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 early 2000s.

The plan

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.

The 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 encouragement

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.