Some of Kennady Diamonds Inc.‘s highest value diamonds (+2 carats) were recovered in close proximity to Margaret Lake Diamonds‘ upcoming drill program. (Source)
Today, Margaret Lake Diamonds Inc. announced that it received regulatory approval for a drill program that is set to commence in one of the world‘s most attractive diamond hot spots: Canada‘s Northwest Territories.
More precisely, Margaret‘s drill-ready property is located just 9 km north from Canada‘s newest diamond mine, Gahcho Kué, a joint venture between De Beers Canada Inc. (51%) and Mountain Province Diamonds Inc. (49%; current market cap.: $519 million CAD).
Mountain Province made headlines in January announcing it would acquire its neighbor, Kennady Diamonds Inc. (current market cap.: $166 million CAD), in an all-share offer valued at $176 million CAD. Shareholder meetings for both companies to vote on the transaction to be held next Monday, April 9.
In March, Mountain Province reported to have signed a non-binding agreement with its partner De Beers to incorporate the newly acquired properties into the Gahcho Kué joint venture, in case the takeover is approved.
Margaret is encouraged by the recent developments for a number of reasons.
First of all, Margaret‘s property is located just 2 km from Kennady‘s Kelvin and Faraday Diamond Deposits, both of which continue to demonstrate world-class diamond grades and tonnage.
Additionally, Kennady announced a 6,000 m drill program for this spring to test high-priority grassroots exploration targets within the Kelvin-Faraday Corridor, virtually a stone throw away from Margaret‘s property.
Interestingly, Margaret has identified kimberlite targets on its property with an exploration model that is based on similar methods previously utilized with great success by Kennady to delineate targets that led to the world-class resources of the Kelvin and Faraday Kimberlites: In August 2013, Kennady reported “exceptional diamond recoveries“ from a 5,000 m drill program, whereafter its then 18.7 million issued & outstanding shares appreciated strongly from about $2 to $8.50 CAD in less than 4 months.
Margaret‘s upcoming drill program will test up to 6 kimberlite targets, whereas some EM responses exhibit a similar shape to the Faraday Kimberlite. With a market cap. of $6 million CAD, Margaret is looking to strike it big in the next weeks.
Both the Margaret Lake Property and the Kennady North Property are easily accessible from the winter spur road leading to the Gahcho Kué Mine, located just 9 km south of the Margaret Lake Property. Both Margaret and Kennady will conduct grassroots drill programs soon to discover new diamondiferous kimberlites in order to make this region even more of a hot spot than it already is.
As kimberlite pipes typically occur in clusters, there exists potential to discover more diamondiferous pipes in proximity to Gahcho Kué, especially with modern exploration methods, whereas Wikipedia even notes that “there are also several unexplored kimberlite occurrences scattered over several kilometres“ around Gahcho Kué.
Margaret Lake Diamonds Inc. is currently finalizing plans to conduct a drilling program, scheduled to commence before spring breakup in April, to test up to 6 kimberlite targets on its 100% owned Margaret Lake Property (23,199 hectares; no underlying royalties). According to today‘s press-release:
“Each of the targets displays a gravity low, bedrock conductor, or combination of both, and have been interpreted as having geophysical characteristics potentially representing kimberlite bodies. Margaret’s exploration model is based on similar methods previously utilized by Kennady Diamonds Inc. to delineate kimberlite targets. Kennady noted correlations between targeting non-magnetic pyroclastic kimberlite targets located next to a magnetic kimberlite dyke, with electromagnetic (EM) and gravity responses. This exploration model ultimately led to the delineation of the Kelvin-Faraday resource located contiguous to the south and east of the Margaret Lake Property. Margaret notes that some EM responses received from its targets exhibit a similar shape to Kennady’s Faraday Kimberlite.
Target - Drop Lake DIA14-002
Airborne EM data suggests a moderately conductive lake response. Ground EM data confirms this conductor. HeliFalconTM airborne gravity gradiometer (AGG) data inversion results also show a coincident response. Indicator minerals have also been recovered down ice of this target on the western shore of the lake.
Two maps on the left represent resistivity data with the map, on the right representing airborne gravity.
Target - ML006 and ML007
Airborne EM data suggests a moderately conductive lake response on both targets. Ground EM data confirms these conductors. HeliFalconTM AGG data also exhibits a well-defined response that mirrors the EM in shape and size.
Map on the left represents resistivity data, map in centre is MaxMin EM data and map on right is airborne gravity data.
Target - ML041
Target displays semi-coincident ground EM and gravity signatures. This occurs on a NE-SW trend similar to the trend of the Kelvin-Faraday Kimberlites. Modelling shows the EM signature is persistent at depth.
The map on the left represents ground gravity data with the dots being bathymetric survey locations. Map on the right is ground EM data.
Target - ML051
Target exhibits parallel EM conductors that are semi-coincident with ground gravity signatures. A striking northwest feature exits the lake and trends on to land, suggesting that you can rule out that the geophysical responses are due to lake sediments. The NE-SW trend is similar to Kelvin-Faraday Kimberlites. When modelled the EM signature is persistent at depth. This is further evidence that what is seen here is due to bedrock geology.“
Maps show ground gravity data on the left and EM data on the right.
Target - ML009
Approximately 100 m diameter bathymetrically corrected discrete gravity low anomaly.
To date, Kennady has discovered 5 kimberlite bodies, Kelvin, Faraday 1-3, Faraday 2, Doyle and MZ, whereas Kennady announced on March 20 that “Results to date indicate an increase in size for the Faraday 1-3 complex, with continuity in the high-grade hypabyssal sheet rocks linking the two pipes together. These factors will be accretive to kimberlite tonnage potential when the geological model for Faraday 1-3 is updated.”
The Faraday Kimberlites hosts a NI 43-101 Inferred Resource of 5.02 million carats contained in 3.27 million tonnes with a grade of 1.54 carats per tonne and an average value of $98 USD per carat at a bottom cutoff size of 1 mm. Faraday 2 = 3.13 million carats (1.39 million tonnes @ 2.24 c.p.t. and $112 USD/ct). Faraday 3 = 1.9 million carats (1.87 million tonnes @ 1.01 c.p.t. and $75 USD/ct). Faraday 1 Target for further exploration: 0.6-1.2 million tonnes @ 1.5-3.7 c.p.t.
The Kelvin Kimberlite hosts a NI 43-101 Indicated Resource of 13.62 million carats contained in 8.5 million tonnes with a grade of 1.6 carats per tonne and an average value of $63 USD per carat. High-value population of white gems present in the larger size fractions (D-colour potential). Highest value stones 2.84 ct ($2,640/ct); 4.42 ct ($1,416/ct), 2.56 ct ($1,357/ct) and 2.38 ct ($1,290/ct).
Full size / Some of Kennady‘s largest and highest value diamonds were recovered at the Faraday Kimberlite Pipes. Margaret Lake Diamonds noted today that some EM responses received from its targets exhibit a similar shape to the Faraday Kimberlite. (Picture source)
“The quality of the Faraday diamonds is better than Kelvin in all value parameters: Colour: Significantly higher proportion of white stones and the presence of a fancy yellow population. Size: Faraday #3 – recovered a high-quality 7.8 carat white gem, the largest diamond on the project to date. Faraday #2 - 45 diamonds >1ct from 262 t compared to 44 diamonds >1 ct from 612 t in Kelvin sample. A notable trend of increased quality with diamond size. Shape: The larger stones show good crystal form, which translates to better yield when cutting and polishing.“ (Source)
“The Gahcho Kué Mine (see picture above) started pre-commercial production in 2016 and went into commercial production in the middle of last year. There has also been a persistent myth that diamond prices will go up forever, Des Kilalea (mining analyst with Canaccord Genuity in London) adds. But this is mitigated by the fact that even though mines like Gahcho Kué are productive, the supply of newly mined diamonds is about to go down. “From about 2019, diamond production will start falling. That‘s certain,“ he says. Richard Hatch, analyst with RBC Capital Markets in London, agrees. In a presentation last year, he noted that exploration for new diamond sources is focused on regions (including Canada) where previous ore bodies have been found.“ (Source)
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: $0.13 CAD (04/04/2018)
Market Capitalization: $6 Million CAD
German Symbol / WKN (Frankfurt): M85 / A2ARXY
Current Price: €0.076 EUR (04/04/2018)
Market Capitalization: €3.5 Million EUR
Report #1 “Glittering Exploration Opportunities Next to Canada‘s Diamond Mines“
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, holds a long position in Margaret Lake Diamonds Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in Margaret Lake Diamonds Inc.