by Will Purcell
The diamond and specialty minerals stocks box score for Friday was a negative 64-71-130. The TSX Venture Exchange rose fractionally to 810 while polished diamond prices fell 0.5 per cent. Mark Smith's Niocorp Developments Ltd. (NB) lost one cent to 83 cents on 327,000 shares. The company is quietly plodding along with its Elk Creek niobium and scandium project in Nebraska. The mine will cost nearly $1-billion (U.S.) to build, which accounts for the slow pace.
Dominion Diamond Corp. (DDC), up 53 cents to $12.22 on 446,000 shares, has sold the largest diamond ever produced from its Ekati mine at its latest sale of rough. The 186-carat gem fetched $2.8-million (U.S.), about $15,000 (U.S.) per carat. Brendan Bell, the company's chief executive officer, says the gem was recovered in June during the processing of kimberlite from the Pigeon pipe. He says Dominion is particularly encouraged by the find, as it came from the early benches mined at the new Pigeon pit, serving as a reminder that there continues to be upside potential to the modelled prices used for the Ekati kimberlites.
Unfortunately, the upside of one fortunate find does not add much upside potential. The current reserve at Pigeon stands at 6.6 million tonnes at 0.48 carat per tonne, and the 3.2 million contained carats were modelled at just over $150 (U.S.) per carat -- a total of $480-million (U.S.). Adding the supposedly unexpected contribution of one huge diamond boosts the overall value by less than 90 U.S. cents per carat. (Of course, finding them on a regular basis could juice the modelled value significantly.)
Where Dominion could benefit the most from such finds is Jay, where the latest modelled diamond values for the two main phases of kimberlite are just $56 (U.S.) per carat and $49 (U.S.) per carat respectively. At an average grade of 1.87 carats per tonne, the gross rock value is roughly $100 (U.S.) per tonne, putting considerable risk into the project which carries a hefty capital cost. Dominion's diamond modellers have presumably built in some allowance for large and valuable gems, but mining realities typically yield better results, unless a company's modellers got carried away with their optimism. (Fortunately, Dominion's crews have generally been a conservative lot.)
Basil Botha and Miles Rideout's Latin American Minerals Inc. (LAT), up one-half cent to 34.5 cents on 219,000 shares, is seeking a joint venture partner for its Itapoty diamond project in Paraguay, assuming that it still owns the project. Mr. Botha, chairman and CEO, and Mr. Rideout, former CEO and current vice-president of exploration, say that the validity of the Itapoty licence is "currently under review" by the Paraguayan government. They say that "certain property payments" were delayed for brief periods over the past year because of delays in the company's financing operations. While the government previously accepted these delays, it is apparently taking a new look at the situation before it bumps Itapoty up to an exploration licence from a prospecting one.
Investors may not lose much sleep over Itapoty's fate, as it has not figured prominently in Latin American's promotion for a few years. Nevertheless, the company and its previous partner, Olivut Resources Ltd. (OLV: $0.245), found 80 macrodiamonds, accompanied by kimberlite indicator minerals, in stream sampling on the property. Unfortunately, they never were able to determine where the gems and indicators were coming from. Still, Mr. Rideout is understandably reluctant to just abandon the project.
Donald Lay's Medallion Resources Ltd. (MDL), unchanged at 2.5 cents on 30,000 shares, has sold 10 million shares at three cents, raking in the full $300,000 it set out to raise in early July. At the time, Mr. Lay, president and CEO, said the cash was for pilot-scale metallurgical testing and other work associated with its proposed rare earth elements extraction plant. "Medallion is developing untapped sources of rare earths," blares the front page of Medallion's website. The company has been unable to accomplish much, given that its treasury has been tapped out for years. Mr. Lay has been touting plans to "achieve significant near-term production" for years now, using "simple and well-known processing techniques" to extract rare earths from monazite. It plans to acquire the monazite from the discard piles of mineral sands mines around the world and run the material through its proposed processing facility.
Dave Gagnon's Tantalex Resources Corp. (TTX), up one cent to 15 cents on 43,000 shares, has formed a joint venture with a Democratic Republic of the Congo (DRC) government company, La Congolaise d'Exploitation Miniere SA (Cominiere) to "explore for, develop and to put into production high-tech mineral deposits that may exist" on Cominiere's properties in the DRC. An enthused Mr. Gagnon, CEO of Tantalex, said the deal gives his company a 70-per-cent stake in the joint venture. That, he says, speaks volumes about how Tantalex's reputation has grown within the region as being "trustworthy, ethical and socially responsible."
Maybe so, but Mr. Gagnon said nothing about Tantalex being financially solvent, perhaps because the company had a current account deficit of nearly $2.8-million at the end of May. (It did raise $425,000 in July and at last report Mr. Gagnon was trying to sell 10 million shares at 10 cents.) Mr. Gagnon also said nothing about what minerals the joint venture would be seeking, although investors able to find Cominiere's promotional materials and to wade through them in the native French will note that Tantalex's new partner considered its prospects favourable for tantalum, niobium, tungsten, lithium and gold, as well as any other recoverable minerals -- an addendum that suggests Cominiere's crew might do well on Howe Street.
Brian Findlay's Dajin Resources Corp. (DJI), up one-half cent to 16.5 cents on 79,000 shares, is inching closer to a drill program at its Teels Marsh lithium brine project in Nevada. The company has wrapped up seismic work and selected drill targets on a two-hectare portion of the property. Mr. Findlay president and CEO, says that road and drill pad construction are under way at two sites. He adds that Dajin plans to drill two holes at each site. One will reach a depth of about 150 metres, while Dajin will drill the second "deeper, to test deeper targets." Mr. Findlay, clearly a master at stating the obvious, says the drilling "will provide data to constrain any resource estimate calculated following drilling."