Kennady traces high-grade kimberlite
Mine hoped for by 2020 if deposit turns out to be economically viable
Stewart Burnett
Northern News Services
Monday, March 9, 2015
NORTHWEST TERRITORIES
Two drill holes from Kennady Diamonds on its Kelvin property have shown promising results for the future potential of a diamond mine.
Patrick Evans is CEO of both Kennady Diamonds, which is exploring for a new diamond mine, and Mountain Province Diamonds, which is part owner with De Beers on the Gahcho Kué mine. Kennady Diamonds is finding high-grade kimberlite in an area near the Gahcho Kué mine site. - photo courtesy of Mountain Province Diamonds |
The company drilled through 54.4 metres and 80 metres of kimberlite in the last month, confirming continuity of the Kelvin kimberlite outcrop.
"We've been tracing Kelvin over the last two years," said Kennady Diamonds CEO Patrick Evans.
Evans thought he lost the kimberlite outcrop when it dipped toward the North, but the company intercepted it again in its recent drilling, a positive sign of its size.
There are three elements to determine whether a diamond mine is feasible: tonnage, grade and value.
Drilling at Kelvin is specifically to find out what level of kimberlite
tonnage the company has.
"So far we expect to have between 10 and 13 million tonnes," said Evans.
Grade means the frequency of diamonds within the kimberlite and Kelvin is showing positive results there as well.
"Of the diamonds we've recovered, we're estimating we have a grade of between two to 2.5 carats per tonne," said Evans.
That's a higher grade than the Gahcho Kué soon-to-be diamond mine located about five kilometres to the south. Gahcho Kué shows about 1.5 carats per tonne.
Kennady is trying to recover up to 700 tonnes of kimberlite from Kelvin to give the company a bulk sample that would be representative of the diamond population in the location. The sample would be used to find out what the diamond value is and enable the company to generate a revenue estimate.
"The combination of those three things – tonnes, which we've got; grade, which we've got; and value, which we're determining – will determine whether we have a diamond mine or not," said Evans.
Kennady will be finishing the bulk sample in the next couple of months. After that, the sample will be processed to recover the diamonds and Kennady hopes to have a diamond valuation sometime around October this year.
With a valuation, Kennady will publish its first resource estimate, which will provide the basis for the company to make a preliminary economic assessment likely in 2016.
"If we achieve what we expect it will be a pretty robust return then we'll go to a feasibility study, which will take about 12 months," explained Evans.
Concurrently with that, Kennady will start permitting the mine and proceed to develop it.
"It's our hope that, provided we have an economic deposit, we should be in production by 2020."
For now, the company is moving its core drill rig to its Faraday kimberlite deposit at Faraday Lake, where drilling last winter resulted in a high-grade find.
"Our hope is that we will be successful and find sufficient tonnage at Faraday, perhaps as much as we found at Kelvin," said Evans.
He needs a larger sample to determine if the high-grade kimberlite found last winter is in a large quantity.
"We would hope that at Faraday we'll define the tonnage, grade and then eventually the value of the diamonds to support a bigger mine than we were planning with just Kelvin alone."
Kennady Diamonds controls 100 per cent of its
Kennady North diamond project located immediately to the north, west and south of the Gahcho Kué diamond mine.
