Mr. Jim Gowans reports
DOMINION DIAMOND PROVIDES EXPLORATION UPDATE AND ANNOUNCES MAIDEN RESOURCE AT LESLIE PIPE AT EKATI
Dominion Diamond Corp. has provided an update on its renewed strategic focus on
greenfield exploration activities at the Ekati diamond mine, Diavik diamond mine and other properties in the
Lac de Gras region in the Northwest Territories in Canada. The company
also announced a maiden resource at the Leslie kimberlite pipe at the
Ekati mine. Unless otherwise indicated, all financial information is
presented in U.S. dollars.
Highlights:
-
Maiden inferred mineral resource of 51 million tonnes and 16 million
carats at the Leslie pipe, the highest priority amongst pipes at the
Ekati mine that have been bulk sampled, but not yet included in the
mine plan;
- Renewed strategic focus on exploration with success-based five-year
budget of approximately $50-million (Canadian);
- 150 known kimberlites on the Ekati property, including approximately
110 pipes that have not had follow-up bulk-sampling programs;
- Kodiak pipe at the Ekati mine is the highest priority amongst pipes
that have not been bulk sampled, and is land based;
- Kodiak and Leslie pipes are close to existing infrastructure at the
Ekati mine, with potential to be included in a future life-of-mine plan;
- At Diavik, the 2017 program includes drilling, microdiamond sampling
and additional mineral chemistry analysis on three priority kimberlites;
- Large land position, with exposure to more than 680,000 hectares, and
infrastructure advantage in highly prospective Lac de Gras region.
"Our renewed focus on exploration is generating strong results along
the entire project pipeline, reflecting near-, mid- and longer-term
potential," said Jim Gowans, chairman of the board. "We expect to
complete prefeasibility studies on Misery Deep and Fox Deep during the
current fiscal year, and have identified high-potential pipes in
proximity to our existing infrastructure in the Lac de Gras region. The
Leslie pipe is our highest-priority pipe amongst kimberlites that have
been bulk sampled, as demonstrated by the announcement of its maiden
resource.
"We are mining and exploring in what is still a relatively young
mining district," continued Mr. Gowans. "There has been no greenfield
exploration at Ekati since 2007, and of the 150 known kimberlites, only
about 40 have had follow-up bulk sampling. We believe there is strong
potential for further exploration success at Ekati and Diavik and
throughout the highly prospective Lac de Gras region."
Background
The first diamond-bearing kimberlite pipe in the Lac de Gras region was
discovered at Point Lake on the Ekati property as a result of systematic
heavy mineral sampling by prospectors Chuck Fipke and Stewart Blusson
over a 10-year period, and was ultimately confirmed by drilling in
1991. Mining operations were started by the operator of the Ekati mine,
BHP Billiton, in 1998. Dominion acquired its initial interest in the
Ekati mine in 2013.
The Core zone at the Ekati mine, in which the company has an 88.9-per-cent
participating interest, encompasses 175 mining leases, totalling 172,992
hectares, and hosts the Koala, Fox, Misery Main, Misery South, Misery SW
Extension, Pigeon and Sable pipes, as well as the Leslie and Kodiak
pipes. Kimberlite pipes having both development and exploration
potential are hosted in an area adjacent to the Core zone referred to as
the Buffer zone, in which the company has a 72-per-cent participating interest.
The Buffer zone contains 106 mining leases covering 89,184 hectares, and
hosts the Jay and Lynx pipes.
To date, exploration activities at the Ekati property have included till
sampling, airborne and ground geophysical surveys, and drill programs.
Approximately 350 geophysical and/or indicator dispersion targets have
been drilled, with a total of 150 kimberlites discovered to date in the
Core zone and Buffer zone.
For further details and information concerning the Ekati mine, please
refer to the technical report entitled "Ekati diamond mine, Northwest
Territories, Canada, NI 43-101 technical report" that has an effective
date of July 31, 2016. For further details and information concerning
the Diavik mine, please refer to the technical report entitled "Diavik
diamond mine, Northwest Territories, Canada, NI 43-101 technical report"
that has an effective date of Jan. 31, 2017. These technical reports
can be found on the company's profile at SEDAR
and on the company's website.
Ekati exploration
Leslie
The Leslie kimberlite pipe is the highest-priority pipe amongst
kimberlites that have been bulk sampled, but not included in the current
mine plan. It was discovered in the summer of 1992, and is located under
a small lake between the Koala and Fox pipes, one kilometre east of the
Fox haul road. Close proximity to the existing infrastructure is a very
positive factor for the Leslie pipe.
Several drilling programs were completed at the Leslie pipe, resulting
in 12 delineation diamond drill holes and 12 reverse circulation (RC)
holes. The initial diamond recoveries and pipe size were encouraging.
The pipe has a circular surface area of approximately seven hectares. A
sample of 224 carats has been recovered from approximately 680 tonnes of
kimberlite for an average grade of 0.3 carat per tonne. Diamond price
modelling is based on the 224-carat parcel.
Grade estimation has been completed for the Leslie pipe using a method
similar to that used at the Sable and Jay projects. Grade data were used
along with bulk density data and pipe modelling to determine average
grades on 30-metre vertical intervals. A block model was completed by
Mineral Services Canada Inc., a consultant with significant experience
in diamond exploration and knowledge of the Ekati property. There are no
mineral reserves at Leslie pipe. The maiden mineral resource is shown in
the attached table, expressed in millions of tonnes (Mt), carats per tonne
(cpt) and millions of carats (Mct).
LESLIE MINERAL RESOURCES AS OF MAY 10, 2017 (100-PER-CENT BASIS)
Zone Type Measured mineral resource Indicated mineral resource Inferred mineral resource
Mt cpt Mct Mt cpt Mct Mt cpt Mct
Core OP - - - - - - 50.8 0.3 16.3
Notes:
(1) Dominion has modelled the approximate rough diamond price for the
Leslie pipe to be $85 per carat, with a high-case estimate of $120 per
carat. To demonstrate that there are reasonable prospects for economic
extraction, the high case was assumed along with 2.5-per-cent-per-annum
real price growth during the life of the mine.
(2) Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
(3) Mineral resources are reported in accordance with CIM (Canadian
Institute of Mining, Metallurgy and Petroleum) definition standards.
(4) Dominion is operator and has an 88.9-per-cent participating interest
in the Core zone joint venture area.
(5) Mineral resources are reported at an above-0.5-millimetre cut-off
(based upon diamonds that would be recovered by the Ekati bulk sample
plant using a 0.5-millimetre-width-slot de-grit screens).
A concept study is planned for the Leslie pipe in 2017, and future work
plans are under consideration.
Kodiak
The Kodiak kimberlite pipe was discovered in 2000, and is located
approximately seven kilometres east of the central infrastructure at the
Ekati mine, and three kilometres east of the Misery haul road. It is
land based and is overlain by 25 metres of glacial till. The pipe has a
surface area of 1.5 hectares and is infilled with resedimented
volcaniclastic kimberlite, which is typical of the economic pipes at the
Ekati and Diavik mines. Preliminary mineral chemistry and microdiamond
results are indicative of moderately diamondiferous kimberlite, and the
microdiamond population contains a favourable proportion of white
octahedral fragments.
The work plan includes ground geophysics and a follow-up vertical drill
hole in the centre of the pipe in July, 2017. This is expected to
increase the microdiamond sample and provide information on the
kimberlite geological domain. Remodelling of the pipe size and geology,
microdiamond estimation, and quality assessment should be completed by
the fall of 2017. Pending the results of this program, a reverse circulation bulk sample
program may be planned for winter 2018.
Fiscal 2018 exploration program
As part of the company's renewed focus on exploration, a greenfield
exploration program was initiated at Ekati in fiscal 2018, to generate
new targets and investigate known kimberlites that have not yet been
subject to extensive testing. This four-part program includes an
assessment of historical geophysical data, till sample data analysis, an
evaluation of known kimberlites to prioritize targets, and a field
program composed of geophysics and diamond drilling of high-priority
targets.
For the geophysical data assessment, two 100-square-kilometre blocks -- the Misery block and the Fox block -- have been prioritized. The airborne
magnetic and electromagnetic (EM) data have been reprocessed, gridded and
interpreted in the context of known kimberlites pipes and bedrock
geology, with the objective of generating coincident geophysical
anomalies to be prioritized for drilling.
Till data analysis is under way in parallel with the geophysical data
assessment. This involves a study of glacial material using terrain
analysis and photogrammetry, to improve discernment of the
dispersion of indicator minerals associated with known kimberlites and
new geophysical anomalies.
Evaluation of known pipes involves sample data analysis and
prioritization, including a comprehensive assessment of microdiamond
populations. The initial focus has been on the Leslie and Kodiak pipes.
The summer 2017 field program is expected to include geophysical
surveys and culminate in diamond drilling of the Kodiak pipe and at
least five geophysical targets in the Misery and Fox blocks.
Misery block
The Misery block is a 10-kilometre-by-10-kilometre block centred on
the Misery kimberlite complex, approximately 35 kilometres southeast of
the Ekati process plant. The Misery block contains the current mining
operations of the Misery and Lynx kimberlites. The original airborne
geophysical survey data were regridded and analyzed by Mineral Services.
New approaches were used to discern the more subtle conductivity
anomalies at depth and the associated magnetic signatures in areas of
geologic noise. Priority was placed on coincident anomalies
characterized as conductors with extension to depth and disruption to
the magnetic fabric. Of the 46 anomalies of interest, five have been
prioritized for possible drilling, and all are within three kilometres
of existing or planned roads.
Follow-up ground geophysical surveys are to be carried out over some of
the targets prior to drilling. Mineral Services plans to trial a
high-resolution aeromagnetic system over known pipes and several targets
in the Misery area.
Fox block
Similar to the Misery block, the Fox block is a 10-kilometre-by-10-kilometre block centred on the Fox kimberlite pipe, approximately seven
kilometres southwest of the Ekati process plant to which it is connected
by existing road infrastructure. A review by Mineral Services of
regridded airborne EM and magnetic data is under way. This includes a
review of the geophysical signatures of known kimberlites and bedrock
geology. Targets are to be identified based on the presence of
conductors with extensions to depth, in combination with subtle magnetic
anomalies or disruptions to magnetic fabric. Of the 24 anomalies of
interest, three have been prioritized for possible drilling.
Summer field program
Ground geophysical surveys, including magnetics and horizontal-loop EM,
are to be carried out in the area of the Kodiak kimberlite, as well as on
land targets in the Misery and Fox blocks. An unmanned-aerial-vehicle-(UAV)-mounted high-resolution magnetic system will also be tested.
Diamond drilling is expected to consist of a single 300-metre vertical
drill hole into the Kodiak kimberlite and testing of at least five new
targets in the Misery and Fox blocks. The Kodiak pipe and any new
kimberlite discoveries will undergo microdiamond evaluation in addition
to standard logging processes.
Regional exploration
Lac de Gras joint venture project
The Lac de Gras joint venture (LDGJV) property covers an area of 1,470
square kilometres and is located south of and adjacent to the existing
Ekati and Diavik mines within the geological terrane known as the Slave
craton. The LDGJV agreement was signed in 2015, and the resulting LDGJV
property formed from an amalgamation of claims and mineral leases
formerly held by Dominion and North Arrow Minerals. Dominion is the
operator and, as of Feb. 1, 2017, had a participating interest of
approximately 60 per cent, the remaining interest being held by North Arrow
Minerals.
Exploration work spanning over 25 years has resulted in the discovery of
three kimberlites within the LDGJV property and has produced a large
database of sampling, drilling and geophysical information. A
comprehensive review of this database was conducted during 2016,
including the compilation and interpretation of 5,438 historical till
sample results. This review resulted in the identification of 13
anomalous kimberlite indicator mineral (KIM) trends that were
recommended for further follow-up work. The KIM trends were compared
with available regional geophysical data, and seven geophysical targets
were identified for follow-up based on their association with one or
more of the anomalous KIM trends.
The 2016 exploration program also included a review of the historical
airborne geophysical data sets and their re-evaluation using modern
processing and interpretive techniques. A 220-square-kilometre area with
limited or poor geophysical coverage was selected for a new survey using
a time domain electromagnetic system which measures resistivity and
conductivity, and a magnetic gradiometer system to measure variations in
the ground's magnetic properties. The results of the 2016 survey were
incorporated into the property data set and used in a target selection
process leading to the identification of 236 anomalies. Twenty of these
anomalies were selected as priority targets for follow-up in 2017,
including several targets that were upgraded based on their proximity to
the identified regional KIM trends.
A spring 2017 ground geophysics program utilizing magnetic, gravity and
resistivity techniques has been completed over the 20 selected targets.
The data are currently being interpreted and will be used to guide the
selection of targets for possible drill testing later this summer.
Additionally, a 400-square-kilometre area in the southern part of the
property will be covered with a new airborne geophysical survey during
the summer of 2017.
Glowworm Lake
The Glowworm Lake leases were acquired in early 2016 and occupy 1,408
square kilometres north and east of the Diavik mine. The property is
favourably located on the central Slave craton, but does not currently
have any known kimberlite pipes. There are, however, several pipes in
adjacent areas, pointing to the prospectivity of the region. As part of
the acquisition, Dominion received the sampling, drilling and
geophysical data from the previous exploration work, including more than
5,000 till sample results.
A re-evaluation of the historical data on the Glowworm Lake property is
under way. KIM data have been compiled, and areas were reassessed for
follow-up targeting. A number of unresolved KIM anomalies have been
highlighted, including G10 garnet anomalies. In addition, the
geophysical data are being assessed for reprocessing and
reinterpretation. Follow-up target selection will be made based on both
geophysical criteria and KIM associations.
A study of the known kimberlite pipes in the region is continuing to better
understand kimberlite characteristics in the area to refine
targeting techniques.
A field program is planned for 2017 with targets being selected for
follow-up with ground geophysics (magnetics, gravity and resistivity).
The data collected from the ground surveys will be used to select future
drill targets. Any new kimberlite discoveries will advance to core
drilling for morphology definition and microdiamond sampling.
Diavik exploration
The Diavik joint venture consists of the Diavik mine and its surrounding
exploration properties, comprising 153 mining leases and covering
330,230 acres. The A-21, A-154 North and A-154 South kimberlite pipes
were discovered in 1994, and the A-418 pipe was discovered in 1995.
Initial mining commenced in late 2002, and commercial production in
early 2003. Exploration continued after the mine start-up and into
operations, until 2013. Activities included additional geophysical
surveying, till sampling, sample processing, indicator mineral counts
and analyses, mapping, and drilling. Many more kimberlites were found,
but none have been economic to date.
Three priority kimberlites -- C42, T29 and A61 -- have been highlighted
for additional work based on potential size and proximity to the
existing infrastructure. The goal for 2017 is to delineate these
kimberlites further, using core drilling, and to collect sufficient
material for mineral chemistry and microdiamond sampling.
The C42 pipe is the highest-priority pipe at Diavik, and is located 1.4
kilometres southwest of the A-21 pipe. It was intersected with three
drill holes between 1994 and 1995, including hole C42-03, which
intersected 280 metres of kimberlite, of which 192 metres were reported
as pyroclastic kimberlite. Based on the three drill holes and
geophysical EM interpretation, the surface area of the pipe is estimated
at 2.9 hectares. Mineral chemistry analysis confirmed the presence of a
high-interest peridotitic garnet population at C-42. The pipe has not
been adequately sampled for microdiamond analysis.
The T29 pipe is located seven kilometres south of the Diavik mine. Based
on the four drill holes that intersected the pipe between 1992 and 1996,
the kimberlite is macrocrystic and highly altered, with kimberlite
intervals ranging between 12 and 30 metres in thickness. T29 is
interpreted as a long, thin kimberlite, with a length of up to one
kilometre. There are no mineral chemistry or microdiamond results for
T29.
The A61 pipe is located 20 kilometres northeast of the Diavik mine. It
was intersected with two drill holes between 1993 and 1994.
Intersections include intervals of seven metres of coherent kimberlite
(HK) and 48 metres of volcaniclastic kimberlite. The surface area is
estimated at 1.1 hectares. Mineral chemistry results confirm the
presence of garnets and chromites within the diamond stability zone.
There are no microdiamond results from A61, and additional mineral
chemistry sampling is required.
Additional work has been recommended on the three priority kimberlites.
This includes two to three drill holes on each pipe, microdiamond
sampling and additional mineral chemistry analysis for a total spend of
approximately $1-million (Canadian) in calendar 2017.
Qualified person
The mineral resource estimate for
the Leslie pipe was prepared and verified under the supervision of Peter Ravenscroft, FAusIMM, of Burgundy Mining Advisors Ltd., an
independent mining consultancy, a qualified person within the
meaning of National Instrument 43-101. The other scientific and
technical information contained in this press release has been prepared
and verified by Dominion, operator of the Ekati diamond mine, under the
supervision of Jon Carlson, PGeo, manager of strategic planning, for
the Ekati operation with Dominion, a qualified person within the
meaning of National Instrument 43-101 of the Canadian Securities
Administrators.
About Dominion Diamond Corp.
Dominion
Diamond is a Canadian diamond mining company with ownership
interests in two major producing diamond mines. Both mines are located
in the low-political-risk environment of the Northwest Territories in
Canada. The company operates the Ekati diamond mine, in which it owns a
controlling interest, and also owns 40 per cent of the Diavik diamond mine. It
supplies premium rough diamond assortments to the global market through
its sorting and selling operations in Canada, Belgium and India.
We seek Safe Harbor.
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