BHP options Alberta diamond project

After staking a 7,200-sq.-km land package in northern Alberta last year, the Canadian diamond division of BHP Billiton (BHP-N) has acquired an option on two key properties held by Buffalo Diamonds (YBU-V) and New Claymore Resources (NCS-V) in the Calling Lake area, 50 km north of Athabasca.

The Calling Lake and Varlaam properties cover 2,500 sq. km and lie 200 km southeast of the Buffalo Hills diamond project, where Ashton Mining of Canada (ACA-T) has discovered 36 kimberlites. The Calling Lake property was originally vended into Buffalo Diamonds, which subsequently optioned the nearby Varlaam claims from New Claymore in September 1998. The option was recently amended so that both properties are now owned 65% by Buffalo and 35% by New Claymore.

New Claymore President Anthony Rich tells The Northern Miner that Buffalo Diamonds has spent $2.5 million exploring the two properties and found kimberlite indicator minerals that are “extremely interesting, with a tremendous number of G9s and a fair number of G10s.”

He adds: “There are so many pyrope garnets in place that you can actually see them on the beach of Calling Lake.”

The Calling Lake property was originally acquired in 1994 by Raymond Haimila (currently a director of Buffalo) and 656405 Alberta (the predecessor to Buffalo) on the basis of heavy mineral sampling by the Geological Survey of Canada (GSC) and the Alberta Geological Survey (AGS). During 1991 and 1992, the GSC collected several 30-kg till samples south of the Calling Lake area as part of a regional study. These samples returned kimberlite indicator minerals, including eclogitic garnets, chrome diopsides, picroilmenites and chromites. For its part, the AGS collected 10 samples from the area between 1992 and 1995. Four of the samples yielded various pyrope garnets, including G9s and eclogitic garnets. One of the positive till samples was taken from the southwestern end of the Calling Lake claims.

Exploration work, conducted on behalf of Haimila and the Alberta numbered company between 1994 and 1997, included reconnaissance prospecting, sampling and limited airborne geophysics. In the spring of 1998, the property was subjected to a 4,764-line-km magnetic and electromagnetic (EM) survey at a 200-metre-line spacing, with infill grids at 100 metres. The Varlaam property was subsequently flown in the spring of 1999, with a 13,275-line-km EM and magnetic survey.

In the summer of 1998, a till sample taken from an exposure of basal till along the Calling River, east of Calling Lake, yielded a pale-yellow macrodiamond measuring 1.2 by 1 by 0.1 mm. Additional sampling of basal till and stream sediment at the site produced indicator minerals of magnesium-rich olivine, chrome diopside, pyrope garnet and chromite.

After amalgamating with the Alberta numbered company and optioning the Varlaam property, Buffalo Diamonds initiated heavy mineral sampling across the Calling Lake area in the fall of 1998. Utilizing available access routes on the two properties, more than 500 samples of 25-30 kg each were collected from glacial till and streams, as well as beach sand along the edge of Calling Lake.

“A significant quantity” of indicator minerals were recovered along a 6-km stretch of the Calling River East area, 10 km downstream from Calling Lake. The sample site of the diamond recovered earlier occurred at the mid-point of the anomalous stretch.

Individual samples yielded up to 12 indicator grains per sample and included a diamond inclusion chromite, several near-diamond inclusion chromites and diamond inclusion eclogitic garnets. Other indicator minerals recovered include magnesium- and chromium-rich picroilmenite, magnesium-rich olivine, chrome diopside and pyrope garnets. The variety and chemistry of indicator minerals recovered along the Calling River East area would suggest that they have been derived from the weathering of a potentially diamond-bearing kimberlite.

Auger sampling

Follow-up auger-sampling was carried out in early 1999. Seventy-one overburden holes were completed on the properties, 62 of which were concentrated in the Calling River East target area. Indicator mineral counts from the auger drilling were typically lower than the anomalous stream-sediment samples taken from Calling River. This led Buffalo Diamonds to suggest that the indicator minerals may have originated in Calling Lake.

“Indicator minerals dispersed from Calling Lake may have subsequently become concentrated in the Calling River paleo-drainage system or reworked locally and incorporated into till by subsequent glaciation,” according to a company release.

Buffalo’s exploration efforts then turned to the southern half of Calling Lake, where beach samples taken from four sites on the southern and western shores yielded 1,002 grains of angular to sub-angular pyrope garnets, including 60 G10s and an undisclosed number of diamond inclusion eclogitic garnets. (Sixty-six G10 garnets have been found on the Calling Lake properties.) In addition, mineral grains of chromite, chrome diopside, picroilmenite and olivine were recovered from the beach sands. One of the G10 garnets contains more than 10% (by weight) Cr2O3 and less than 1% (by weight) CaO.

Fifty of the G10 garnets were recovered from a 4-to-5-km-long area of the western shoreline of Calling Lake. Along this stretch of shoreline, there is a noticably abrupt change in the beach sediment from the well-rounded quartz-feldspar sand outside of the target area to sand interbedded with 1-to-2-inch purple-to-violet layers of pyrope garnets and oxide grains in the target area.

Nearby source

The variety, quantity, angularity and localized nature of the indicator minerals suggest a potential nearby source within the lake. “The indicator minerals would have been concentrated and distributed by an on-shore current,” says Rich. “It’s a fairly big lake, about 10 miles across but not very deep.”

Similar concentrations or layers of indicator minerals were found in beach sediments on the southeastern shores of Calling Lake, 10 km southeast of the west shore target.

Sampling of beach sediment between these two target areas returned indicator mineral counts ranging from 0 to 11 grains per sample, compared with results of up to 500 grains per sample. The Calling Lake target area covers the Varlaam and Calling Lake properties.

The indicator minerals recovered from the Calling Lake area are reported by Buffalo to be different in type and chemistry to the Calling River East target, suggesting potential for two distinct sources.

In December 1999, a high-resolution helicopter-borne magnetic survey was flown in order to define 36 previously identified geophysical anomalies within the Calling Lake area in preparation for drilling.

A 1,000-metre program of core drilling under the direction of Edmonton-based Apex Geological Consultants was completed in early 2000. At the time, Apex agreed to carry the cost of managing the program under the condition that no personnel other than Apex and the drill contractor be allowed access to the property during drilling. Buffalo was denied access to the drill core until it secured sufficient funds to cover Apex’s costs.

At the end of March 2000, Apex drill-tested 10 magnetic targets. Nine of the holes tested targets in Calling Lake on the Varlaam property, whereas the tenth tested a target immediately southeast of Calling Lake on the Calling Lake property.

The core has since remained in Apex’s possession, locked in storage owing to the fact that certain invoices, totalling $57,000, remain unpaid. Neither Buffalo or New Claymore has seen the core.

Shopping around

Unable to raise funds for further exploration, Buffalo Diamonds has been shopping the Calling Lake project around for several years. In the spring of 2001, after reviewing Buffalo Diamond’s data, BHP staked 7,200 sq. km of ground surrounding the project.

Last month, BHP entered into an option agreement with Buffalo Diamonds and New Claymore to earn up to a 70% interest in the Calling Lake and V
arlaam properties. BHP can earn an initial 51% by spending a minimum of $600,000 on exploration by Aug. 31, 2003, and a further 9% by completing a 50-tonne bulk-sample on any kimberlite discovery. BHP can boost its interest to 70% by completing a feasibility study.

In the meantime, New Claymore continues to concentrate its exploration efforts in Alberta, where it holds more than 12,424 sq. km of mineral permits. In the St. Paul area, 27 km to the southeast of Calling Lake, Rich says the company is recovering an even greater number of kimberlite indicator minerals. “We are picking up such tremendous numbers of G9s and G10s that we have to cut the samples,” he states.

New Claymore’s land position in St. Paul covers 2,745 sq. km. Rich hopes to subject the area to geophysical surveys this summer.

New Claymore also holds 3,700 sq. km of ground in the Whitefish Tower area, 50 km south of Ashton’s Buffalo Hills project. Rich says the AGS has released results of an extensive geochemical study done that has recovered indicator minerals comparable to the main pipes of Ashton. New Claymore has one clear seismic target requiring follow-up work.

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