Kennecott driving Lac de Gras ramp

It’s official. Kennecott has informed DHK Resources that it intends to extract a 5,000-tonne bulk sample from the Tli Kwi Cho (DO-27) diamond-bearing pipe in the Lac de Gras region of the Northwest Territories. The company also intends to construct a processing plant at the Con gold mine in Yellowknife.

“Of course we’re ecstatic about the underground program,” said George Stewart, president of Kettle River Resources (VSE). “This program will cost upwards of $10 million, which doesn’t include ongoing exploration programs to test other targets. The phone has been ringing off the hook from people who are finally beginning to take this diamond project seriously, particularly from the Yellowknife area.”

Stewart said Kennecott’s decision represents a major commitment to diamond exploration in the North, and will likely be followed by a similar decision from the neighboring Dia Met Minerals-BHP Minerals Canada joint venture. Kennecott has already earned a 65% interest in the DHK properties at Lac de Gras by spending more than $1.5 million and making cash payments of $500,000. The remaining interest will be held equally by Kettle River, Dentonia Resources (VSE) and Horseshoe Gold Mining (ASE).

Kennecott’s interest will be reduced to 40% by virtue of a previous “area-of-interest” agreement with Aber Resources (TSE), SouthernEra Resources (TSE) and Commonwealth Gold (VSE). The agreement provides each of Aber and SouthernEra with a 10% interest, plus 5% to Commonwealth.

Stewart said mobilization for the program should begin shortly, starting with construction of a camp near the portal this fall. Subject to governmental approval, the partners expect the pipe will be reached underground during the winter.

Contractor J.S. Redpath will carry out the program by ramping down into the granite country rock. Stewart expects the ramp will spiral down to about 115 metres; crews would then drive across the pipe to collect the bulk sample. The extracted kimberlite will be trucked to the processing plant via Echo Bay’s winter road. This plant will be at the Con mine, which Kennecott recently sold (indirectly) to Miramar Mining.

Kennecott and its partners also announced results from further drilling on the Tli Kwi Cho target on the WO claim block. Some 38 holes have been drilled so far on this pipe, but results have been released from only nine. Hole 27-9 returned 21 macro-diamonds (greater than 0.5 mm) and 39 micro-diamonds from 84 kg of kimberlite core. Final results (end-of-hole) were released from a previously reported hole from the deepest sections of the pipe. This portion of Hole 27-7 returned 19 macros and 53 micros from 55.1 kg of core. More results are expected shortly from other holes drilled this year to test Tli Kwi Cho.

The end-of-hole portion of Hole 18-1 on the North Lobe (DO-18) of Tli Kwi Cho returned six macros and 15 micros from 25.6 kg of core.

Further exploration is planned for three diamondiferous pipes on the DHK claim block. Results from the DD17, DD39 and DD42 pipes are considered to be encouraging enough that drilling is planned for next year to define the size of these targets. Intense ground sampling in this region is being continued during the latter part of this year.