SOMBA K'E/YELLOWKNIFE
Junior exploration company Kennady Diamonds has discovered another promising kimberlite at its Kennady North project located 280 kilometres northeast of Yellowknife.

Kennady Diamonds announced last week it had discovered another promising kimberlite at its Faraday site near the Gahcho Kue Diamond Mine. - NNSL file photo

Occurring vertically in the earth's crust, kimberlite pipes are the result of underground volcanic activity and are the primary source of mined diamonds.

The area is adjacent to De Beers' Gahcho Kue diamond mine and has been the focus of exploration efforts since the early '90s when the Kelvin and Faraday kimberlites were discovered by Mountain Province Diamonds. The kimberlite body is located in the Faraday cluster, 80 metres southwest of the other 2015 discoveries and is the fourth kimberlite body to be uncovered by the company during three years of exploration. With average recovered diamond grades ranging from two to 2.7 carats, Kennady CEO Patrick Evans said the results are promising and show favourability for a mining operation.

"Methodical exploration over the Kelvin-Faraday kimberlite corridor has increased our confidence in the potential for the discovery of further kimberlite bodies within the corridor," he said in a March 17 news release.

The bulk sampling program at the Kelvin North lobe is also progressing well with 13 of the 26 planned drill holes completed and over 300 tonnes of kimberlite recovered. Kennady is hoping to recover 500 tonnes or 1,000 carats in total from the program which will be used to develop the company's business strategy and resource value.

Results from a 2015 diamond recovery of 0.518 tonnes at the Faraday 1 kimberlite released in February revealed a total commercial sample grade of 4.65 carats per tonne, including a 1.43 carat off-white, transparent octahedron with no inclusions. A subsequent 6.4 tonnes of kimberlite taken from Faraday 2 returned a sample grade of 3.04 carats per tonne. This is comparable or higher than other diamond-producing mines in the area.

"The commercial sample grade of over three carats per tonne confirms that the Faraday 2 kimberlite has the potential to host a high grade diamond resource," Evans said in a February news release.

He said they plan to keep one of the drill rigs on site this year after the ice road is closed so 2017 exploration programs can start before the ice road opens.

"This will . provide us with the opportunity to commence the 2017 Faraday bulk sampling program well ahead of the opening of the ice road next year," he said.

Earlier this year, the company was granted an amendment to its land use permit and water licence which would allow it to expand the project and hire a larger workforce of up to 150 people.

The winter exploration program started in early January with crews arriving at the site Jan. 15. Over the past year diamond grade per tonne has consistently returned high grade results and a maiden resource estimate is anticipated sometime in the next couple of months.

Last fall the company announced it had secured enough funding to take exploration through to 2017, at which time it is expecting to make a decision about whether to open a mine. A $48 million private placement was obtained solely through the contribution of private investors which will be used for drilling, bulk sampling, evaluation, preliminary economic assessment, feasibility studies and permitting. If a decision is made in 2017 to build a mine, it could be in production by 2020.

The Kennady North project consists of 16 mineral leases and 58 mineral claims totaling 61,000 hectares.