This is potentially very significant. Here’s why: Many hidden sub-surface kimberlites have been found in the NWT by following trails of indicator minerals –- which are often found at or near surface, having been dragged long distances by ancient glaciers. Finding diamondiferous pipes this way is analogous to following a trail of crumbs to a loaf of bread.
If history repeats itself, hold on to your seats
This methodology is how the kimberlite pipes that constitute the Ekati and Diavik diamond mines were found in the NWT. These two mines alone have produced nearly $25 billion worth of glittering gems so far.
Ironically, they were discovered by other diamond exploration “juniors” that were early-stage entrants in Canada’s first ever diamond rush.
Their stories are the stuff of legend among speculative investors. For instance, Dia Met Minerals, which discovered the Ekati mine, ran from mere pennies a share in 1991 to over $67 the following year.
Next came another junior mining rags-to-riches story—Aber Resources. Its share price had a similarly meteoric run after the company discovered what was to become the Diavik mine.
Last but not least, Winspear Resources also struck the geological jackpot when it unearthed a diamond deposit that became the Snap Lake mine. Its shareholders also enjoyed a home-run return on their investments.
Now the likes of CanAlaska, Fjordland and Arctic Star hope to be the next generation of stellar performers with their own discoveries. But there’s a lot of work to be done by all of them, as well as their other rivals in the region, before anyone can even think about striking paydirt.
In CanAlaska’s case, it has agreed to give up as much as 70% ownership of its land holdings in return for De Beers’ big-dollar commitment to finding diamonds. But it’s a small price to pay if a multi-billion dollar discovery is in the offing.
As for Arctic Star, it’s betting that CanAlaska wasn’t able to blanket stake all of the best diamond-hunting ground for itself. In light of CanAlaska’s limited budget prior to De Beers’ involvement, it’s a good bet that Arctic Star may be right.