Slow but steady for Dianor at Leadbetter

Shares of Dianor Resources (DOR-V) have not escaped the downdraft of the junior mining market in recent weeks, touching as low as $1.20 per share in May after nearly topping $2.00 in March.

But the junior explorer is far from inactive as it awaits further results from the 105 samples, each weighing 6 tonnes, excavated on the Leadbetter property near Wawa, Ont. Exploration on the project continues apace with three drills delineating the extent of the Leadbetter conglomerate at 200-metre intervals along 100-metre line spacings.

Because the diamond-bearing conglomerate is so extensive (roughly 1.5 by 2 km), outlining boundaries and determining continuity will require even more patience than your average slow-moving diamond exploration project. By comparison, the Victor kimberlite deposit near James Bay, where De Beers Canada is currently building a mine, covers only 15 hectares on surface.

Dianor expects the program to continue until the end of the year.”We’re trying to prove up the geometry and size of the body to end up with some sort of very preliminary resource calculation,” says Dianor president John Ryder.

Results from the separate, 6-tonne sampling program will help determine the distribution, size variation and continuity of the diamonds between drill holes, but because the sample excavations are only 1 metre deep, Ryder says the project cannot even be considered to be at the mini-bulk sampling stage yet. Pre-mini-bulk sampling is more like it.

“It’s as if you have a table with a veneer on it,” he says. “What we’re doing is scratching the veneer and trying to find out what the table is made of.”

So far, Dianor has received results from only three of the 105 samples. They are from previously sampled pits in the stratagraphic middle, upper and top zones of the conglomerate unit. The largest diamond, recovered from the upper zone, weighs 0.328 carats, while most of the 257 stones recovered from the trio of samples consist of well-preserved white to off-white, transparent to translucent octahedrons.

Ryder is reluctant to put a target date on retrieval of the remaining results, saying the time involved in the specialized task of picking and describing the diamonds is difficult to estimate, but says results will be released as the company receives them from SGS Lakefield Research.

Included in the program were 11 6-tonne samples from the alluvial deposits of sand and gravel flanking the conglomerate’s southern exposure to determine if there are any diamonds contained in the unconsolidated material where Joe Leadbetter, the prospector responsible for the original discovery, panned a 1.39-carat, gem-quality diamond.

Diamond distribution

Once we have a look at the results, our objective is to continue doing the full outcrop sampling so that we end up with a sense of diamond distribution for all the outcrop areas, at least the surface exposures,” Ryder says.Previous sampling for due diligence purposes returned 19,645 microdiamonds and macrodiamonds from 506 kg of bedrock from pits covering about 400 metres of strike length.

Based on these results, Dianor projected a diamond grade of 2.12 carats per tonne for Leadbetter. The Victor deposit has a grade of only 0.23 carat per tonne, but because the stones are of such high quality, the rock has a value of $120 per tonne.

Results of both the drilling and sampling since the due-diligence stage suggest that there is good continuity of diamond distribution in the Leadbetter conglomerate.

Most of the work has focused on the northern part of the conglomerate, but Ryder says future work will look at the central and southern section of the unit. The east-west boundaries of the conglomerate are defined by a fault in the east and an outcrop in the west. Aside from large outcrop sampling and continued drilling, the summer program will include reconnaissance and detailed mapping.

The geological history of the Leadbetter diamond deposit remains a curiosity, with geologists and petrographers still trying to figure out how the diamonds ended up in conglomerate (diamonds usually occur in kimberlites) and why in this particular unit of conglomerate, and not in others scattered throughout the region. There have been three cycles of volcanism and sedimentation in the area, and conglomerates occur in each cycle.

“The conglomerate is just what the diamonds ended up in,” says Ryder. “We believe it is more a proximal-type conglomerate than a distal conglomerate, but we are still trying to unravel how it formed. Each week we get a different answer.”

Dianor has extended its reach beyond the Leadbetter property by taking an option to earn 50% of Metalex Ventures‘ (MTX-V, MLXVF-O) 60% interest in the 357 Mori claims nearby. The agreement increases Dianor’s Wawa land position to 40 sq. km. Metalex has collected 130 drainage, till and rock samples on the claims to test for diamonds and diamond indicator minerals.

Dianor is earning an 80% interest in Leadbetter by paying $3 million in cash and stock and spending $5 million on exploration over a 4-year period and paying an additional $5 million within eight years of the signing of the option agreement. The company can also earn a 70% interest in 49 patented mining claims located to the east and south of Leadbetter.

The junior is well financed for ongoing exploration. In February, Dianor raised $12.5 million in a bought-deal private placement of 6.5 million shares priced at $1.15 per share and 3.13 million flow-through shares priced at $1.60 per share. Dianor banked an extra $2.6 million when investors exercised warrants to purchase shares at 35 per share earlier this year.

— The author is a freelance writer specializing in mining issues, and principal of Toronto-based GeoPen Communications (www.geopen.com).