VANCOUVER, British Columbia, Sept. 18, 2014 (GLOBE NEWSWIRE) -- A bulk sample from the largest diamondiferous kimberlite pipe in the eastern Canadian Arctic is scheduled to arrive in Montreal next week. Diamond processing will be conducted throughout the fall before the final parcel makes its way to the diamond capital of the world, Antwerp, Belgium, for an official diamond valuation.
The sample contains over 1,500 tonnes of ore from a 12.5-hectare kimberlite referred to as Q1-4. The kimberlite is one of 8 pipes already discovered at North Arrow Minerals' (TSX-V: NAR ) and Stornoway Diamonds' Qilalugaq project, one of the most anticipated diamond exploration projects in the industry.
Qilalugaq, meaning "beluga whale" in Inuktitut, holds 7,000 hectares of contiguous mineral claims in northeastern Nunavut, and the Q1-4 pipe in itself already has a considerable mineral resource of 48.8 million tonnes equating to an inferred resource of over 25 million carats of diamonds.
The pending diamond valuation is perhaps the most significant catalyst since BHP Billiton originally staked the property in 2001. An official diamond valuation will accompany official tonnage and grade estimates providing the final data point needed to extrapolate the potential economic value of Q1-4 and the Qilalugaq project as a whole.
Qilalugaq has flown under the radar as described by North Arrow CEO Ken Armstrong in an exclusive interview with the Financial Press , "Qilalugaq has never really been anyone's primary project so it hasn't had the profile it might otherwise have had, if say a junior company had made the initial discovery." Armstrong added, "Q1-4 is rather unique in terms of its size and location near the ocean."
Q1-4 is estimated to hold 53 carats per hundred-tonnes, meaning a report from Antwerp indicating an average diamond value of $200 per carat would value the Q1-4 resource at over $5 billion; $400 per carat would value the resource at over $10 billion. Not a bad potential return for North Arrow's $3.7 million investment in the mini-bulk sample that also secures the company an 80% stake in the project from joint-venture partner Stornoway.
Economically mined Canadian diamonds tend to be valued at $100 to $500 per carat, so a $200-400 valuation is certainly not out of the question. It's worth noting that a unique occurrence of fancy colored yellow diamonds at Q1-4, recovered in earlier stage sampling, could aid in boosting Q1-4's valuation towards the higher end of the above range.
While Qilalugaq is considered one of the Canadian diamond industry's primary and most important projects, North Arrow (80%) and partner Stornoway (20%) are also aggressively progressing Canada's newest diamond discovery, the Pikoo project.
In July 2013 North Arrow discovered kimberlite after successfully hitting 9 out of 10 drill targets on the 33,000-hectare eastern-central Saskatchewan property. After the discovery, North Arrow stock subsequently rallied 40%.
The primary kimberlite discovered, referred to as PK 150, has since shown very encouraging signs with a 209 kilogram sample returning 745 diamonds, 23 diamonds of which were greater than 0.85 millimeters and considered "commercial" sized diamonds.
North Arrow is currently processing over 440 Pikoo till samples that were collected over the summer. At the time of writing, 40% of the till sample results had been received by the Company. Reportedly, new and distinct trains of kimberlite indicator minerals are emerging from the results which suggest Pikoo could host multiple diamond bearing kimberlites similar to PK 150, which could greatly increase the possible economic viability of the project.
Recently financed North Arrow has plans for a 3,000 meter, $1 million-plus, drill program at Pikoo this coming winter.
The Canadian diamond industry has been buzzing with activity this year as Stornoway successfully financed its $900 million Renard mine in Quebec, and Mountain Province Diamonds progresses construction at its mine, Gahcho Kué, which is estimated to eventually be the 7th largest diamond mine in the world. In addition, high-end diamond cutter and polisher Deepak International finalized a deal to purchase a polishing plant in Yellowknife along with the exclusive rights to the Polar Bear brand, a bid of confidence in the secular demand for Canadian diamonds.
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