Kennady raises $4 million
Diamond company optimistic about future
Karen K. Ho
Northern News Services
Friday, August 21, 2015
Junior diamond company Kennady Diamonds is doing a lot right now. The company recently raised $4 million, is awaiting results from the Saskatchewan about a bulk sample, having diamonds evaluated in Antwerp, Belgium, and is preparing to release a resource statement about one of its sites later this year.
A recent aerial shot of the Gahcho Kue diamond mine project construction site approximately 300 kilometres northeast of Yellowknife. Kennady Diamonds' Kennady North project is adjacent to the site. The company recently raised $4 million. - photo courtesy Mountain Province Diamonds
But president and chief executive officer Patrick Evans said the money raised through the sale of non-brokered common shares was crucial to everything the company is doing right now at its Kennady North project.
"If we weren't able to raise it we would have to close down shop," Evans told News/North. "No exaggeration. If we didn't raise the $4 million we would have had to stop all the drilling, had to tell the Saskatchewan Research Council to stop the processing and we wouldn't be doing the valuation. It's vitally important."
Kennady North is a junior diamond project that is adjacent to the Gahcho Kue diamond mine. It is currently being jointly built by De Beers Canada and Mountain Province Diamonds.
Evans said the money will also cover the company's operating expenses until October, when it likely plans to raise an additional $5 to $8 million to fund Kennady's costs until the end of the year.
The $4 million amount closed within two weeks. Evans said he wasn't surprised, calling it "dead easy" and noting the company had recently turned down a bought-deal of $10 million.
"All of that was bought by existing shareholders of the company," he told News/North. "We've done that deliberately because there's always the risk that valuations may come in below expectations."
Evans said the results of the company's 436-tonne bulk sample from Kelvin are expected to be received within the next week or two.
The company has already spent about $45 million in the last three years on previous drilling activities at Kennady North.
Evans said the company has strong guidance on its tonnage (12 to 15 million tonnes) and grade of diamonds found per tonne (2 to 2.5 carats per tonne), the last component is assessing diamond value.
"We haven't recovered a large enough parcel of diamonds for anyone to do a sensible valuation," he said.
Evans said the expectation is approximately 800 to 900 carats worth of diamonds.
"The really exciting thing is we're going to get the report from the Saskatchewan Research Council soon telling us how much we've recovered and the size of the diamonds," he said. "And size counts."
Evans said the report from Antwerp is also expected to be completed by the end of September or early October.
As for the near future, Evans said Kennady has started to drill another site of kimberlite, carrot-shaped rock at that sometimes contains diamonds, named MZ.