GGL finds nickel during diamond hunt

Vancouver — Sounding somewhat reminiscent of Diamond Fields’ mid-1990s Voisey’s Bay nickel discovery in Labrador, GGL Diamond (GGL-V, GGDMF-O) has come across nickel mineralization during the course of its diamond exploration program in the Winter Lake project area, located about 260 km north-northeast of Yellowknife, N.W.T.

With spot nickel prices touching highs on tight supply, the discovery analogy certainly wasn’t lost on investors, who sent the stock soaring more than 1,000% to an inter-day high of $1.50 per share. The stock closed the day at 83, up 70 per share on an astounding 52 million shares of volume. Its trading activity accounted for more than half the TSX Venture Exchange’s total volume on April 4.

An exploration team hunting for kimberlites prior to last winter’s freeze-up sampled a 60 by 20-metre outcrop of altered ultramafic rock just west of Newbigging Lake. Sampling returned an assay of 0.41% sulphide nickel, plus copper and cobalt values. GGL is also encouraged by the sample’s high magnesium oxide content (31.93% MgO), noting its mineral geochemistry plots as an aluminum-undepleted komatiite, similar to ore-bearing material from the nickel camps of Thompson in northern Manitoba and Kambalda in Western Australia.

“Our fellows that were out in the field were astute enough to recognize the ultramafic rocks (serpentinite), but the actual results from that didn’t come until Christmas time,” explains GGL Diamond president and CEO Ray Hrkac. “By itself, it really wasn’t very meaningful; it took quite a bit of work then after that.”

GGL re-examined data from the remainder of its claim area and noted high nickel values were occasionally reported in soil geochemistry samples over a 33-km trend.

One area highlighted by the geochemical results is 25 km north of the nickel grab sample and also contains significant copper. The area of the soil sample is mostly covered by overburden, although some gossanous outcrop was reported.

Following its discovery, GGL quietly expanded its land position to the north and southwest covering an area of more than 80 by 20 km, over what it interprets as the most prospective portion of the potential nickel belt. It now holds about 1,200 sq. km bound by Dogrib Nation Withdrawal Lands to the west and tying onto claims held by Arctic Star Diamond (ADD-V, ASDZF-O) to the south and east.

“It looks like a legitimate belt; it has potential,” Hrkac says.

The 70-year-old prospector is quick to give credit to the recent mapping out of the region by the Geological Survey of Canada (2005 — Slave Craton Interpretive Bedrock Compilation) showing the prospective belt of favourable mafic-to-ultramafic volcanics that hosts nickel mineralization.

The company also reinterpreted previous airborne geophysical surveys (magnetic and EM) flown over its project area. Conducted on 60-metre line spacings, the helicopter survey outlined a 15-km fold-like structure that ranges from 500 metres to 2 km in width.

Hypothesized limbs of the fold structure range from less than 10 metres to more than 400 metres thick. The EM anomaly over the fold structure forms an elongated figure-8 where the limbs of the EM anomaly almost join at its centre.

The geophysical anomaly is also coincident with positive geochemistry and the gossanous outcrop, giving GGL an attractive exploration target for its upcoming season after the snow has melted.

GGL Diamond, previously known as Gerle Gold, has been exploring for diamonds in the Northwest Territories’ Slave Craton since 1992 with a land position of about 1,600 sq. km, plus a 40% carried interest in a partnership with De Beers Canada on about 52 sq. km of leases. The junior also holds some copper-gold porphyry projects in north-central B.C.

Shares of GGL have settled into the 75-range, giving the company a $79-million market capitalization based on its 105 million shares outstanding. The company expects to reap about $8 million from the exercise of outstanding warrants and stock options that are now all “in the money.”