Goldcorp teams with Pele Mountain (June 23, 2004)

Less than two months after having De Beers pull out as a partner from the Festival diamond project near Wawa, Ont., Pele Mountain Resources (GEM-V) has found a suprising new partner not known for dabbling in diamonds: Goldcorp (G-T).

Pele has struck preliminary deals with Goldcorp on two of the junior’s 100%-owned properties: Festival; and the Ardeen gold project situated 110 km west of Thunder Bay, just south of the Trans-Canada Highway.

At Festival, Goldcorp can earn a half interest by spending $2 million by the end of 2006. It can pick up an additional 10% by shelling out another $1 million before 2008.

De Beers had only been involved as a partner at Festival since July of last year, having been drawn to the Wawa area by its unusual near-surface, volcanic-hosted (i.e. non-kimberlitic) diamond deposits that hold some potential for cheap bulk-mining methods.

Pele reports that De Beers did have time to complete a review of the Festival property which “concluded that De Beers globally is not interested in the deposit type found to date within the Festival property.”

De Beers’ work confirmed that Festival’s diamonds were derived from a peridotitic mantle within the diamond stability field at depths of at least 250 km, and are hosted within volcanic rocks that were deposited on the surface 2.7 billion years ago.

Futhermore, the deposits sampled and modelled by De Beers suggest a macro-diamond grade of 10 carats per hundred tonnes or less at a cut-off of 1.5 mm.

De Beers is still, for the moment, partnered with the other junior most actively looking for diamonds in the Wawa camp: Wayne O’Connor’s Band-Ore Resources (BAN-T).

At Pele’s Ardeen gold project, in similar terms, Goldcorp can earn a 50% interest by spending $3 million before 2008, and can get another 10% with a further $1.5-million expenditure before 2009.

Ardeen was northern Ontario’s first gold mine, and it produced 30,000 oz. gold and 175,000 oz. silver during the early 1930s.

In recent years, Pele has completed more than 12,000 metres of diamond drilling on the property and outlined gold mineralization in zones near the mine’s existing shaft, which was sunk to the 366-metre level.

Pele and Goldcorp expect to finalize the two option agreements by the end of July.