Sunrise above Canada‘s newest diamond mine, Gahcho Kué, which means “place of the big rabbits“ in the local Chipewyan language. (Source: De Beers Group of Companies)
Today, Rockstone initiates coverage on Margaret Lake Diamonds Inc., a diamond exploration company active with 2 highly prospective projects in the Northwest Territories of Canada.
With a current market capitalization of $4 million CAD, the company‘s Margaret Lake Property is a compelling area play just 9 km north of Canada‘s newest diamond mine, Gahcho Kué, a joint venture between the discoverer, Mountain Province Diamonds Inc. (market cap.: $530 million CAD), and the 51% controlling operator De Beers Canada.
It‘s the world‘s largest new diamond mine constructed since 2003, starting in September 2016. In its first 10 months, the mine recovered >5 million carats of diamonds (forecasted to produce an average of 4.5 million carats annually or an estimated 53 million carats during its 12 years mine life). De Beers Canada reported a higher than expected recovered diamond grade of 2.07 carats per tonne and its CEO Kim Truter said:
“We have built 3 mines in the last 10 years in Canada, giving us the most experience regarding recruiting, planning, construction and project execution of any mining company in the country over the last decade, positioning us very well for continued future growth as opportunities emerge.“
The Opportunity: As kimberlite pipes typically occur in clusters, more diamondiferous pipes in proximity to Gahcho Kué are set to be found with modern exploration methods, whereas Wikipedia even knows that “there are also several unexplored kimberlite occurrences scattered over several kilometres“ around Gahcho Kué. This makes the properties in proximity to Gahcho Kué some of the world‘s most attractive diamond exploration plays of modern times (limited CAPEX due to nearby processing plants and existing infrastructure), providing shareholders with the opportunity to make riches when another diamondiferous pipe with economic grades can be found. Naturally, it‘s not a question of if another diamond pipe can be found but when.
As Margaret owns one of the most attractive properties in the area, and today announced its exploration plans for 2018, the time is right to look at Margaret and closely follow its activities.
Today, Margaret Lake Diamonds Inc. provided exploration updates and plans for its 2 projects, Margaret Lake and Diagras, both located in Canada‘s Northwest Territories.
Margaret Lake Project
Ready to Drill: The company today reported to have generated 3 high-priority drill-ready targets from the ground geophysical program undertaken in 2017 as well as 1 target from previous ground work on the Margaret Lake Property.
Preparations are now underway to plan a drill program. The company has already obtained regulatory approval to proceed with a drill program.
Success with Geophysics: In the spring of 2017, the company completed a series of ground gravity and OhmMapper™ (ground electromagnetics) surveys over 9 targets previously generated from a HeliFalcon™ airborne gravity gradiometer survey. Physical bathymetric surveys complemented the ground gravity surveys to allow for consideration of water column in data processing.
3 of the identified anomalies display a gravity low, bedrock conductor, or a combination of both, while a fourth anomaly has been identified from historic ground work, which also displays coincident gravity and electromagnetic responses. These anomalies exhibit characteristics interpreted as having the potential to represent diamondiferous kimberlite bodies.
The Margaret Lake Property comprises 23 mineral claims totaling 23,199 hectares contiguous to the north and west of the Kelvin and Faraday Diamond Projects from KDI (Kennady Diamonds Inc.; market cap.: $159 million CAD). Kennady was successful in using similar ground gravity and OhmMapper™ surveys to reveal extensions to these kimberlites not displayed in magnetic surveys.
Maximum Ownership & Top Location: Margaret Lake Diamonds Inc. holds a 100% interest in Margaret Lake and the property is not subject to any underlying royalties. It is located 300 km east-northeast of Yellowknife in the district of Mackenzie, Northwest Territories and just 9 km north of Canada’s newest diamond mine, Gahcho Kué, a De Beers/Mountain Province Diamonds joint venture.
Full version / The Gahcho Kué Mine is located in Canada, the politically most stable diamond producing country in the world and the third largest diamond producer by value and the fifth largest by volume. The development of Gahcho Kué between 2006 and 2015 has already provided a $440 million CAD boost to the NWT economy, with 1200 jobs supported annually.
The Diagras Property is comprised of 23 claims totaling 18,699 hectares located in the prolific Lac de Gras diamond field, just 22 km from the Diavik and Ekati Diamond Mines. Buddy Doyle (Director and Vice President Exploration of Margaret Lake Diamonds Inc.) has over 30 years’ experience in mineral exploration and it was him who managed the Rio Tinto team involved in the discovery of Diavik.
The Diagras Property is host to 13 known kimberlites that were initially discovered in the 1990s by De Beers. Diagras sits along a wide corridor of diamond deposits that include numerous kimberlite pipes currently being mined or developed for future mining, including the A21, A418, A154S, A154N, Lynx, Misery, and Jay Kimberlites. Each of the >1 carat per tonne diamond-bearing kimberlites exist along a 20 km structural trend.
Margaret Lake Diamonds maintains a 60/40 joint venture on Diagras with Artic Star Exploration Corp. (TSX.V: ADD), which company put its exclusive focus on a new diamond project in Finland.
Diagras Exploration Strategy: Joint Venture field crews completed a ground geophysical program at Diagras in the spring of 2017 utilizing ground magnetics (129-line km), ground gravity (23-line km) and ground electromagnetics (22-line km) techniques. The survey program was comprised of 11 separate geophysical surveys to further evaluate areas of known kimberlites as well as evaluate partially defined targets generated from public domain data.
Margaret Lake, as manager of the joint venture in conjunction with Arctic Star, believes there is the potential to apply detailed, modern ground geophysical techniques in anticipation of defining additional kimberlite(s) or kimberlite phases that may not have been evaluated in the past. This approach has been successful elsewhere, such as at the Kennady Lake project (Gahcho Kué) with the additional discoveries of diamondiferous kimberlites at Kelvin and Faraday (“KDI Project“). The joint venture partners believe that this approach has worked, and the ground geophysical surveys completed in spring 2017 were successful. At the Jack Pine kimberlite target all 3 geophysical methods (ground magnetics, EM and gravity) successfully extended the anomalous area beyond the currently known kimberlite footprint in defining additional possible kimberlite phases.
The next phase of evaluation at Diagras would be to expand the ground geophysical program to cover areas proximal to the other known, previously defined kimberlites in order to expand the number of drill ready targets. Margaret Lake Diamonds has received regulatory approval to proceed with a drill program.
Margaret Lake Diamonds Inc.
#2050 - 1055 West Georgia Street
Vancouver, BC, Canada V6E 3P3
Phone: +1 604 630 2810
Shares Issued & Outstanding: 46,317,280
Canadian Symbol (TSX.V): DIA
Current Price: $0,09 CAD (03/09/2018)
Market Capitalization: $4 Million CAD
German Symbol / WKN (Frankfurt): M85 / A2ARXY
Current Price: €0.041 EUR (03/09/2018)
Market Capitalization: €2 Million EUR
Disclaimer: This report contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone cautions investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the Margaret Lake Diamonds Inc.´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the Margaret Lake Diamonds Inc.´s profile on SEDAR at www.sedar.com. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, does NOT hold an equity position or any kind of interest in Margaret Lake Diamonds Inc. however is being paid a monthly retainer from Zimtu Capital Corp., which company holds a long position in Margaret Lake Diamonds Inc.