Resource World Magazine

18 www.resourceworld.com a p r i l / m a y 2 0 1 5 i n s i g h t s & i n v e s t m e n t s B a r r y M u i r R ecently we have started to see a reawakening of interest in dia- mond exploration and discovery. There is growing demand from China, India and the US at a time when some of the world's largest sources of diamonds are becoming depleted. The December, 2014 Bain study expects an average 4% to 5% compound annual growth in rough diamond demand to 2024. The demand and price curves for diamonds aren't affected by the Fed like gold is. Canadian diamonds have held a prestige for quality and ethical production since first discovered in the North West Territories in the 90's by geologist Chuck Fipke. That original discovery in the Lac De Gras region ultimately became the Ekati Mine, Canada's first diamond mine. Since then, Canada has become the third largest diamond producing country in the world by value. Other producing mines in Canada are the Diavik Mine and Snap Lake Mine both near Yellowknife and the Victor Mine in Northern Ontario. On line to commence production in 2016 is De Beers/ Mountain Province [MPV-TSX] Gahcho Kuo also in the Lac De Gras region and stornoway Diamond's [SWY-TSX] Renard Project in Québec in 2017. Although the North West Territories is the first place that comes to mind when talking Canadian diamonds, Saskatchewan dia- mond exploration is starting to regain interest now with two areas recently making strides: shore Gold's [SGF-TSX] Star-Orion Project 60 km east of Prince Albert and a further 200 km to the northeast, North Arrow Minerals [NAR-TSXV] diamond discovery in the Pikoo Diamond Camp. While many of Canada's promising diamond claims are in remote areas, Saskatchewan offers nearby infrastruc- ture with road access 365 days a year, a future power grid and a large pool of human resources in proximity to the projects. Shore Gold has an approved mine with a completed Environmental Impact Statement (EIS) and Preliminary Economic Assessment (PEA). A positive feasibility study gives them 34.4 million carats in the probable category at US $242 per carat with 9.1 million carats in the inferred category. The Star-Orion's cur- rent Net Present Value (NPR) is $2.1 billion with a before tax internal rate of return (IRR) of 16%. The current projected life of the mine is 20 years with potential for many more beyond that. Looking back at some of Shore Gold's many milestones since the Star property was staked in 1995 shows us just how much money, time and effort is required to bring a property like this to fruition. In 2005, over $230 million was raised through private placements and in October of 2006 the company assembled a 3D model that defined 276 million tonnes of kimberlite. In 2007, Shore recovered the largest diamonds in Saskatchewan, as large as 49.5 carats, enabling the company to raise an additional $30 mil- lion in flow-through financing. The stock at the time was trading above $8.00 a share. In 2008 and 2009, two separate NI 43-101 mineral resource estimates were completed on both the Star and Orion South properties with a $27.5 million financing completed in October of 2009. In December of 2014 the company received a Positive Environmental Assessment decision from the Federal Minister of Environment. Today, shares of Shore Gold trade at $0.22 giving the com- pany a current market capitalization of about $55 million. This past December the company raised $5.5 million with all proceeds going into a drill program being mobilized this April with an objective of bringing inferred carats to indicated carats. Results are expected in early summer. Half-way between La Ronge, SK and Flin Flon, MB is the Pikoo Project located within 10 km of SK Hwy 911. The property is owned 80% by North Arrow Minerals and 20% by Stornoway Diamond Corp. Here the geology is similar to that of the NWT with less over burden than Shore's Star-Orion property. The Pikoo claims were staked in 2011 after regional geological sampling uncovered kimberlite indicator minerals (KIM). Further exploration including surficial till sampling, airborne geophysical surveys, prospecting and geophysical anomaly checking showed a potential for kimber- lite clusters within a 15 km by 20 km area covered by the claims. As a result, two distinct areas were brought into focus, the North and South Pikoo and in July, 2013 a 2,000-metre drill program resulted Saskatchewan Diamonds Sparkle Pikoo diamond discovery prompts staking rush Shielding himself from the helicopter downwash, North Arrow geologist, Arthur Kidston, gets picked up lakeside with a day's till samples, July 2014, at North Arrow's Pikoo Diamond Project in Saskatchewan. Photo courtesy North Arrow Minerals Inc.

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