Snowfield tumbles on Ticho diamond results

VANCOUVER–Four tiny diamonds failed to impress Snowfield Development (SNO-V, SWFCF-O) investors, sending the company’s share price down 59% in recent trading.

A 1,044-kg batch of concentrate derived from a 100-ton bulk sample from the company’s Ticho project, in the Northwest Territories, produced just 0.11 carat of diamonds from four small stones.

Snowfield’s share price had gained some 20 over the past few months in anticipation of the first bulk-sample results. After the results came out, its stock fell 26.5 or 59% to close at 18.5 on record volume of 16.7 million shares. The company has a 52-week trading range of 17-54 with 83.2 million shares issued.

Snowfield has been exploring the Ticho kimberlitic diamond project, near Yellowknife, in the South Slave Craton, since 2004. Drilling proved the kimberlite to be diamondiferous, but for two years the company failed to extract a bulk sample.

By 2007, Snowfield had constructed a decline ramp through the granite and diabase cap covering the kimberlite, and last summer the company removed a 500-ton bulk sample. By November, the company had shipped 100 tons of the sample to De Beers’ dense media separation plant in Alberta for processing. The concentrate was divided into three batches; two were sent to independent Canadian diamond recovery laboratories and one was sent to De Beers’ lab in Johannesburg.

The recent results came from just one of those batches, a 1,044-kg sample processed at the Saskatchewan Research Council’s laboratory. Diamond recovery via X-ray fluorescence recovered two macrodiamonds, together weighing 8.57 mg, and no microdiamonds. Diamond recovery using a grease table recovered two more macrodiamonds for an additional 13.32 mg.

The company is still awaiting results from the remaining two concentrate samples. Results from the sample sent to South Africa are expected in early April; Snowfield has not yet received a time-line estimate from the second Canadian lab, Kennecott Canada Exploration.