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Diamond report from New Nadina needs some polish

Posted by David

Last Monday, New Nadina Explorations Ltd. (TSX.V-NNA), a diamond explorer, published results from a microdiamond assay of core from the optimistically named “Bling” kimberlite in the Lac De Gras region of the Northwest Territories. The Lac De Gras Region was the site of the first significant diamond discoveries in Canada, and is home to the Ekati (BHP Billiton) and Diavik (Rio Tinto and Harry Winston) diamond mines. The Bling kimberlite is located on the Monument Diamond Project in the Blue Pearl Cluster, and is the sixth such body to be discovered there. NNA owns 57.49% of the project. Chris Jennings, famous for his diamond finds in southern Africa and somewhat mixed results Canada, owns 22.11% along with his wife, Jeanne. Archon Minerals Ltd. (TSX.V-ACS), run by Stewart Blusson, co-discoverer of the Ekati Mine with Chuck Fipke, owns the remaining 20.4%.


Petrologically, the Bling kimberlite is pyroclastic (diatreme/crater) facies kimberlite, i.e. post-eruption/non-magmatic. The kimberlite was intersected during drilling of a 45º angled core hole from 171 m to 203 m. It contains abundant coarse olivine, pyrope, and chromium-rich diopside, minerals strongly associated with the mantle. But are they associated with diamonds in this case? The large size of many of crystals, up to 2 cm in diameter, indicates that they are possibly not fragments of diamondiferous peridotite xenoliths brought up by the kimberlite, but rather they are related to the kimberlite. Such grains are often termed megacrysts. Ergo, this information does not say much about potential for diamond abundance or lack thereof, although chemical analysis of said megacrysts could (but that is for another article).


However, upon later correspondence with Mr. Kivi, the P.Geo. in charge of the project,  it was stated that these large crystals are likely not to be megacrysts as stated above, but rather that they are likely to be from deep mantle origins, ~200 km depth. If this is the cases, then Bling would have sampled a very large column of mantle in the diamond stability field, greatly increasing the chances of entraining diamonds upon the kimberlites ascent. It still remains, however, that chemical analysis of these grains is required to prove things either way.


What is interesting, are the 23 mantle xenoliths of lherzolite and harzburgite, incorrectly spelt in the report as “lhertzolite” and “hartzburgite”, respectively. Harzburgite (G10 garnet association), and to a lesser extent lherzolite (G9 garnet association), are the major parent rocks that diamond forms in, prior to ascent to the surface in a kimberlite (most cases) or lamproite (rare cases, e.g. Argyle in Australia). The presence of potential parent rocks for diamonds as xenoliths in a kimberlite is a good indicator for diamonds.


The best indicator for diamond in a kimberlite is diamond itself. The concentration of diamond is so low in kimberlite (0.2 g/t is considered a good mining grade as 0.2 g = 1 c) that microscopic (<1 mm) diamond counts are used to extrapolate the larger diamond content of a kimberlite when dealing with small sample sizes, such as drill core. The 120.25 kg sample of core assayed in the report held 67 diamonds greater than 0.106 mm in size. By plotting the microdiamond counts against the size classes, it is possible to extrapolate the distribution of diamonds towards higher sizes (see below; data from the 0.6, 1.18, 1.7, and 2.36 sieves have been omitted to correctly fit the trend line as they were zero values).


The power-type trend line here produced a fairly good fit with the data and has an R2 value of 0.9897 (1 is perfect). Extrapolating to the 1 mm size class gives ~1.56 diamonds of that size. It is possible to take this estimation a little further. The mass of a roughly spherical diamond 1 mm in diameter is 0.0000092 carats. Thus there are ~0.0000143 carats of diamond in this size class. With respect to diamonds of this size, the grade for the sample is 0.00012 c/t. A full grade estimate could be obtained by repeating this process for every significant (i.e. economic) size class and adding the grades together. Although the grades would become rapidly smaller with increasing diamond size due to the nature of the distribution. The problem with this particular sample is that not enough data exists to get a strong estimate of the diamond population. The sample is not large enough. Small samples are extremely vulnerable to the “nugget effect” were the presence or absence of one or two larger stones can totally skew the numbers away from the actual value. As things stand now, this sample is useful for showing that the Bling kimberlite is diamondiferous to some degree, but inconclusive beyond that. The next step for NNA and its JV partners is to try and obtain a mini-bulk sample in the 10’s of tonnes.


Looking at this company as a potential investor with some background in the field, there are a number of troubling issues:


1. The insinuation that the presence of megacrysts is indicative of diamond potential. As mentioned above, this is not true. Research suggests that megacrysts are a product of crystallization of the “proto-kimberlite” at depth in the mantle prior to ascent, and not the product of disaggregation on mantle xenoliths, diamondiferous or otherwise. Even with Mr. Kivi’s argument that these are not megacrysts, but indeed deep xenocrysts/xenoliths, the company has yet to publish any evidence either way. If this was the case, then why was this explanation not included in the press release? The company would have likely been better off not mentioning these characteristics of the kimberlite at all until they had determined their exact relevance. These crystals may turn out to be indicative of bling at Bling, or be a red herring.


2. The incorrect spelling of geologic terms such as harzburgite and lherzolite. Also using the term “chrome diopside” when in fact chromium-rich or chromian diopside is the proper term. Chrome is what you get when you plate chromium or an alloy of it onto another metal, e.g. steel. Yes, it seems like a small thing, and it may be just the fault of the fellow they hire to run IR, but where is the P.Geo. who is supposed to look over and sign off on each report? If the trained, accredited professional is not catching these obvious mistakes in material released to the public, what about the stuff that is not made public?


3. The mediocre results on the monument property. Finding a diamondiferous kimberlite is not terribly news-breaking anymore. Please see an earlier article on Diamonds North regarding this. Many other juniors out there, Stornoway, Peregrine, and Shear Minerals to name a few, have far more established properties. Some of these have established grades and even diamond valuations.


Concerning items (1) and (2), it is tempting to regard these as oversights, as Mr. Blusson and Mr. Jennings have years of experience and have both found diamond mines in the past. They also are not part of NNA, but only JV partners on the project. With regards to (3) I do realize that this is a very small junior and is working diligently to find and expand upon potential diamond deposits. It is impressive to note that NNA did manage to get assays back in less than two months from the discovery of the Bling kimberlite. Given the current harsh market for diamond explorers and producers NNA cannot afford to even make small mistakes that would possibly dampen the interest of potential investors. It may be that further work on the Monument Project or one of their other properties will bear fruit, but NNA’s lack of oversight on minor things that are easy to catch could leave some investors eyeing the competency of the people in charge with some suspicion.


Disclaimer: The author holds no shares of NNA. This article is based on the personal opinions and experience of the author. Please do your own due diligence when investing.





Diamonds Comments(0) June 23, 2008 4:45 pm

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