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National Post "Diamond Find Sparks Investor Frenzy" and
Northern Miner "Diamonds North Proves Its Name"
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Diamond Find in Nunavut Sparks Trading Frenzy
Peter Koven
Financial Post Published: Tuesday, January 08, 2008
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A stunning diamond discovery in Canada's Far North sent investors into
a frenzy on Tuesday and put the spotlight on a sector that has been
largely overlooked during the commodity run of the past few years.
Vancouver-based junior Diamonds North Resources Ltd. said it found 550
diamonds in a small drill sample of 81.75 kilograms at its Amaruk
Project in Nunavut. That works out to a remarkable 6.7 diamonds per
kilogram, making it one of the best Canadian discoveries in years. The
stock soared 129% to close at $1.79, with nearly 13 million shares
changing hands.
"We would normally get excited by one stone per kilogram," chief
executive Mark Kolebaba said in an interview. "We were pretty shocked
by this result." He added that the multi-billion dollar Ekati and
Diavik mines had up to about three stones per kilo.
Mr. Kolebaba' phone is ringing "absolutely off the hook" as analysts
and investors try to determine the potential of the project, which is
located on the coast in the northern part of the province.
"There hasn't really been a discovery of a new [diamond] district like
this in a long time in Canada," said Gary Baschuk, an analyst at Clarus
Securities.
It comes on the heels of another promising find by Sanatana Diamonds
Inc. in December.
Mr. Kolebaba is hopeful that this discovery could bring some investor
attention back to diamonds, which have been overshadowed by the stellar
performance of gold and base metals.
As he sees it, the next generation of diamond projects are in the early
stages where they rarely generate the type of results that investors
are looking for. They have gravitated to formerly unsexy metals like
copper and nickel.
The number of diamond firms has also shrunk, and there was a
high-profile disaster last year: Tahera Diamond Corp. The company
opened its Jericho Mine in 2006 and is fighting off bankruptcy after a
number of well-documented problems.
"Five or six years ago, there were 100 or 200 diamond companies," Mr.
Kolebaba said. "There aren't very many now. You're down to a handful."
The Diamonds North discovery is in its very early stages, but the
company will have more details soon as it gets diamond results from 18
other kimberlite samples. It is also going to proceed with a drillcore
program, which will allow it to identify larger diamonds under the
ground and get a better sense of the project's potential. But that will
likely take several months.
"It takes a lot of time to develop a diamond mine," Mr. Baschuk said.
"You may find big stones, but if they're of low value, you're not going
to recover your money. In the case of Diamonds North, the indications
are that they're of very good quality."
John Kaiser, an analyst and junior mining specialist, said Diamonds
North is the most likely of any of the juniors to deliver a "major
diamond home run."
"If later results confirm that this is a field that has good
macro-grade pipes with quality diamonds, it could be another Ekati,
which was ultimately bought out for $2-billion," he said.
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The Northern Miner, 1/8/2008
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Diamonds North Proves its Name
While it's still a ways off Diamonds North Resources (DDN-V) is moving
closer to its goal of finding Canada's next big diamond mine by pulling
up over 500 diamonds from one kimberlite at its Amaruk property in
Nunavut.
The news set Diamonds North's share price alight as they shot up almost
100% or 77�, moving up to $1.55 on over 10 million shares traded.
In all 550 diamonds were pulled from 81.75 kg of rock at the Tuktu-1
kimberlite -- the third diamond rich kimberlite found within the 1,600
sq. km central block at Amaruk (the other two being the Char and Qavvik
kimberlites). The entire property is roughly 8,000 sq. km.
The breakdown of diamond recoveries were as follows: the 0.106 mm sieve
recovered 269 diamonds, the 0.15 mm sieve recovered 158 diamonds, the
0.212 mm recovered 73 diamonds, the 0.30 mm recovered 37 diamonds, the
0.425 mm recovered 11 mm and the 0.6 mm sieve recovered two diamonds.
The total amount of diamonds averages out to 7 diamonds per kilogram --
much higher than the 1 diamond per kilogram that is often used as a
benchmark.
Also positive is the quality of the diamonds with over 90% of the
diamonds recovered from the 0.30 mm mesh being white with the majority
being clear octahedral crystals forms, according to Diamonds North.
The company says it plans to do a bulk sample on the kimberlite in the
near future.
In all 22 kimberlites have been discovered on the property and results
from 18 of those are pending -- 8 of which are situated in the Tuktu
area.
The Tuktu-1 kimberlite sits roughly 15 km from the Qavvik kimberlite
which also lies on the property.
Back in March of 2007 Diamonds North announced that 515 diamonds were
recovered from 397 kg. of kimberlite there. The Char kimberlite yielded
178 diamonds from 159.35 kg. of rock and sits roughly 30 km from Tuktu.
Amaruk sits in the Pelly Bay diamond district of Nunavut.
Diamonds North has roughly $9.4 million in cash and marketable
securities available -- $7 million of which is cash.
Nancy Curry, a spokesperson for Diamonds North, says while the company
feels it has sufficient funds for its immediate exploration needs, the
exact dollar figure for the 2008 exploration budget won't be known
until results from the 18 kimberlites and the larger samples from Char
and Qavvik come in.
She says results from Qavvik should be in by the end of the month with
Char's results coming in roughly a month after that.
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Copyright (c) 2008 DIAMONDS NORTH RESOURCES LTD. (DDN) All rights
reserved. For more information visit our website at
http://www.diamondsnorth.com/ or send mailto:info@diamondsnorth.com
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