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Msg  66646 of 67926  at  1/17/2020 7:09:49 PM  by


Diamond & Specialty Minerals Summary - 17th

Diamond & Specialty Minerals Summary for Jan. 17, 2020

2020-01-17 17:36 ET - Market Summary

by Will Purcell

The diamond and specialty minerals stocks box score on Thursday was a pleasant 91-64-155 as the TSX Venture Exchange gained one point to 584. Ken MacNeill and George Read's Star Diamond Corp. (DIAM) remains silent about the plans this year at the Falcon project in central Saskatchewan with its presumed joint venture partner, Rio Tinto, but investors continue to buy -- and sell -- the company' stock enthusiastically. Today, Star had an up day at first, but ended down one-half cent to 47 cents on 694,000 shares. The stock broke free of its 20-cent perch in mid-November and has been as high as 53 cents earlier this month, despite the lack of details.

Grenville Thomas and Ken Armstrong's North Arrow Minerals Inc. (NAR), up one cent to six cents on 52,000 shares, says that its joint venture partner on the LDG project has recovered diamonds from Anchor, the new kimberlite found last July on a big property covering much of the area south of Lac de Gras. About 388 kilograms of kimberlite, obtained from six of seven holes drilled into the target, produced 232 microdiamonds. Unfortunately, none of the gems were large enough to sit on a 0.3-millimetre sieve.

Mr. Armstrong, president and chief executive officer, says that the kimberlite was a dark grey to black, fine-grained, macrocryst-poor, monticellite to carbonate coherent -- to geologists, one hopes -- kimberlite. That jargon roughly translates as "better luck next time." In that regard, Dominion and North Arrow are testing the material for indicator minerals, presumably hoping that the geochemical encouragement found in nearby till sampling programs did not come from Anchor. That would leave the possibility open that better pipes are awaiting discovery.

Dominion, which acquired the 150,000-hectare project a decade ago, intends to carry on this year at LDG and it has set a $3.5-million exploration budget for LDG, with work that will include at least 2,000 metres of drilling at new targets. The program is expected to get under way in late February or early March with preliminary geophysics, followed by drilling in late spring and summer.

That effort will go ahead without any contribution from North Arrow, once again. The company at one time had a 45-per-cent interest in the project but it stopped meeting Dominion's cash calls years ago so that it could conserve cash for its more advanced projects. Mr. Armstrong and Mr. Thomas, chairman, say that North Arrow will not contribute to this year's budget either, so by the time the work is complete North Arrow's interest is expected to drop to 18 per cent.

It may not be a bad decision. While the area south of Lac de Gras and north of the Snap Lake and Gahcho Kue mines saw plenty of work over the past 30 years, and while till sampling produced considerable geochemical promise -- some of the best ever, if the original hype was to be believed -- only a few kimberlites turned up and they were at best barely diamondiferous. (In that regard, Anchor is in good company.)

One of those finds, the No. 468 kimberlite, turned up in 2018 on North Arrow's Loki project, just west of LDG. The company processed 41 kilograms of kimberlite from the discovery, but the rock produced just a single tiny microdiamond. North Arrow also retested a second pipe on Loki, one that had been discovered over 20 years ago but was promptly abandoned. About 165 kilograms of kimberlite produced 28 microdiamonds, but like Anchor, they were all tiny. Nevertheless, North Arrow says that more work is planned at Loki this spring.

Adrian Hobkirk's NRG Metals Inc. (NGZ) closed unchanged at 7.5 cents on 331,000 shares. NRG slid three cents to 7.5 cents on 674,000 shares Thursday, following word that its sale of the Hombre Muerto North lithium project in Argentina may be dead. A Jan. 15 deadline passed without the buyer, Alberdi Energy, having reached a formal agreement with NRG. The tentative arrangement would have had Alberdi make NRG $18-million (U.S.) in staged payments, and in the interim, Mr. Hobkirk, NRG's president and CEO, had the opportunity to shop for a better deal.

Unfortunately, not only was there no better deal, it now appears that there is no deal at all. This leaves Mr. Hobkirk scrambling to make the rather hefty payments required for NRG to complete its own option earn-in on Hombre Muerto North. To help raise the cash, he intends to roll back the company's stock on a 1:6 basis in the hope of attracting new backers. Mr. Hobkirk still holds out hope for a deal, saying that he remains in discussions with Alberdi and with "others" regarding the sale.

NRG pushed the project to the dream sheet stage last year, proposing a $93-million (U.S.) operation that would produce 5,000 tonnes of lithium carbonate annually for 30 years. The bottom line was encouraging, a discounted net present value of $217-million (U.S.) after taxes, but just six months after completing the study, Mr. Hobkirk decided to sell off Hombre Muerto North for less than 10 per cent of that calculated value. (Even so, it was a great deal compared with NRG's shoestring market capitalization.)

Brian Findlay's Dajin Resources Corp. (DJI) will become Dajin Lithium Corp. on Monday. (Dajin added one-half cent to 2.5 cents on 245,000 shares today, its last session under its old name.) Mr. Findlay, president and CEO, says that "water rights have been secured" at its Teels Marsh Valley lithium brine project in Nevada and all drill permits have been received. The passive tense is a promoter's friend, as it masks old news: Dajin applied for the water rights in 2015 and secured them the following year, while the drilling permits appear to have been in place for a few years as well. Mr. Finlay does promise drilling at Teels Marsh "this year," pointing out that access roads and drill pads are now in place.

Mr. Findlay also touts the Salinas Grandes salar project in Argentina as a second priority for the lithium-focused Dajin, pointing to assay results that are comparatively hot off the press, being less than two years old. Those samples ranged as high as 1,353 milligrams per litre, enough that "additional exploration of the concession is expected to proceed later this year."

Tom Drivas's Appia Energy Corp. (API), down one cent to 23 cents on 23,000 shares, has a plan to address the security of the heavy rare earth element supply chain in the United States. Naturally, he thinks that secure supply can come from Appia's Alces Lake deposit in Northern Saskatchewan. President Trump will have to be patient about weaning his country off the Chinese supply, as Alces Lake is still an early-stage project. Nevertheless, it has been producing some eye-popping grades recently, including a 15.55-metre hit that averaged 16.06 per cent total rare earth oxides.

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