Issue link: http://resourceworld.uberflip.com/i/1058321
D E C E M B E R / J A N U A R Y 2 0 1 9 www.resourceworld.com 49 MINING 43-101 inferred resource of 26.1 million car- ats within 48 million tonnes down to 205 metres based on an average (+1 DTC) total diamond content of 53.6 carats per hundred tonnes (cpht). Additional blue-sky poten- tial is currently being assessed below 205 metres down to 300 metres within Q1-4. Blue sky potential also exists within 15 additional kimberlites located nearby that require further evaluation. Q1-4 has a surface exposure of 12.5 hectares, large by Canadian standards, and could be readily mined by open pit methods. Yellow coloured diamonds with a variety of secondary hues, ranging from greenish-yellow to orangey-yellow to pure yellow, make up, on average ~22% of the population by carat weight, and have the potential to add a considerable premium to the deposit value.* Q1-4 is located just 7 km from tidewa- ter of Hudson Bay, providing considerable advantage over the Lac de Gras mines, NWT, not only in terms of the cost of loca- tion access, but also because it resides in Nunavut, a jurisdiction with a settled land claim and a clear and defined permitting path. Agnico Eagle is currently develop- ing two gold deposits in the territory in preparation for the end of mining at Meadowbank. The 2019 spring exploration program for Naujaat currently includes further drilling at depth to raise the confidence level of the Q1-4 kimberlite between 205 and 300 metres for inclusion into a future updated NI 43-101 resource. North Arrow is currently working with the local com- munity to permit and fund construction of a community access road out to the area of the kimberlite to help facilitate extraction of ~10,000 tonnes of kimberlite to deter- mine a diamond value for Q1-4. The Mel Project is located 210 km north- east of Naujaat in east-central Melville Peninsula and was North Arrow's focus property for exploration in 2018. Work included surface till sampling, ground magnetic surveys and a drill program to follow-up on the prospecting discovery in 2017 of the diamondiferous ML8 kimber- lite. That discovery, although falling mostly under the market's radar, represented the second discovery of a brand new Canadian diamondiferous kimberlite field by the company – the first being made at the Pikoo Project in Saskatchewan in 2013. A 62.1-kg sample of Mel's ML8 kim- berlite taken from surface in August 2017 yielded 23 diamonds larger than 0.016-mm sieve size, including a single, colourless diamond larger than the 0.85-mm sieve size. Results are currently pending for an additional 224-kilogram ML8 surface sample submitted for micro-diamond and indicator mineral analyses in September 2018. 2018 drilling traced the ML8 kim- berlite for a strike length of 170 metres and discovered a new, narrow kimberlite south of ML8 called ML345. Importantly, the 2018 program included the collection of 447 till samples with the expectation of delineating new kimberlite targets. The company will advance the project with more airborne drone geo- physics combined with a systematic drill program in 2019. Mel, like Naujaat, is near tidewater and offers similar logistical juris- dictional features. The Loki property is located just south of Lac de Gras, the same region hosting the producing Ekati and Diavik diamond mines. New exploration targets in the shadow of these famous headframes continue to be generated and tested, but the project also has five known kimberlites discovered in the 1990s, highlighted by EG-05. Drilling in the spring of 2018 focussed partially on re-testing portions of EG-05 for size and diamond content, but also on testing new targets with indicator and geophysical support. The result was the discovery of the 345 kimberlite, the first new kimberlite discovery in the Lac de Gras region in over five years. Drill core samples for kimberlites 345 and EG-05 have been submitted for analyses with results pending. Further till sampling is planned for 2019 and future drilling is under review. Bordering the Loki Project to the east is the LDG Project, a JV with Dominion Diamond Corp., owners of 40% of Diavik and 89% of Ekati. A $2.88 million drill program, operated by Dominion, was conducted on the property in the spring and summer of 2018. Due to the proxim- ity of this project to the producing mines and kimberlite structural trends over the 125,000-hectare claim block, the property also holds promising prospects for new discoveries. North Arrow did not par- ticipate financially in the 2018 exploration program and now holds ~31% interest in the property. North Arrow's multiple project approach should allow for solid news flow to year end 2018 and into 2019. Continued assessment of their earlier stage projects offers high potential for new discoveries, especially at Mel where they've only just scratched the surface of a new diamond- iferous field. An update to the NI 43-101 resource for Naujaat's Q1-4 kimberlite is expected in summer 2019 while work com- mences on the community access trail that could bring efficiency and affordability to the required 10,000-tonne bulk sample to accurately determine the diamond value. *The economics of a diamond mine is based on inherent diamond qualities mainly size (carats), clarity or perfection (absence of imperfections) and colour (totally trans- parent). However, when diamonds have an exceptional colouration – pink, green, orange or yellow they fall into a different category called "fancy" stones and their price can rise several times the price of uncoloured stones and in some cases many times. Canadian mine site prices of dia- monds range from an average of US $65/ carat to as much as US $500/carat whereas pink diamonds from the Argyle mine in Australia can range from thousands to many thousands dollars per carat if valued separately from the rest of the population. The yellow/orange diamonds from kimber- lite Q1-4 at Naujaat have the potential to bring a value greater than the non-coloured diamonds and therefore could contribute to an enhanced value of the average price per carat of the deposit depending on stone quality and population size. n