November 2008

Spreading the bets

Stornoway is getting set to take northern diamond production to the next level

By M. Kerawala

Stornoway CEO Eira Thomas examines a drillcore

The laws of probability are clear — the more stones one looks under, the likelier one is to find what one seeks. Understanding this, Stornoway Diamond Corporation has developed a highly diversified portfolio that includes 13 properties, two each in Quebec and Alberta, three in Northwest Territories and six in Nunavut.

The Foxtrot property in Quebec is on track to development. Another Quebec/Ontario property and three Nunavut holdings, Aviat, Churchill and Quilalugaq, are in the advanced exploration stage. The remaining properties are all grassroots explorations, strategic to ensuring that the company’s growth strategy is fulfilled through promising diamond projects that will fill the “pipeline” from grassroots to development.

Northern exposure

Excluding the Foxtrot property, which could become Quebec’s first diamond mine, Stornoway’s three most important assets are all in Nunavut. Of these, the most advanced is the Aviat Project on the Melville Peninsula. Stornoway has a 90 per cent interest in the 476,000-acre project and holds all diamond marketing rights. Twelve kimberlites have been identified at Aviat since 2002. SRK Consulting  conducted a conceptual resource study of the Eastern Sheet Complex (ESC), a stacked sheet sequence of kimberlites, indicating the potential for 24.1 to 40.3 million carats of diamonds in 12.4 to 16.0 million tonnes of kimberlite. A minibulk sample was extracted from ES 1, the most significant ore body, for additional insight into the grade, diamond value and overall economic potential. Results are due at the end of 2008. Drilling in 2008 pushed the known extent of the ES 1 from 125 to 250 hectares and led to the discovery of a new kimberlite sheet within the ESC.  In all, 23 holes, totalling 3,225 metres, were drilled in 2008.

Located 10 kilometres north of Repulse Bay, the 1.04-million-acre Quilalugaq project hosts 17 kimberlites, including the largest known kimberlite in the eastern Arctic. This giant 14-hectare Q1-4 Complex has a calculated sample grade of 0.27 carats per tonne. In September 2008, a new kimberlite discovery was also announced, taking the known total up to 18.

The 1.3-million-acre Churchill Project abuts Hudson Bay between Rankin Inlet and Chesterfield Inlet in the Kivalliq region. Discovered in 2003 by Stornoway, Shear Minerals and BHP Billiton, the project is relatively well-connected, with barge and rail access facilitating exploration. Previous kimberlitic discoveries nearby suggest that multiple kimberlitic sources exist at and around the site. To date, 88 have been discovered. These include the Kahuna kimberlite, a 4.5-kilometre-long dyke with a diamond content of 104 carats per hundred tonnes. The kimberlites lie under very little overburden and are mostly land based. On September 24, 2008, Stornoway announced the discovery of nine new kimberlites, two of which are likely highly diamondiferous.

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