Despite discovering 17 new kimberlite bodies during the 2005 spring and summer drilling campaign at the Churchill project in eastern Nunavut, disappointing microdiamond results illustrate the fact that gem-quality diamonds remain rare and difficult to find.
The company raised $8.4 million in October through a private placement financing of flow-through shares priced at $1.20 each.
This year, Stornoway and its partners will spend roughly $18 million in the search for diamonds in at least six different regions across the Far North, with most of the exploration dollars focused in the eastern Arctic on the Melville and Churchill project areas.
“Diamond exploration is expensive, it takes a long time and it requires a huge commitment on behalf of both the company and its shareholders,” explains Eira Thomas, president of Stornoway.
The Churchill diamond project is comprised of 34,400 sq. km of mineral rights between the communities of Rankin Inlet and Chesterfield Inlet in the Kivalliq region of Nunavut.
“This is a project where we have recovered some very high interest mineral chemistry but we have yet to find the source of it,” Thomas says. “So far, the kimberlites we have found do not yield this type of mineral chemistry so we know that there are some sources on the property that have not been found.”
In 2004, the three joint-venture partners managed to drill 11 geophysical targets scattered along two different indicator mineral corridors before being chased out by deteriorating weather conditions. Of the six kimberlite pipes discovered, one proved weakly diamondiferous while samples from the other five were barren.
The previous year, Shear drilled 24 geophysical pipe-like targets, which were supported by limited till-sampling data. In the process, they discovered 18 kimberlites scattered across a 60 by 60-km-wide area on the Churchill claims, including two at Churchill West, an adjoining property under option to
This year, Samuel elected not to participate in the 2005 exploration program on the 2,080-sq.-km Churchill West project and will be diluted to a 47% stake. Accordingly, Shear will have a 27% stake; Stornoway, 18.5%; and BHP Billiton, 7.5%.
More than 5,800 till samples collected from the Churchill project in 2003 and 2004 have identified and constrained two geographically distinct areas of elevated kimberlite indicator mineral counts, including “high-interest” G10 sub-calcic pyrope mineral chemistry. These two corridors are called Josephine River and Sedna.
Within these corridors, Shear and its partners defined upwards of 20 discrete individual mineral trains that show up-ice cutoff and short glacial transport distances. A full suite of indicator minerals includes pyrope and eclogitic garnet, chromite, ilmenite, chrome diopside and olivine.
Drilling targets in 2005 were further whittled down using the data from last year’s 33,600 line-km of helicopter-borne magnetic and electromagnetic (EM) geophysical surveys, done at a 75-metre-line spacing. The project database contains the results of more than 6,600 till samples and 69,000 line-km of magnetic and EM surveys.
Of the 17 new kimberlites discovered by Shear during the 2005 spring and summer drilling campaign, only six of the bodies have proven diamond-bearing, albeit weakly.
The best results are from the discovery known as KD209, which lies 5 km north of the Josephine River corridor and 14 km from tidewater. A 92.6-kg sample of core held just 9 microdiamonds, but the largest stone, a clear diamond measuring 0.9 mm in its longest dimension, has the distinction of the being the largest diamond recovered in the Churchill camp yet.
Kimberlite KD209 is covered by 10-15 metres of overburden and is defined by a 125 by 100-metre magnetic low anomaly. The first hole into the target was drilled vertically and intersected only 4.1 metres of kimberlite from 79.2 to 83.3 metres depth. A second hole angled at minus 60 was repositioned to test the centre of the target, cutting 32.5 metres of hypabyssal kimberlite from 32 to 64.5 metres down-hole.
Another of the new discoveries, KD900, returned 13 microdiamonds in 329.3 kg of core sample, with the biggest stone measuring 0.84 mm in its longest dimension. Kimberlite KD900 lies along the Josephine River corridor, 12 km from tidewater. Defined by a 200 by 80-metre magnetic low signature, KD900 is up-ice of several till samples containing favourable G10 chemistry.
Prospecting has turned up 30 kimberlite boulders in the corridors, including two occurrences of kimberlite float containing abundant purple garnet, with kelyphitic rims, and macrocrystic olivine textures, and two new kimberlite showings. Preliminary analysis indicates the high-interest float contains favourable G10 chemistry and high-chrome chromites. “None of the kimberlites drilled to date have displayed the textures seen in this small piece of relatively non-magnetic float,” report the joint-venture partners.
A recent technical report prepared by Mineral Services Canada states: “The unexplained till garnets, which include most G10s recovered to date, are very likely derived from a colder, high-interest geotherm than garnets in the known kimberlites.”
In 2005, an additional 1,877 till samples were collected from the Churchill project to better define the sampling density in the core areas of the property.
Melville
Stornoway’s key project holdings cover close to 36,400 sq. km on the Melville Peninsula. The junior had initially acquired 6,070 sq. km scattered across two property packages, known as Aviat, on the north end of Melville Peninsula at the start of 2002, based on some early prospecting results by the Hunter Exploration Group.
“A group of prospectors went up there looking for nickel,” Thomas says. “They didn’t find any evidence of nickel but they did find some interesting diamond indicator results and we moved quickly to acquire these initial land positions.”
At about the same time,
Soon after, BHP Billiton staked the 4,450 sq. km Qilalugaq project, near Repulse Bay at the southern end of Melville. Both De Beers and BHP Billiton were rumoured to have discovered kimberlite float on each of their respective property packages.
“Suddenly an area where very little was known about the diamond potential was now being explored by two of the world’s largest diamond explorers and ourselves,” Thomas says.
Since then, De Beers has been systematically exploring Baffin Island. Working out of the Pingu Juak camp in 2005, 200 km north of Igloolik, De Beers began ground geophysical gravity surveys at the end of May, followed by detailed
airborne magnetic and electro-magnetic (EM) surveys. The summer 2005 program included drilling, prospecting and sampling.
Today, the Aviat project spans some 17,000 sq. km across the Melville Peninsula. Stornoway is the operator and holds a 70% interest, while BHP Billiton owns 20% and the privately held Hunter group has a 10% carried interest. BHP purchased its interest in the Aviat project from the Hunter group in June 2003 for $7.1 million. (BHP also paid $3 million for a minority stake in the Churchill project.)
In less than three weeks on the ground, Stornoway’s field crew found its first kimberlite, the outcropping AV-1, at the end of the 2002 field season while conducting reconnaissance sampling at Aviat. It turned out to contain a significant quantity of microdiamonds. An initial 186-kg composite sample collected from the surface exposure of AV-1 returned 228 microdiamonds, including two stones (2.2 and 2.08 mm in their longest dimensions) larger than a 1.18-mm square mesh screen size.
“We managed to keep the news quiet and moved very quickly to acquire a larger land position,” Thomas says. “That ultimately led to a huge amount of staking activity, surpassing the Lac de Gras diamond rush back in 1993. About 110 million acres (445 sq. km) have now been acquired in this region for diamonds.”
Around the same time as the Aviat discovery, BHP Billiton uncovered a new cluster of kimberlites at the southern end of the Melville Peninsula on the Qilalugaq property. At least nine “weakly to moderately” diamond-bearing kimberlites have been found.
The outcropping AV-1 is exposed over an area measuring about 100 metres long by 20 metres wide at the edge of a small lake, 50 km west of the coastal community Igloolik. Drilling has defined a multi-phase kimberlite intrusion, with a complex shape measuring 220 metres long and 40-50 metres wide. The body is composed of macrocrystic hypabyssal kimberlite and a transitional tuffisitic breccia phase. A single hole drilled this summer encountered a 2.3-metre-long intercept of kimberlite 170 metres west of any previous drilling.
In total, 10.4 tonnes of material collected from surface and drill core yielded a sample grade of 0.83 carat per tonne, for stones greater than 0.85 mm, with the largest diamond being a white transparent aggregate weighing 0.4 carat. Overall, the diamond population, consisting of predominantly dodecahedral and octahedral crystal forms as whole crystals and fragments, is dominated by white transparent stones, with lesser amounts of brown-coloured diamonds and little fibrous material.
“We don’t believe that AV-1 is a stand-alone economic deposit, however we are certainly encouraged that we have recovered some nice diamonds from small samples, and we are very encouraged that the remaining bodies in the vicinity are also diamond-bearing,” Thomas says.
Early results from till sampling delineated a 70-km-long corridor of elevated kimberlite indicator mineral counts, known as the Tremblay corridor, and suggested the potential for multiple sources.
Since discovering AV-1, the junior has been working diligently to build up a large database. All told, the company has flown about 100,000 line-km of geophysical surveys, in addition to collecting in excess of 7,000 till samples from the peninsula prior to the 2005 season.
“We have identified a number of high-priority anomalies from this work,” Thomas says. “We have many, many unsourced anomalies in this region, as well as numerous boulder occurrences that remain to be found.”
Almost 450 kimberlite boulder occurrences have been identified to date. Three new kimberlite showings were discovered this past summer, bringing the number of known kimberlites at Aviat to nine. All lie in a 6-km-long segment of the Tremblay corridor and all are significantly diamond bearing. The source for at least five distinct boulder trains has not yet been identified.
AV-2 was discovered in the summer of 2003, about 4 km east-southeast of AV-1. The outcropping body was tested by a single inclined hole that intersected 2.6 metres of kimberlite, followed by two other separate kimberlite sections of 9.3 and 3.1 metres. A second hole tested a magnetic anomaly, 75 metres southwest of the AV-2 showing, and hit 2.2-metre and 6.5-metre-long intervals of kimberlite.
A combined 39.4-kg drill sample of AV-2, including both hypabyssal and breccia phase, held 30 microdiamonds. The largest stone was a lone diamond caught on a +0.6-mm square mesh screen. In addition, a 48.6-kg sample collected from the surface exposure of AV-2 contained 34 stones, including a diamond measuring 1.78 mm in its longest dimension.
During the fall 2004 drill program, a new surface showing of boulders at AV-2 was tested by a single hole, which cut 2.35-metre and 2.9-metre sections of heavily altered hypabyssal kimberlite, 35 metres east of the known body. A 17.6-kg sample from the holes held just four small microdiamonds.
At AV-1A, Stornoway intersected a narrow, 2.9-metre thick kimberlite dyke while testing a geophysical response, 475 metres west of AV-1. A 9.5-kg sample held six stones, the largest caught on a +0.425-mm screen. A single hole into the AV-3 showing, 1 km southeast of AV-2, returned two narrow, altered kimberlite dyke sections. One was 0.37 metre wide; the other, 2.15 metres thick. Three microdiamonds were recovered from a 6.3-kg sample.
A series of four holes were completed in 2004 at the AV-4 kimberlite occurrence, which was discovered by prospecting, 450 metres west of AV-1. Three of the holes encountered sections of both hypabyssal and transitional phase kimberlite over down-hole lengths ranging from 15 to 61 metres. A fourth hole intersected only 2.1 metres of kimberlite.
A composite 540 kg collected from both boulders and drill core held a promising 565 microdiamonds, including 18 stones larger than 0.85 mm. The biggest diamond measures 2.2 mm in its longest dimension. In 2005, a single infill hole on AV-4 intersected 23.6 metres of kimberlite.
Another surface target, AV-5, is represented by a train of kimberlite boulders up to 2.2 metres in diameter and spread over a distance of 500 metres, some 5 km southeast of the AV-1 discovery. A small 48-kg sample from the surface float delivered an impressive 93 microdiamonds, with the longest dimension of the largest stone measuring 1.8 mm.
The AV-5 boulder showing was drilled in 2005 with seven holes. Although four of the holes hit multiple, narrow kimberlite intercepts ranging from 0.18 to 1.37 metres in width, Stornoway says these intercepts appear visually distinct from the boulders and are not believed to represent the source body.
2005 exploration campaign
The results of 2004 guided the $7-million exploration campaign in 2005, which included follow-up prospecting, till sampling, ground geophysics and the drilling of 29 holes.
The first phase of drilling began in mid-April, in which a total of 15 high-priority, lake-based geophysical targets along the Tremblay corridor were tested. Disappointingly, no kimberlites were found.
This summer, three new outcrops of kimberlite — AV-6, AV-7, and AV-8 — were discovered while prospecting. About 2 tonnes of material was collected from each of these new surface showings for dense media separation analysis. In addition, similar size samples recovered from the surface exposures of AV-2 and AV-5, with smaller samples taken from AV-3 and several of the unsourced boulder trains.
“We figure 2 tonnes will give us a pretty good first crack at estimating diamond content from these bodies,” Thomas says. “It will give us some indication of the potential for the recovery of larger stones.”
Initial small grab samples of AV-6, AV-7 and AV-8 are proving to be significantly diamondiferous: AV-6 returned 41 microdiamonds from a 35.3-kg sample, including two stones caught on a +0.85-mm-size screen; AV-7 held 49 microdiamonds in 35.1 kg of sample; and AV-8 delivered 41 stones from 31 kg of material.
“The results are encouraging,” Thomas remarks. “We’re ce
rtainly pleased with the distributions. It’s nice to see stones in each sieve class.”
All nine of the Aviat kimberlites, except for AV-7, underwent some amount of drilling in 2005. Three additional geophysical targets were tested without intersecting kimberlite. The AV-7 exposure lies 10 metres from a lakeshore and will be drilled at a later date when the lake is frozen. With the exception of AV-1 and AV-4, the kimberlites seem to be sheet-like in nature, with limited tonnage potential, although Stornoway cautions that actual dimensions and orientations have not yet been determined.
Drilling on the AV-6 showing intersected multiple narrow intervals of kimberlite up to 0.9 metre in thickness, while five of six holes on the AV-8 exposure encountered what appears to be a series of stacked sheet-like kimberlite bodies, up to 4.2 metres thick.
Further detailed till sampling was carried out in 19 priority areas outside of the known boulder trains, where anomalous till samples collected in 2004 showed favourable G10 pyrope garnet chemistry. More than 3,100 additional till samples were collected from a tight 10 by 4-km area in 2005.
It has been determined that AV-1 through AV-5 are not spinning out a lot of G10s.
“They have some beautiful diamond inclusion eclogite garnets but we are not seeing nice G10 compositions, so that gives me a whole lot of encouragement that we’ve got another generation of kimberlite bodies at Aviat that we are not yet seeing,” Thomas explains.
Elsewhere in the region, eight new kimberlite bodies were discovered in the recently completed field season on Wales Island, just off the western shore of Melville Peninsula. Wales Island is covered by 1,152 sq. km of prospecting permits jointly held by Stornoway,
“This does represent a new kimberlite field,” Thomas notes. “We are very excited about the potential of this new cluster.”
She adds: “This is a neat project, a generative project from 2003.”
The island is covered by Paleozoic rocks, making it very suitable for exploration using geophysics. An airborne survey generated a number of discrete targets, which were quickly assessed during a brief reconnaissance exploration program in August 2004. During that time, three priority geophysical targets were drilled using a lightweight, small-diameter, highly portable drill rig. Kimberlite was intersected in two of the three targets, about 7 km apart. However, there was insufficient sample to analyze for microdiamonds.
During the 2005 program, which cost $1.5 million, the drilling of eight geophysical targets resulted in the discovery of five new kimberlites: W2, W111, W10, W9 and W47. One of last year’s discoveries, W1, was also re-drilled with three additional holes. W1 appears to be the largest of the bunch, returning kimberlite intercepts of 34.6-80.2 metres. W47 also delivered intervals of kimberlite ranging from 7.2 to 35.8 metres, whereas W2 showed multiple intercepts across a range of 0.2 to 22.4 metres. A vertical hole into W2 returned almost 61 metres of kimberlite. The other new discoveries yielded intercepts ranging from 0.1 to 5.3 metres thick.
“Some of the discoveries are diatreme, pipe-like bodies and others are sort of feeder dykes,” Thomas explains.
The narrowest body, W111, lies 5.5 km east of W2, along a distinct structural feature that extends across the property for a distance of 14 km. A linear magnetic high is associated with this break.
Three narrow, parallel kimberlite dykes, at least 0.5 metre in width, were discovered by prospecting some 20 metres apart laterally, about 200 metres west of W1. The dykes can be traced in subcrop over a distance of 110 metres. About 70 kg of material was excavated from the dykes for microdiamond analysis, in addition to the 708 kg of drill core samples that were collected.
Stornoway also maintains a 50/50 joint-venture relationship with BHP Billiton concerning a further 12,500 sq. km of prospecting permits on the south-central portion of Melville Peninsula. This property package, held under the Alexis joint venture, is being trimmed back.
“A lot of the ground between Aviat and BHP’s Qilalugaq property hasn’t turned up anything terribly exciting so far, with the exception of a few anomalies that are on Stornoway’s original land package that isn’t joint-ventured with BHP,” says Thomas.
In addition, Stornoway holds a 30% interest in a further 6,000 sq. km at Melville under two separate option agreements. The first agreement covers about 4,000 sq. km in three properties, under option to Strongbow and
Stornoway is undertaking generative exploration across the Far North in 29 other areas, including an arrangement with
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