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Msg  65397 of 66665  at  7/17/2019 8:52:45 PM  by


Diamond & Specialty Minerals Summary - 17th

Diamond & Specialty Minerals Summary for July 17, 2019

2019-07-17 17:28 ET - Market Summary

by Will Purcell

The diamond and specialty minerals stocks box score on Wednesday was a mediocre 68-66-160 as the TSX Venture Exchange rose seven points to 587 and polished diamond prices inched lower. Robin Goad's Fortune Minerals Ltd. (FT) lost 1.5 cents to 8.5 cents on 2.32 million shares. There has been no news since early June, when the company reminded investors that an update of a 2014 feasibility study of the Nico cobalt project in the Northwest Territories was "nearing completion." Perhaps it is even nearer now.

Patrick Power's Arctic Star Exploration Corp. (ADD), unchanged at five cents on 270,000 shares, has discovered two new kimberlites on its Timantti property in east-central Finland. The new discoveries, named Plug and Karhu, are just west of the Vasa kimberlite dike discoveries made last year, and they are about two kilometres north of the three Wolf kimberlites, two of which, White and Black Wolf, were turned up by a previous explorer in 2005 and the third, Grey Wolf, was discovered by Arctic Star last year. The two new kimberlites were uncovered using an excavator, not a drill, much like the Vasa dikes.

Mr. Power, president and chief executive officer, says that the Plug and Karhu kimberlites were found within 1.5 metres of the surface in a heavily forested area. The bodies -- more dikes perhaps, since Arctic Star says nothing about their geometry -- appear unrelated to the Vasa dikes, which are just 140 metres east of Plug and 450 metres east of Karhu. The company has recovered an unknown amount of kimberlite from the two finds, and more material found in similar zones nearby.

The two new kimberlites lie up-ice from an area that had previously produced promising indicator mineral chemistry. The chemistry from the indicators was markedly different from what turned up in the Vasa dikes, which was a strong clue that new kimberlites -- perhaps with a higher diamond content -- existed nearby. Mr. Power says in a promotional "I told you so" that this was why the company persisted in working in the area. He says that Arctic Star is now waiting to find out if Plug and Karhu "echo the chemistry of the positive till anomaly."

Mr. Power adds that the new discoveries further serve to confirm that the company is "dealing with multiple kimberlite occurrences," which bodes well for further finds. Therefore, he and his crew are "strategically planning to do more work through the fall" to search for additional kimberlites, and to define the size, shape and diamond content of the latest finds.

Veteran diamond explorer, Buddy Doyle, who joined Mr. Power as Arctic Star's vice-president of exploration 15 years ago, also chimed in. He was "amazed that we can discover kimberlites using the very inexpensive excavator technique." This is the "most inexpensive diamond exploration work I have been involved with," he enthused. That is fortunate, as Arctic Star's treasury is rarely flush with cash.

There is no doubt that Timantti is favourable for diamonds. Arctic Star's diamond counts from the three Wolf pipes have been plentiful and an earlier mini-bulk test of White Wolf suggested a grade of 0.14 carat per tonne. Further, the area is less than 500 kilometres east of the prolific Lomonosov and Grib pipes in the Archangelsk region of northwestern Russia. Lomonosov hosts over 115 million carats of diamonds and Grib holds nearly 100 million carats.

Jared Lazerson's MGX Minerals Inc. (XMG), down one-half cent to 24.5 cents on 36,000 shares, says that its Driftwood magnesium project has an encouraging archaeological impact assessment. The report shows "no evidence of archaeological sites or areas of high archaeology potential" within the proposed project area. This is good news, save for archaeologists, as once the British Columbia government and the local First Nations start oohing and aahing over ancient artifacts, a mining project could face delays -- or worse.

The work is part of MGX's continuing prefeasibility study of Driftwood, which Mr. Lazerson, president and CEO, says will build on the positive preliminary economic assessment completed last year. That dream sheet was based on a measured and indicated resource of 7.85 million tonnes at 43.3 per cent manganese oxide. The study proposed a quarry mine with a plant that would handle 1,200 tonnes of material per day. The $236-million mine plan supported a discounted net present value of $317-million after taxes.

Morgan Good's Delrey Metals Corp. (DLRY), up one-half cent to nine cents on 18,000 shares, is set to start a 5,000-metre drill program in the Keating Hill East zone at its Four Corners vanadium, titanium and iron project in southwestern Newfoundland, just east of Stephenville. The drilling, from a proposed 20 drill pads, will test nearly four kilometres of strike length at a spacing of 300 metres along two fences, roughly 150 metres apart. The work will allow the company to complete -- one hopes -- a maiden resource estimate.

Mr. Good, president and CEO, says that "nearing launch" of the 2019 drill program at Four Corners has him and his crew are "extremely excited" -- run-of-mine excitement not being enough to sustain a promotion these days. Fortunately, Four Corners has at least three metals to provide excitement. When Delrey acquired an option to earn an 80-per-cent interest in the project early this year, Mr. Good was enthused about vanadium and its uses in the battery sector. Now, with vanadium prices slumping, he talks up the iron potential of the project.

Paul Gill's Lomiko Metals Inc. (LMR), unchanged at four cents on 162,000 shares, is beavering away on a resource estimate for the Refractory zone at its La Loutre graphite project in southwestern Quebec. Mr. Gill, president and CEO, is expecting good news, as he is already off and promoting the project as a potential supplier of graphite to the "burgeoning electric vehicle market," which is expected to drive demand for anode graphite to a nine-fold increase over the next decade -- assuming, of course, that events of the next 10 years unfold exactly as expected.

Lomiko, which has already wrested an 80-per-cent interest in La Loutre from Quebec Precious Metals Corp. (CJC: $0.30) and seems all but certain to acquire the rest of it soon, already has a resource estimate for the Graphene and Battery zones. That estimate lists 18.4 million tonnes indicated at 3.16 per cent graphite and 16.7 million tonnes inferred at 3.75 per cent, grades that are roughly half of the reserve at the nearby mine operated by Imerys Graphite and Carbon. Fortunately, drilling at Refractory over the last few years has yielded grades handily topping 10 per cent graphite over significant intervals in several drill holes, suggesting that Mr. Gill's coming estimate will yield good news.


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