If these guys have diamonds, so is CMKX - same location.Kensington counts Fort a la Corne diamonds
2004-05-27 14:14 ET - Street Wire
by Will Purcell
Kensington Resources has some new diamond counts from another of its old kimberlite pipes in the Fort a la Corne district of Saskatchewan. The latest numbers bring new hope for the mammoth No. 122 pipe, which was last mini-bulk tested in 2000. The results of that program lagged behind the diamond recoveries at the nearby No. 141 kimberlite, and the focus seemed to shift away from No. 122 as a result. With the latest microdiamond recoveries, there could be renewed interest in the kimberlite body, as there are signs of higher-grade sections within the huge and complex pipe.
De Beers Canada, Kensington's main joint venture partner on the play, processed nearly 413 kilograms of kimberlite taken from 11 holes drilled last year, and the rock produced 327 diamonds larger than a 0.075-millimetre sieve. That amounted to just under 800 stones per tonne, which was significantly greater than the diamond hauls of previous years.
Like its sister kimberlites, there appeared to be a portion of the pipe that had a better diamond content. The main pyroclastic kimberlite zone accounted for about 340 kilograms of the latest sample, and the rock produced 278 of the diamonds, or about 815 stones per tonne.
That was just marginally higher than what the remaining samples had produced, but the main zone seemed to have a more favourable diamond size distribution. About 12 per cent of the diamonds that had been recovered by the 0.106-millimetre screen had also been retained by a 0.30-millimetre mesh, and nearly 7 per cent of them had been large enough to cling to a 0.425-millimetre sieve.
Those proportions are no match for some of the kimberlites in Canada's North, where over one-quarter of the diamonds were retained by a 0.30-millimetre sieve and more than one-eighth of the diamonds that were larger than a 0.106-millimetre screen had also remained on a 0.425-millimetre mesh. Nevertheless, the latest recoveries from No. 122 indicate the most favourable diamond size distribution of the three pipes tested last year.
For instance, De Beers and Kensington recently recovered 1,159 diamonds from nearly 600 kilograms of kimberlite drilled from the No. 141/140 complex, and that worked out to nearly 2,000 stones per tonne, or quadruple the rate at the main pyroclastic zone of No. 122.
Nevertheless, the size distribution of the No. 141/140 samples was no match for the main zone at No. 122. Only 4.0 per cent of the diamonds larger than a 0.106-millimetre screen had remained on a 0.30-millimetre mesh, and the proportion of diamonds larger than a 0.425-millimetre sieve was barely over 1 per cent.
As a result, the diamond counts at No. 122 steadily gained on No. 141/140 through the larger sieve classes. For instance, both samples contained 22 diamonds larger than a 0.30-millimetre screen, and there were five diamonds in the smaller batch of kimberlite from No. 122, compared with just four in the No. 141/140 samples.
That offers hope that the grade of No. 122 could be of economic interest, although the Fort a la Corne partners seemed to lose interest in the pipe after a mini-bulk test in 2000. Three large reverse circulation holes were drilled in that program and 328 tonnes of kimberlite were extracted. The rock produced 17.31 carats of diamonds, which indicated a sample grade of about 0.053 carat per tonne.
That was significantly lower than the 0.084-carat-per-tonne grade that a 252-tonne test at No. 141 had produced, and the focus of De Beers shifted toward that body, along with another priority pipe, No. 150, when a larger mini-bulk test was completed the following year. The No. 141/140 complex remains a top priority for the partners, but the latest result also offers renewed hope for No. 122.
The three big holes that made up the 2000 program were drilled into the central part of the No. 122 complex, in what is now described as the south crater. Each hole produced something between 80 tonnes and 130 tonnes of kimberlite, and the diamond grades varied from just 0.033 carat per tonne, to a much more intriguing 0.097 carat per tonne.
The Fort a la Corne partners have been drilling holes into No. 122 since 1989, but most of them tested the southern crater of the huge body. Until the latest program, only one of the holes had been drilled into the northern crater and there are too many unknowns to allow for much of a comparison with the earlier results from the southern holes.
That is not the case with the latest samples. De Beers and Kensington processed about 118 kilograms of kimberlite from the main zone in the northern crater of No. 122, and the rock produced 115 diamonds, or nearly 1,000 stones per tonne. There were 223 kilograms extracted from the same phase in the southern crater and the material delivered 163 diamonds, or a bit less than 750 stones per tonne.
Meanwhile, there seemed to be little difference in the diamond size distribution within those two samples. Roughly 12 per cent of the diamonds larger than a 0.106-millimetre cut-off that had come from the main pyroclastic phase of both craters had also been large enough to be retained by a 0.30-millimetre sieve. As well, the proportion of diamonds larger than a 0.425-millimetre screen was also quite similar.
As a result of the greater numbers and similar size distributions, the latest diamond counts offer hope that the diamond content within the relatively untested north crater might be significantly higher than what was found in the south crater. As well, the seemingly better results from the main pyroclastic phase offers encouragement that the zone has a higher grade than the remainder of the mammoth complex.
Furthermore, there were signs that De Beers and Kensington may have been a bit unlucky with their one big crack at No. 122 in 2000. The sample produced just six diamonds that weighed in excess of one-half carat, while the marginally smaller sample from No. 141 that year had produced eight such stones, including two that weighed in excess of one carat.
That may have helped sway the partners toward No. 141, but there were still clear signs that No. 122 had a favourable diamond size distribution. There were 212 diamonds in the No. 122 parcel, and that worked out to an average stone size of about 0.082 carat, while the average diamond size at No. 141 was actually smaller, at 0.077 carat, based on the 275-stone parcel. The fact that the No. 122 sample was able to overcome the contribution of the larger diamonds at No. 141 suggests that the more modest number of large diamonds may well have been just a bout of statistical bad luck.
Going into the 2000 program, De Beers had come up with a modelled grade of about 0.16 carat per tonne for the No. 122 pipe, compared with a value that ranged between 0.05 carat per tonne and 0.19 carat per tonne for No. 141. As a result of the mini-bulk samples, the partners confirmed a value of 0.18 carat per tonne for No. 141, while the hopes for No. 122 were downgraded to a range between 0.075 carat per tonne and 0.12 carat per tonne.
De Beers and Kensington still have diamond counts from one last pipe to come, and the No. 150 body might also have a few pleasant surprises in store. After the 2000 tests, the partners swapped the pipe for No. 122, but the body delivered mini-bulk results that were less than what No. 141/140 had coughed up, and it seemed to be slipping on the priority list as well. Nevertheless, if the new numbers show signs of a coarser size distribution and a higher-grade zone, the body could get another good look.
The new diamond counts from the busy 2003 core drilling program may result in an updated forecast of the diamond grades within the four priority pipes, and the numbers will certainly allow De Beers and its partners to focus its exploration strategy for the coming year. With their main rival, Shore Gold, completing a 25,000-tonne test of the nearby Star kimberlite, the exploration plans for the Fort a la Corne partners will be eagerly awaited by speculators.
That exploration program could also include drilling for new pipes. The partners have completed a geophysical survey over their property, with an emphasis on hunting anomalies without a clear magnetic signature. A number of electromagnetic targets with little or no magnetic indication have resulted in some rich diamond finds in other parts of the country, and De Beers and Kensington have come up with a few targets that seem worthy of drilling.
Meanwhile, Kensington now has a new president in Robert McCallum, who has remained quite active since he retired as president of Philex Mining and Philex Gold in the late 1990s. Mr. McCallum subsequently went on to become a director of Miramar Mining, where he served until the company merged with Hope Bay Gold in 2002.
A mining engineer by trade, Mr. McCallum has had a varied career over the past several decades, and his new job with Kensington marks a return to diamonds. A Canadian resident since the late 1970s, Mr. McCallum was born in Kimberley, South Africa, so it was no big shock that De Beers and diamonds played a big role in the early days of his career.
In the 1970s, Mr. McCallum moved on to pursue gold and metals, first in South Africa and later in Yukon. He then tried his hand at potash in Saskatchewan before going back to gold in the latter half of the 1990s.
Mr. McCallum has been busy on the business and financial sides of things through much of his career, and that experience will come in handy with Kensington, as the company will need increasing amounts of cash to keep paying its way on the Fort a la Corne play.
Kensington dropped one cent on Wednesday, closing at 83 cents. http://new.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=B-350099-C:KRT&symbol=KRT&news_region=C&name=Kensington+Resources+Ltd&title=Kensington%20counts%20Fort%20a%20la%20Corn e%20diamonds
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