January 2, 2008
Grizzly Diamonds Ltd - COMPANY
COMPANY UPDATE - Grizzly Expands Buffalo Hunt
2007-12-28 17:28 ET - Street Wire
by Will Purcell
Brian Testo's Grizzly Diamonds
Ltd. is finalizing drill plans for its key diamond properties in the
Buffalo Hills region of Northern Alberta. The company has several other
projects on the go, but it intends to spend the bulk of the cash obtained
in a recent multimillion-dollar financing to drill several intriguing
anomalies near significantly diamondiferous pipes found by Ashton Mining of
Canada Inc. during the heyday of the Alberta play in the late 1990s and
A few other active diamond explorers are hunting new kimberlites in
Northern Alberta as well, but Mr. Testo's junior company should rank near
the top of the list of big spenders. Only Diamondex Resources Ltd. and
Shore Gold Inc., which jointly control the old Ashton project, are likely
to outspend Grizzly next year.
Peers-based welder and pipefitter said Grizzly already had one drilled
lined up for certain and he expects to have a second rig available when the
drilling starts in mid-January. Officially, Grizzly would like to test at
least a dozen targets, but with two rigs and good weather, the company
could poke holes into as many as 20 geophysical anomalies.
The Buffalo Hills district is about 85 kilometres northeast of Peace River
and overnight lows are occasionally dipping below minus 30 C. The coldest
weather typically occurs when Grizzly plans to start its drilling, but the
real weather issue will be the warmer spring days. Although the weather can
be quite variable each year, Ashton Mining of Canada typically relied on
mid-March as the time when it had to wrap up its winter work. As a result,
Grizzly should have two good months of drilling before the roads and trails
turn to mud.
Mr. Testo said that Grizzly completed what turned out to be a $2.76-million
private placement. The flow-through shares sold for $1.10 each and the
company plans to spend $1.7-million of that on the Alberta gem hunt, with
most of the money going to the drilling in the Buffalo Hills region.
The Buffalo Hills region should attract new market interest, with Shore and
Diamondex busy on ground in the immediate vicinity of some of Grizzly's
anomalies. As well, Mr. Testo's rivals inherited several hundred tonnes of
kimberlite that the previous operator dug up last winter from the K-14 and
K-6 pipes. That rock has been growing cobwebs in Vancouver, but Shore will
be processing it at its Saskatchewan plant early next year.
Good grades and some valuable gems could revive the Buffalo Hills play in a
Fort a la Corne context. Ashton's original results lend support for such a
model, as some of the pipes are large and the original mini-bulk grades are
comparable or better than that delivered by mini-bulk tests of the Fort a
la Corne bodies.
For instance, the largest of the Buffalo Hills tests occurred at K-14,
where Ashton processed 524 tonnes of kimberlite and recovered 64.25 carats
of diamonds, for a grade of about 0.12 carat per tonne. The haul included
just one gem that weighed over one carat, but two more came close and there
may have been significant diamond breakage because of the reverse
circulation drills used to collect the samples.
Other pipes produced comparable grades. The K-91 body managed 4.56 carats
from 35.87 tonnes of kimberlite, for a grade of 0.127 carat per tonne. The
grade was lower from a 20-tonne test of K-6, at just 0.072 carat per tonne,
but a 0.76- carat yellow diamond was a particularly valuable find. The best
pipe in the region had a grade of 0.55 carat per tonne, but it was quite
small, covering less than two hectares. Those numbers would help draw
interest to any Grizzly drill success.
Grizzly closed down six cents to 98 cents Thursday on 2,800 shares.
Grizzly Diamonds Web Site
Grizzly Diamonds IR HUB