Dec '08/Jan '09


Driven by diamonds, propelled by potash

By D. R. Eccles

Aggregate bulk sampling from the K6 kimberlite, Buffalo Head Hills field in north-central Alberta

Better known in the resources industry for its thriving oil sands, Alberta is also coming into its own as a province that attracts intrepid exploration companies. The numbers, over the past year, serve to bear this out. As of the end of August 2008, 9.9 million hectares had been staked for industrial and metallic minerals within Alberta. Approximately 3.1 million hectares of new 2008 staking occurred along the Alberta-Saskatchewan border in response to the accelerating global potash market. In addition, a resurgence of diamond activity in the Buffalo Head Hills field has resulted in the discovery of new diamondiferous kimberlites and the emergence of new operators in the area.

Digging for diamonds

The Buffalo Head Hills kimberlite field, which is located about 380 kilometres north of Edmonton, is the third-largest known district of significantly diamond-bearing kimberlites in Canada after Lac de Gras in the Northwest Territories and Fort à la Corne in Saskatchewan. New 2008 kimberlite discoveries bring the total number of known occurrences in the Buffalo Head Hills field to 41, of which 28 are diamondiferous.

During two separate 2008 drilling programs, Grizzly Diamonds Ltd. drilled a total of 12 drill holes totalling 2,270 metres in the Buffalo Head Hills kimberlite field. The drilling discovered three previously unknown kimberlite bodies (BE-01, BE-02 and BE-03), which represent the first kimberlites discovered in Alberta since 2003. Positive caustic fusion diamond results from the 2008 winter drill program yielded 54 diamonds greater than 0.075 mm in size. From a 56.6-kilogram sample of the BE-02 ore body, 26 diamonds greater than 0.106 mm in size were recovered. This finding spurred a larger campaign by Grizzly Diamonds, and a fall 2008 drill program collected an additional 563 kilograms of kimberlite material from BE-02. Grizzly Diamonds currently holds about three million acres of diamond properties throughout Alberta.

In 2007, Diamondex Resources Ltd. and Shore Gold Inc. purchased the Buffalo Head Hills diamond project from Stornoway Diamond Corporation (formerly Ashton Mining of Canada Inc.), who had previously defined 38 kimberlite bodies between 1997 and 2007 by spending approximately $30 million. From January to March 2008, Diamondex drill tested the K14, K252 and K6 kimberlite bodies with 41 drill holes totalling 6,818 metres, to allow for the identification of different kimberlite phases and micro diamond content.

The grid-based drill program represents a more thorough approach in comparison to the previous operators and it will be interesting to view the results, particularly because of Shore Gold’s knowledge of “Prairie-type” kimberlites, as they are the owners and operators of the Star diamond project and Fort à la Corne joint venture in Saskatchewan. Initial modelling has allowed the partners to identify six distinctive eruptive phases within the K14 Kimberlite and develop a preliminary three-dimensional model. Internal studies anticipate that each eruptive phase will have its own characteristic diamond grade. This modelling has already indicated that an additional east-west row of drill holes is required along the southern edge of the K14 grid to further delineate the kimberlite body.

In addition to this Diamondex/Shore Gold drill program, an aggregate sample of 369 tonnes of kimberlite was recovered from surface trenches at K14 and K6. A total of 139 stones were recovered from three separate trench samples from K14, yielding estimated diamond grades of between 7.4 and 8.8 carats per hundred tonnes. A single trench at K6 returned 85 diamonds and an estimated diamond grade of 7.0 carats per hundred tonnes. The largest stone recovered is a 1.07 carat stone from K6. The results of the bulk sample program need to be viewed in the context of new geological modelling as the trench samples represent the near-surface phase of complex multi-phased kimberlite such that the results are not applicable to the entire kimberlite body. Further grid drilling is planned by Diamondex/Shore Gold for the winter 2008-2009 season on the K91, BH225 and K5 kimberlites, as well as additional holes at the K6 and K14 bodies.

The potash push

With the global potash market experiencing rapid growth in the last decade due to the demand for food, fibre and feed, a new mineral play is developing in southeastern Alberta. Several companies, including APEX Geoscience Ltd., Cloudbreak Resources Ltd., Dahrouge Geological Consulting, Grizzly Diamonds Ltd., Landis Energy Corporation, Rich Resource Investments Ltd., Shear Minerals Ltd., Solitaire Minerals Corp. and several numbered Alberta Ltd. companies have staked metallic and industrial mineral permits on the Alberta-Saskatchewan border south of latitude 55 degrees.

The play is developing, in part, because of the results of a mid-1960s drill program completed by Bayfield Oil and Gas Ltd. and City Savings and Trust Co. that discovered potash-bearing beds within the uppermost portion of the Prairie Evaporite Formation at a depth of approximately 1,061 metres in well VCO#15. The depth is likely to be sufficient for solution mining, which accounts for most of the potash produced in Saskatchewan. The geological strata and basinal effects in the Vermilion, Alberta, area are similar to those of the potash-rich areas of Esterhazy, Saskatoon and Unity, Saskatchewan. This could well signify the dawn of a new era in potash production in Alberta.

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