Ashton ups financing

Vancouver — Riding the success of kimberlite finds in Nunavut and Quebec, Ashton Mining of Canada (ACA-T) has increased its planned financing to $8 million from the previously tabled $3 million.

The diamond explorer will raise an additional $1 million under the terms of an earlier announced $3-million financing. The deal now involves 3.64 million units priced at $1.10 each. Each unit consists of one flow-through share and half a purchase warrant. A full warrant entitles the holder to purchase one flow-through share at $1.40 before June 30, 2002. In addition, Ashton Canada, a wholly-owned subsidiary of Rio Tinto (RTP-N), has agreed to subscribe for 3.64 million units priced at $1.10 each, adding $4 million to Ashton Mining’s coffers. Each unit holds one share and 1.25 warrants. A full warrant allows the holder to purchase one share at a price of $1.40 before June 30, 2002. After the deal is complete, the Rio Tinto and its subsidiary would hold just over 31 million Ashton Mining shares.

Ashton Mining expects the deals to close before Dec. 7.

Over the past few months, Ashton Mining tabled promising microdiamond counts from the newly discovered Artemisia kimberlite pipe in Nunavut and cut ultramafic igneous rock described as “consistent with kimberlite” in the Otish Mountains region of north-central Quebec.

Located on the 531-sq.-km Kim property, the Artemisia pipe was discovered earlier this year by following up an indicator mineral dispersion fan. Prospecting subsequently uncovered kimberlite float over an area of 140 by 150 metres. A vertical drill hole was collared in the centre of the float area and intersected kimberlite breccia to the bottom of the hole at 169.2 metres of depth.

Microdiamond counts from a 103.2-kg sample collected from the core returned an encouraging 342 microdiamonds (0.1-to-0.5 mm in one dimension) and 38 macrodiamonds (at least 5 mm in one dimension). The largest stone came in at 1.23-by-1.15-by-1.1 mm.

Based on the results additional drill core will be analyzed for microdiamonds, as will 1-tonne of outcropping kimberlite collected during the fall drill program.

The Kim property is situated 500 km north of Yellowknife and is part of the Slave regional joint venture with Ashton Mining holding a 90% stake. Pure Gold Minerals (PUG-T) has the remaining 10%.

In Quebec, two of the four geophysical anomalies tested during a recently completed drill program hit “kimberlite-looking” bodies.

Located 1 km south of the first geophysical target, which hit a 98-metre interval of kimberlitic looking rock, a second magnetic anomaly yielded a similar ultramafic igneous rock some 18 metres under overburden. Drilled vertically, the hole was stopped in the body at a depth of 101 metres. A second hole was collared from the same site and drilled at 60 degrees, hitting similar material from 22-to-35 metres down-hole. The remainder of the hole hit gneiss with intervals of kimberlitic rock down to a depth of 105 metres.

Two other anomalies tested during the first round program failed to return any ultramafic material.

Despite the apparent discovery of two kimberlite bodies, Ashton Mining is taking a cautious approach and won’t make a definitive call on whether the ultramafic rock is a kimberlite until petrographic laboratory tests have been completed.

Ashton Mining holds more than 1,760 sq. km in the Otish Mountains area in a joint venture with Quebec government-owned Soquem. Since 1996, the pair has been searching for diamonds in the northern Quebec portion of the Superior Craton. After carrying out reconnaissance programs of heavy mineral sampling and airborne magnetic surveys on more than 450,000 sq. km of prospective terrain, the joint venture initially staked 1,000 sq. km of key ground in two areas of Quebec during the second half of 2000. Ashton zeroed in on the Otish Mountains region, 275 km northeast of Chibougamau, and the Caniapiscau area, 500 km east-northeast of Radisson.