by Will Purcell
The diamond and specialty minerals stocks box score on Tuesday was a weak 55-87-158 as the TSX Venture Exchange rose fractionally to 541 while polished diamond prices inched lower. Chris Taylor and Chuck Fipke's Dunnedin Ventures Inc. (DVI) closed unchanged at 6.5 cents on 4.95 million shares. There has been no news since August when Dunnedin reported encouraging assays from MPD, a copper and gold prospect in British Columbia. Dunnedin is also working the advanced Kahuna diamond project in Nunavut, but it appears to have slipped to fourth (and last) on the company's priority list.
Jean Raymond Boulle and Syband van der Spuy's Diamond Fields Resources Inc. (DFR), unchanged at 20 cents on 80,000 shares, does not expect that the second stage of a six-month non-continuous mining program on the ML-111 concession, off the coast of Namibia, will resume this year as previously projected. Mr. van der Spuy, president and chief executive officer, said that the company and its co-venturer on the marine diamond project, International Mining and Dredging Holdings Pty. Ltd., have been assessing the need for further exploration and development work in order to improve mining performance and a possible sharing of the costs.
The work, Mr. van der Spuy states, "is expected to improve recoveries from the remaining blocks under the current ML-111 plan," but he adds that the delay -- or cancellation, he is not clear -- of the second phase of marine mining is the result of the continued discussions and the development work envisaged. A further update will be provided in due course, he concludes.
The first stage of the program ran from late last year to early this year, a 65-day program in which Diamond Fields and IMDH recovered 47,298 carats of diamonds. It is unclear what the gems fetched at tender, but it was probably around $11-million (U.S.), about $230 (U.S.) per carat. What is clear is that Diamond Field's cut of the proceeds was $1.1-million (U.S.) under the terms of the agreement with IMDH, which bears all the costs of mining and gets to keep most of the revenue as a result.
Mr. van der Spuy offered no clue about why the second phase of mining was called off. An optimist might suggest that the first phase was so profitable that there is no need for further improvements, but in that case, it would be logical to expect that the co-venturers would be eager to get on with mining on a continuous basis. An alternate view could be that IMDH was unhappy with its cut of the sale given its expenses, which would explain why it wants Diamond Fields to bear some of the costs. The answers will have to await Mr. van der Spuy's update, but on Howe Street, "due course" rarely comes due.
There is little doubt that the profitability of the ML-111 project decreases away from the area tested in the first phase, which had centred on a higher-grade resource at ML-111 that held just over 250,000 carats. The entire ML-111 deposit had been calculated years ago to host 413,000 carats indicated and 430,000 carats inferred, but much of it sits at significantly lower grades than were mined in the first phase.
Diamond Fields knows all too well about marine mining at a loss. The company began mining its Namibian offshore concessions on its own dime starting in the late 1990s, but by the time it threw in the towel in 2008, it had racked up about $50-million in red ink. Mr. Boulle, the main backer of the project for the past quarter century, thought better of carrying on at that point, so the company sold its mining vessel and was ready to abandon the project -- at least until IMDH came along.
January Vandale and David Dewitt's halted cash shell, Fusion Gold Ltd. (FML.P: $0.165), has a definitive deal to acquire Australia-based Battery Mineral Resources Ltd. as its qualifying transaction. Fusion will first roll back its stock 2:5, leaving it with about 2.5 million shares outstanding, then it will issue over 116 million shares to Battery's shareholders. As well, Battery's largest shareholder, New York-based Weston Energy LLC, will receive over 12 million Fusion shares through a conversion of its $6.3-million (U.S.) bridge loan to Battery into shares.
While Battery Mineral calls Australia home, its exploration focus is in Canada, mainly at three cobalt projects in Northeastern Ontario and Quebec that it lumps into its Cobalt District project. The most advanced of the Canadian properties is McAra, on the Ontario side, where it completed about 6,000 metres of drilling in 2017 and 2018 and another 4,400 metres so far this year -- enough to have recently prepared a resource estimate. The company cheers the grade of the resource -- 1.27 per cent cobalt -- but says little else. Little wonder: There are just 72,000 tonnes indicated and 26,000 tonnes inferred, or barely 1,100 tonnes of cobalt. Battery Mineral Resources is also hunting cobalt in Nevada and California, as well as graphite in South Korea.
Shareholders of Anthony Milewski's -- and soon to be Vladimir Iorich's -- Cobalt 27 Capital Corp. (KBLT) have approved the takeover by Mr. Iorich's Pala Investments Ltd. Cobalt 27, down six cents to $4.42 on 1.27 million shares, will disappear, but a new company, Nickel 28 Capital Corp., will take its place. Cobalt 27's shareholders are to get $4 in cash per share and one share of Nickel 28 for each Cobalt 27 share they hold. (The Nickel 28 shares have a deemed value of $1.92 per share, although Cobalt 27's share price suggests otherwise.)
Pala is primarily after Cobalt 27's direct interest in cobalt. The company owns just over 2,900 tonnes of cobalt sitting in insured warehouses in Europe and the United States, worth about $100-million (U.S.) at last report. It also has a streaming agreement that will see it acquire about 850 tonnes of cobalt per year starting in 2021 and running for the life of the mine. Cobalt 27 paid Vale SA $300-million (U.S.) for the cobalt stream so some of the company's shareholders expressed displeasure with the Pala offer, at least initially.
Nickel 28 will acquire Cobalt 27's lesser assets, including an 8.56-per-cent interest in the producing Ramu nickel and cobalt mine in Papua-New Guinea, It also will get Cobalt 27's royalty portfolio, which includes the Turnagain nickel project in northwestern British Columbia and the Dumont nickel and cobalt project in Quebec, as well as an equity interest in Giga Metals Corp. (GIGA: $0.385). Giga owns the Turnagain project, which recently received a revised resource estimate of 1.07 billion tonnes measured and indicated at 0.22 per cent nickel and 0.013 per cent cobalt, with another 1.14 billion tonnes inferred at comparable grades.