Patrician finds more Borden diamonds

Patrician Diamonds Inc (TSX-V:PXC) Tuesday November 9 2004 - Street Letter by Will Purcell Patrician Diamonds Inc. has a few more tiny diamonds from its property on northwestern Baffin Island. The company stirred up some notice this summer when it found a larger diamond on the Borden Peninsula play. Since then, Patricia added to its land position and made some moves that suggest the Baffin project will have a high priority. Baffin Island continues to deliver kimberlites and diamonds, and Borden Peninsula was the site of some earlier finds. Still, it will likely take a large kimberlite pipe with some significant diamond counts to excite the market. The Borden property Patrician picked up its Borden play earlier this year, when it staked what began as a fairly small property. The claims are near Fabricius Fiord, just west of Admiralty Inlet. The project is on the western part of Borden Peninsula, about 90 kilometres south of Arctic Bay and Nanisivik. Patrician has some well-heeled neighbours. De Beers Canada Corp. holds a massive block of ground about 60 kilometres to the southeast. The diamond giant began working on Baffin Island several years ago and has long hunted diamonds in the Far North. De Beers worked on Somerset Island during the 1970s, finding a slightly diamondiferous kimberlite cluster about 350 kilometres west-northwest of Patrician's Borden property. There has been a flurry of activity on Melville Peninsula, about 350 kilometres south of Patrician's property. Stornoway Diamond Corp. and BHP Billiton Ltd. are working on a promising new kimberlite clusters that are producing significant diamond grades. The best finds on Baffin Island occurred on Brodeur Peninsula, just across Admiralty Inlet, about 200 kilometres northwest of Patrician's property. Twin Mining Corp. has been active there for several years and its play produced enough promise to warrant a larger mini-bulk test. Kennecott Canada Exploration Inc. has a rival play on Brodeur, and the exploration arm of Rio Tinto has several diamondiferous pipes of its own. Patrician added to its Baffin project during the summer and fall and the play now covers nearly 90,000 hectares of ground. As well, Patrician bought a small claim from Mountain Province Diamonds Inc. early this fall. The 330-hectare claim is in the heart of Patrician's play, close to where the company found its larger diamond this summer. As well, Patrician gains access to Mountain Province's exploration data from its old Borden play. That information includes some diamond finds, but it is the indicator mineral work that should help speed up Patrician's exploration effort. Patrician must issue 325,000 of its shares to Mountain Province to acquire the claim and the data. Those shares have been trading for just a dime of late, so the effective purchase price is about $32,500. Patrician spokesman, Arjin Kouwenberg, said the Mountain Province claim was immediately adjacent to ground Patrician originally picked up. As well, the company staked new claims in the other direction. As a result, it appears that Patrician has high hopes for the area near Fabricius Fiord. The early Borden promise The first diamond promotion centred on Borden Peninsula came in 1999. Elizabeth Kirkwood and Bill Jarvis's Opus Minerals Inc. acquired some exploration data and discovered a series of kimberlite intrusions near Fabricius Fiord. With Mountain Province as a partner, Opus found four trains of kimberlite boulders that stopped in lakes or led to kimberlite outcrops near a lake. As well, the exploration effort produced indicator minerals in other parts of their project. The discovery caught the notice of speculators. Opus's shares traded for about a quarter prior to the find, but the stock surged above the $1 mark in the weeks following the news. The shares of Mountain Province also reacted to the discovery, jumping from $2.15 to an intraday high of $2.60, on word of the new Baffin play. The enthusiasm did not last. Late in 1999, the partners revealed that although the finds appeared diamondiferous, their diamond content was not enough to support much more work. Nevertheless, the indicator mineral sampling suggested that other parts of the property had more promise, and it was in those areas that Mountain Province planned to carry the search. Opus transferred its interest to another of Ms. Kirkwood's companies, First Strike Diamonds Inc., and Mountain Province did spend another year poking around on the project with its new partner. The Borden play yielded several new kimberlite occurrences and the partners sent samples from four of them for microdiamond recovery. There were no diamonds in that material and interest in the play quickly evaporated after that. Mountain Province did not put in a major effort on the Baffin project after the 2000 program. The company did carry the project on its books until early this year, when it wrote off the play. The recent encouragement Little Patrician has not had much luck at producing toutable quantities of microdiamonds from its kimberlitic rock, but the company did deliver one stone with some promotable oomph this summer. Patrician processed about 73 kilograms of kimberlitic fragments, recovering two diamonds. One stone was tiny, falling through a 0.15-millimetre sieve, but the second was another matter entirely. The larger diamond sat on a 3.35-millimetre sieve and measured more than four millimetres long. The stone weighed 0.31 carat and was a colourless, frosted crystal. That offered enough promotability to warrant a photo spread in a prominent spot on Patrician's website. The find caught the market's eye. Patrician' shares were slumbering below a dime, but the larger diamond sparked enough interest to carry the company's stock to a 21-cent peak. Interest gradually waned however, and a Patrician share could once again be had for just a dime by mid-October. Earlier, Patrician recovered an array of kimberlite indicator minerals from rock samples taken from another site. The outcropping bodies, which appear to be blows or small pipes, were up to 20 metres in diameter. Small samples of the rock did not produce any diamonds. The company recently collected kimberlite samples from the western part of that site. About 48 kilograms of kimberlite produced two tiny diamonds. The two stones remained on a 0.106-millimetre screen, but the longest diamond was just 0.20 millimetre long. Patrician recovered a third diamond from about 41 kilograms of kimberlite float taken from the bed of a small stream. That microdiamond was 0.22 millimetre long. Patrician's exploration program ran into delays during the summer. Mr. Kouwenberg said that aircraft availability was a problem, and when the company finally did get an aircraft, fog set in. Despite the delays, Patrician likely has enough indicator mineral data to keep it busy in the immediate future. A geophysical survey in the areas with promising indicators seems a likely next step, and that would lead to a drilling program at some point, according to Mr. Kouwenberg. The area promise Baffin Island has produced some promotable diamond finds, although none of them are likely to be economic, based on work so far. The Freightrain pipe that Twin Mining sampled in 2000 delivered the best result, with a grade of about one-quarter of a carat per tonne in the core region of the body. Twin came up with a modelled grade of about one-half carat per tonne from the best parts of the pipe, but there has been little work on Freightrain since then. Kennecott found a series of kimberlites on its large property on Brodeur Peninsula, and one of them yielded intriguing diamond counts. The large Tuwawi pipe produced 319 diamonds from about 1.5 tonnes of rock, and there were some larger stones in the mix, offering hope for a coarse size distribution. The Brodeur results bode well for the diamond prospects on the neighbouring Borden Peninsula. The Somerset kimberlites were just barely diamondiferous, but things are more promising to the south, where Stornoway is working on a promising series of finds just south of Baffin Island. About 10.4 tonnes of kimberlite from the AV-1 pipe produced 8.6 carats of diamonds so far, for a grade of 0.82 carat per tonne. At least a few other bodies in the area could have significant grades as well. The players Eric Craigie took over as president of Patrician early this month, replacing Robin Dow. Mr. Dow becomes chairman of Patrician and the company's chief executive officer. A geologist by trade, Mr. Craigie started exploring for gold and metals in the early 1970s. He began working for BP Minerals Ltd. in the late 1970s and he ran BP's diamond exploration program from 1984 until he took up consulting in 1992. Mr. Craigie's arrival could signal a bump in priority for Patrician's Baffin play. Mr. Craigie was the field manager of the original exploration program of Opus and Mountain Province back in 1999, and he had a hand in the beginnings of the project. Mr. Craigie has a share of a 1-per-cent royalty on the one Mountain Province claim recently picked up by Patrician. Patrician found a spot for Mr. Craigie on its board when Jacques Letendre quit. Mr. Letendre was a key geologist with De Beers Canada Corp. until the mid-1990s. After that, he helped found Majescor Resources Inc. and is the company's vice-president of exploration. Majescor is busy on several diamond hunts across Canada. Mr. Letendre will continue to be a consultant with Patrician. Patrician could use some good news from its Baffin play. The company' shares gained a penny on Monday, closing at 11 cents.