Why the diamond race is still wide open
Renowned diamond exploration analyst John Kaiser points out that the Saskatchewan government’s survey is an imprecise tool for finding all the kimberlite targets in the region.
“If indeed CanAlaska has snagged most of a new diamondiferous kimberlite field, a major exploration play will emerge,” he says in a recent edition of his investment newsletter, Kaiser Research Online.
“I use the word ‘most’ because not everybody believes that the 400-meter spacing of the geophysical grid flown by the SGS had sufficient resolution to highlight all kimberlite targets,” he adds. “A kimberlite pipe need not have a prominent magnetic signature that shows up on a 400-meter grid survey.”
This tantalising theory that CanAlasksa and De Beers likely haven’t zeroed-in on all of the best kimberlite targets in the region is what’s fuelling Canada’s latest diamond staking rush.
In fact, it’s exactly why Arctic Star has amassed a sizeable 40,832-hectare land position early in the race. And it’s why new life has already been breathed back into the company’s share price since the company announced its new venture late last week.
Next, Arctic Star will need to explore this summer for its own prospective kimberlite targets. And the company hopes to do that by using more precise geophysical surveying techniques than those used for the SGS survey.
No-one in this increasingly crowded hunt for new diamond riches is expected to drill any time soon. All eyes will therefore be on De Beers and CanAlaska, which could be drilling their joint-ventured project before the year’s end.
If any of their 75 or so kimberlite targets turn out to be the real deal, then the ensuing entourage effect on proximal players like Arctic Star promises to light up their share prices too.
Better still, De Beers or one or more of its rivals may yet beat very long odds to find kimberlites that are well-endowed with diamonds. In that case, diamond glory days reminiscent of the early 90s will be re-lived by a new generation of investors. And many of those who are early-stage, risk-friendly investors will enjoy the ride of lifetime.