade, primarily because of its modest microdiamond tallies. De Beers apparently found micros at a rate of just 100 stones per tonne in its first Victor cores. A comparable rate in the new Kyle pipe would give Arctic star and Metalex just 10 diamonds.
Victor will be Ontario's first mine because of its size and diamond value, not its grade. De Beers thinks the 30 million tonnes of kimberlite averages less than one-quarter of a carat per tonne, but the six million carats in the pipe are worth more than $400 (U.S.) per carat. That leaves the diamond giant with about $2.5-billion (U.S.) worth of gems in the ground.
Arctic Star closed up one-half cent to 20 cents Thursday on 818,000 shares. Metalex added 2.5 cents to 46.5 cents, on 18,000 shares. |
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