NORTHWEST TERRITORIES
Kimberlites may be shaped like carrots, but the price of Kennady Diamonds looks more like a roller coaster.

Five days of trading activity for Kennady Diamonds (TSX-V:KDI) ending on March 26. The stock fell as much as 8.41 per cent, but jumped 5.77 per cent before the closing bell on Thursday.

Shares of the diamond exploration company (TSX-V:KDI) were extremely volatile this past week, especially after Kennady announced it had found the igneous rock known for sometimes containing diamonds in drill holes at its Kennady North project.

On Wednesday, the stock fell from $3.40 to close at $3.12, a drop of 8.24 per cent and its sharpest decline for that week's trading. After dipping to a low of $3.02 on Thursday morning, the price of shares rose sharply by 18 cents, to close at $3.30, a jump of 5.77 per cent. However, the stock has still fallen 15.17 per cent from its 30-day high of $3.89 and is down 28.26 per cent year to date.

However, on March 24, Kennady announced in a written statement the company had recovered approximately 1 tonne of kimberlite from Faraday. Processing of the resulting core samples yielded 4.76 carats greater than 0.85 mm, with a resultant "commercial" sample grade of 4.54 carats per tonne. Approximately 300 tonnes of the bulk sampling from the Kelvin kimberlite has already been recovered.

President and CEO Patrick Evans called it an exciting development, noting the company plans to keep testing the continuity and is drilling further to the northwest and southeast of the discovery holes.

Senior mining analyst Matthew O'Keefe also pointed to Kennady recently closing a round of financing, which tends to lead to some volatility, as well as the high concentration of its small number of shares among a limited number of investors.

"That can move stocks one way or another rather abruptly," said the vice-president of Dundee Capital Markets, who estimated Thursday's total volume of 37,440 shares at less than $150,000. "It can come back just as easily as it's come off, it doesn't take a lot of shares to move it up."

O'Keefe also pointed to the share prices of other diamond explorers, such as Lucara, Mountain Province and Stornaway, facing similar downward pressures over the last month. The Dundee analyst called this the "hard work phase" for the company, "The upside is going to be harder at this point, to show something exciting at this stage," he said, noting it will take most of 2015 for Kennady to prepare a resource statement. "It tends to be an expensive and not always exciting time."

Even after this week's volatility, O'Keefe remained confident in the Kennady North project, which is comprised of thirteen leases and claims located in NWT immediately north and west of the four leases controlled by the Gahcho Kue joint venture between De Beers Canada and Mountain Province Diamonds. "We think it's a very good project, there's just a lot of work to do ahead of them, which is less exciting."