The wait is over. Everything is now in place to hit the jackpot – by discovering billions of dollars worth of diamonds in one of the world‘s most attractive diamond exploration regions: Finland. Today, Arctic Star Exploration Corp. (TSX.V: ADD; US: ASDZF; Frankfurt: 82A1) announced the start of an eagerly-awaited exploration program at its 100% owned Timantti Project in Finland.
Last week, the company closed its agreement to acquire an 100% interest in this promising project. It took the company more than one year to do so. Following last week‘s announcement, the company‘s stock jumped +41% on 3.7 million shares – never before did the company trade so many shares on a single day. Obviously, investors have high hopes for this European project, but waited for the official closing.
This is not only an early-stage exploration play, but also a well-advanced development project with 2 diamond-bearing kimberlite pipes (called the Black Wolf and White Wolf) already discovered on the district-scale property. More diamondiferous pipes are highly probable on Arctic´s property and are just waiting to get discovered.
With exploration – especially geophysics and drilling – to start now (according to today‘s news), investors could very well fall in love with this sexy diamond play today as it‘s widely known that it´s all about drilling. Betting on a drill success is what provides the rare opportunity to the extreme high rewards that the diamond exploration space is known for. No other commodity sector creates riches as fast as the diamond sector. Discovering diamonds with the drill bit is like hitting the jackpot on a slot machine, however the good news is that it‘s already confirmed that there are diamonds on this property. This is what makes this project so attractive. And a major "discovery" worth billions of dollars could just be around the corner.
In Good Company: 4 High-Carat Personalities Are Also Betting On A Success
Most recently on Tuesday, Arctic announced major management changes. Scott Eldridge has become President & CEO. He was a Co-Founder of Euroscandic International Group Inc., a private investment banking and consulting company with a tag line that says it all: “Natural Resource Finance“. Eldridge served as President and CEO between 2008-2016, during which time he has been responsible for raising in excess of $500 million CAD in combined equity and debt financing for mining projects around the globe, varying from exploration to mine construction financing. He was involved in transactions with the following companies:
First Majestic Silver Corp. ($1.4 billion market cap.), Silvercrest Mines Inc. ($154 million takeover by First Majestic), Integra Gold Corp. ($590 million takeover by Eldorado Gold), Probe Mines Ltd.($440 million takeover by Goldcorp), Endeavour Silver Corp. ($340 million market cap.), Excelsior Mining Corp. ($191 million market cap.), Newstrike Capital Inc. ($140 million takeover by Timmins Gold), Pediment Gold Corp. ($137 million takeover by Argonaut Gold), Esperanza Resources Corp. ($69 million takeover by Alamos Gold).
What better President & CEO for Arctic can you wish for when considering that Eldridge had this stunning success in the past? As most of the above transactions led to takeovers and mergers with major mining companies, one can certainly say that he has an instinct for exploration projects to eventually become mines. However he also deserves much respect for picking so many winners not in gold´s last bull market but during the last bear market: All of the above transactions happened after 2010. Rockstone asked Eldridge for a statement on why he believes the Timantti Project is so attractive. His answer cuts right to the chase and gives me confidence of being a shareholder:
“I am thrilled to be a part of Arctic‘s executive team as we are on the brink of our initial exploration program on our 100% owned Timantti Diamond Project in Finland that will include drilling. Timantti represents a feverish opportunity for shareholders to gain exposure to one of the last known district-scale diamond fields, that coincidentally lies within proximity to excellent infrastructure and has year-round access. These operational benefits of the district will enhance Timantti‘s economics should Arctic discover an ore-body. Finland consistently ranks high on the Fraser Institute‘s international rating survey. Having been involved with mining projects in Northern Europe in the past, to me Finland is the Nevada or Quebec of Europe as a premier mining jurisdiction with significant local support programs. Our world-class exploration team has discovered multiple diamond mines in the past. The stars appear to be aligning in Finland.“
In July 2017, when Arctic announced its plans to acquire the Timantti Project in Finland, Roy Spencer joined the company as a Director. He was largely responsible for discovering the Black Wolf and White Wolf diamond pipes, which now belong to Artic. Spencer was also largely responsible for discovering the multi-billion-dollar Grib diamond pipes in Russia, some 450 km east from the Wolf pipes in Finland. Both the Wolf and Grib diamond pipes are “connected“ to eachother as both occur on the same Karelian Craton (very old areas of the earth´s crust which are the world´s dominant source of diamonds). In July, Roy Spencer commented:
”Kimberlites are likely to occur in fields – also known as clusters – which typically contain 30 or more separate kimberlites. The Wolf kimberlites are just the first discoveries in a more extensive cluster. There is good evidence for the existence of this field in the public domain. This data shows regional distribution of kimberlitic indicator minerals and diamonds in surficial tills. The Exploration Reservation will allow Arctic Star to explore the entire region.“
Spencer is certain that more diamond pipes can and will be found on Arctic´s Timantti Property in Finland.
Buddy Doyle is also a legendary diamond mine discoverer. He was largely responsible for discovering the multi-billion-dollar Diavik diamond pipe in Canada. The 2 diamond gurus, Roy and Buddy, have collaborated previously on bringing into production the Liqhobong Diamond Mine in Lesotho, South Africa. As arguably 2 of the most accomplished diamond explorers in the world are now uniting to work on another diamond project together, this certainly grabs our attention and you should follow closely what they are up to now. This could turn out big. Arctic´s Executive Chairman, Pat Power, said the following in an interview in late July 2017:
”It was about 2006 when Buddy Doyle looked at this project we just took into the company. We made an offer for a percentage of it. But they wanted 12.5 million Euros for 25% of it, which we didn´t have the ability to do back then. Then 2008 came and everything became really difficult for all resource companies, specifically for diamond companies. It became very, very difficult. Roy Spencer, who you could call the father of the Timantti Project, found the “Grib” pipe, 450 km east in Russia as the president of Archangel Diamond Corp. in 1996. That turned out to be a mine, which started producing about 2 years ago. But as usual in Russia, he got kicked out before it became productive. He traced chemistry trails to the Finnish border and all those trails originated in Finland somewhere.“
On Tuesday, Arctic also announced the appointment of Jared Lazerson as a Director. Pat Power had the following to say:
”We are excited with the addition of Jared Lazerson to Arctic’s Board of Directors, his market, technology and industrial mineral mining experience are a welcome addition to the Board. The momentum he has created with the recent development of MGX Minerals is particularly relevant as we advance Arctic’s newest diamond exploration property.”
Lazerson is also the CEO of MGX Minerals Inc., a company he grew from $2 million to a current market capitalization of around $100 million, and a 2017 high in excess of $200 million. In February 2017, Lazerson also joined the Advisory Board of Far Resources Ltd., whereafter the company appreciated strongly from about $0.10 to currently $0.50. Shareholders of Arctic now hope for a similar performance.
Another Grib Diamond Mine in Finland?
Full version / After Lukoil reported nearly $340 million USD in revenue from sales of around 4.5 million carats of rough diamonds from its Grib Mine in Russia in 2016, the mine was sold for $1.45 billion USD to Russia‘s largest privately-owned financial company. (Photo source)
Read the full report with more details on the Timantti Project in Finland and the Grib Diamond Mine in Russia here.
Is Arctic Star zeroing-in on diamond riches in Finland?
By Marc Davis
There are tantalizing clues as to the possible whereabouts of billions of dollars worth of buried diamonds in the rough.
Since their discovery a few years ago, these geological clues have become known as the Black Wolf and the White Wolf.
Located in northern Finland, they consist of twin diamond-embedded rock formations — scientifically referred to as kimberlite pipes. And they have kept their secret for many millions of years.
Now the wait is finally over. For the first time ever, their geological DNA is being closely scrutinized in the hopes that it will point the way to a considerably more richly endowed nearby diamond deposit.
Initially discovered in 2005 by a small mineral exploration start-up called European Diamonds plc, the White Wolf and Black Wolf pipes are the first to emerge in a region that no doubt hosts more diamond-laced discoveries.
More on this in a moment.
A decade ago, the economic potential of these twin pipes was probed by way of some small-scale drilling. But the distribution of the micro diamonds among the rock samples taken proved to be too inconsistent to justify additional drill testing. So the project was abandoned and has since languished — until now.
Veteran diamond exploration company Arctic Star Exploration Corp. (TSX.V: ADD) has come to Finland to test a scintillating theory: the two Wolf kimberlites can point the way to a glittering treasure trove at the heart of one of the world’s last under-explored diamond fields.
To this end, the company has acquired the White Wolf and Black Wolf diamond pipes and the geologically-prospective exploration grounds that surround them. This sizeable property can be found in the under-explored region of Kuusamo.
Known as the Foriet Property [now called Timantti Project], Arctic Star’s exploration permits will now be the hunting grounds for a whole cluster of kimberlite pipes — any one of which could be the mother lode.
By studying all the geological characteristics of the initial White Wolf and Black Wolf discoveries, Arctic Star’s geologists believe they can zero-in on a swarm of proximal pipes. After all, this is the methodology that has proven phenomenally successful in Canada’s Northwest Territories (NWT).
It’s an exploration approach that also helped unearth several large, prolifically-mineralized Russian diamond mines that are located less than 500 kilometres to the east of the Foriet Property. Interestingly, these mines were only found relatively recently.
Can History Repeat Itself?
When another small diamond exploration company called Dia Met Minerals discovered the Point Lake diamond pipe in the NWT in 1991, there was considerable fanfare.
The stock rallied from mere pennies to over $67 the following year. By then, a small handful of far richer diamond pipes had been located nearby. They later became the multi-billion-dollar Ekati diamond mine — the first of its kind in Canada.
In fact, it turned out that Point Lake was worthless because it contains too few diamonds to be mined. But that didn’t matter.
What did matter is that the Point Lake discovery was a technical success that led geologists to eight proximal kimberlite pipes — all of which proved to be rich with diamonds.
Since the commercialization of Canada’s inaugural diamond mine, another nearby mine called Diavik has also come into existence. Together, they have yielded over $25 billion worth of diamonds so far.
Fortunately for Arctic Star, its Vice President of Exploration is Buddy Doyle, who was integral to turning Diavik into a world-class mine in the 90s. This is when he was exploration manager for Kennecott Canada Exploration Inc. — a subsidiary of the world’s biggest mining company, Rio Tinto plc.
Now he hopes to do it again. Only this time around, he also has the benefit of vastly improved diamond-hunting technology and a wealth of geological savoir faire. In recent years, he has traversed much of the frigid vastness of the NWT looking to replicate his earlier success at Diavik.
His search has now brought him and Arctic Star to Finland where he is applying the same diamond sleuthing expertise to one of the world’s last diamond-hunting frontiers.
Why the Wolf Pipes are Key to Revealing New Diamond Fields
Fortunately, there’s plenty of scientific encouragement for Arctic Star’s quest. For instance, the Foriet Property is close to the Russian border and is part of the same tectonic plate that already hosts several Russian diamond mines.
Known as the Karelian Craton, this crustal feature is geologically comparable to the Slave Craton in Canada’s Arctic, which is home to the Ekati and Diavik diamond mines. In other words, it’s proven to be geologically fertile for economic diamond discoveries.
Here’s how kimberlite pipes are found in both the Karelian and the Slave cratons: They are tracked down by following trails of indicator minerals. Many millennia ago, these tiny, colourful stones were eroded from kimberlites by glaciers and then deposited down ice.
The thicker the dispersion train, the closer the indicator minerals are to their diamondiferous bedrock source. In other words, finding diamondiferous pipes this way is analogous to following a trail of crumbs to a loaf of bread.
The Black Wolf and White Wolf pipes were discovered by this very same process.
Again, it’s worth mentioning that this is how the kimberlite pipes that constitute the Ekati and Diavik diamond mines were found.
Indicator mineral trails that are comparable to the one that leads to the White Wolf and Black Wolf pipes can also be found elsewhere on Arctic Star’s property. This supports the theory that other proximal kimberlite pipes are still waiting to be discovered.
In fact, diamond fields usually involve 10-30 kimberlites but can in some cases include as many as 100 or more. A cluster of pipes usually resembles a shotgun blast spread out over an area in diameter of up to 100 kilometres in diameter.
To this point, Finnish federal government geological data shows the presence of an 80-kilometre-wide “cloud” of indicator minerals dispersed across a wide area that is roughly centred on the Wolf pipes. This suggests that Arctic Star property encompasses a whole new cluster of kimberlites.
Additionally, the company’s till sampling program utilizes the same sampling and mineral ranking techniques that were used to find the Ekati and Diavik mines. This means that Arctic Star can predict the potential of certain kimberlite targets to host diamonds with a high degree of confidence.
Along with till sampling, Arctic Star’s accomplished diamond-finding geologists also intend to use aerial geophysical surveys and follow-up ground-based geophysics to identify new kimberlite prospects on its new property.
In the near term, Arctic Star is revisiting the economic potential of the Wolf pipes.
To this end, the company is beginning by sampling 14 core holes with a total length of 530 metres of kimberlite at Black Wolf that was drilled over a decade ago and was never assayed for diamonds.
Truth be told, the size potential of the Wolf kimberlites has still to be determined. A ground-based geophysics program will go a long way to solving this mystery. And more drilling still needs to be done to better understand the overall grade of the deposit.
This re-evaluation of the Wolf pipes is made easier due to the fact that these deposits are located near paved roads and in relative close proximity to a power grid, as well as logistical supplies.
Also, there is a skilled labour force nearby in the economically-underdeveloped town of Kuusamo. This pro-mining community also benefits from its own airport and is only an eight-hour drive from Helsinki.
It would therefore be far less expensive to commercialize one or more diamond mines in this region than in a remote, inhospitable location like the NWT.
Arctic Star’s President Patrick Power comments, “We plan to evaluate the economic potential of the Wolf pipes as an immediate priority.
“However, the greatest potential for success at the Foriet Property is the likelihood of finding more diamondiferous kimberlites, any one of which could be richly endowed enough to be economic, and to eventually become a mine.”
In terms of geopolitical risk, the Fraser Institute recently ranked Finland as the most attractive jurisdiction for mining investment anywhere in the world. So this too represents a major de-risking project booster.
The company is also still active in the NWT, where it is involved in a joint venture to explore and develop the T Rex Project for diamondiferous kimberlite pipes.
So the company’s overall risk profile is mitigated by the fact that it has two separate exploration projects underway in two different jurisdictions.
On a technical note, Arctic Star has only about 54.7 million shares outstanding, representing a relatively tight share structure. In the eventuality of positive news flow, such a situation typically acts as a potent catalyst to higher share price valuations.
All told, Arctic Star is gearing-up for a busy exploration season that could yet take investors on the ride of a lifetime.
About the Author: Marc Davis has a deep background in the capital markets spanning 25 years. He is also a longstanding financial journalist, having worked for leading digital financial news agencies in North America and in London’s financial centre. He is also a former business reporter for CBC Television. Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post and AOL. Disclaimer: This online publication is intended for information purposes only. No statement or expression of opinion directly or indirectly, is an offer, solicitation or recommendation to buy or sell any of the securities mentioned. The cost of Marc Davis’ research costs are defrayed by a nominal payment from Arctic Star Exploration Corp. Additionally Marc Davis has been issued stock options by Arctic Star Exploration Corp.
Management & Directors
Arctic Star Exploration Corp.
1111 West Georgia Street
Vancouver, B.C. V6E 4M3, Canada
Phone: +1 604 689 1799
Shares Issued & Outstanding: 73,862,522
Canadian Symbol (TSX.V): ADD
Current Price: $0.18 CAD (11/22/2017)
Market Capitalization: $13 Million CAD
German Symbol / WKN (Frankfurt): 82A1 / A2DFY5
Current Price: €0.111 EUR (11/22/2017)
Market Capitalization: €8 Million EUR
Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist.