Forest Gate increases leverage with diamond find

Forest Gate Resources (FGT-V, FOGTF-O) has found diamonds on its West Side property in the Fort la Corne area of Saskatchewan.

While the company doesn’t own enough of the kimberlite to consider mining it, the discovery increases its bargaining position should Shore Gold (SGF-T, SHGDF-O) develop the 122 kimberlite pipe in question as an open pit.

The hole was 3 inches in diameter and intersected 11.6 metres of kimberlite.

Forest Gate’s wholly owned property sits on the western edge of the 122 kimberlite. Shore Gold has a much larger piece of the kimberlite — and of Fort la Corne — through its joint venture with Newmont Mining (NMC-T, NEM-N).

So while the Forest Gate’s drill program consisted of only two holes — the other hole intersected only 1.8 metres of kimberlite and wasn’t sampled — it believes its land position is its strong suit.

“If Shore Gold does an open pit, they would have to talk to us,” says Andre Laferrier, an exploration geologist for Forest Gate. “It’s not a big property, but it’s very strategic in the area.”

In Toronto on the results, the Montreal-based company’s shares were up roughly 35% or 5 to 22 on roughly 2.8 million shares traded.

Two macrodiamonds were included in the 27 recovered diamonds. Macrodiamonds are stones with two faces greater than 0.5 mm. Forest Gate says the largest measured 0.68 mm by 0.51 mm by 0.30 mm.

Ten diamonds were found on a 0.105 mm sieve, another 10 on a 0.15 mm sieve, four on a 0.212 mm sieve, two on a 0.3 mm, and one on the 0.425 mm sieve.

The company says 25 of the 27 diamonds are high-value white diamonds.

The company describes the volcaniclastic kimberlite as “coarse grained” containing roughly 1% red garnets.

“We set out to find diamondiferous kimberlite on the West Side property and we did,” said Steve Roebuck, Forest Gate’s vice-president of exploration.