Mountain Province Diamonds, the diamond exploration/development firm up in Canada (Toronto HQ), whose wholly-owned subsidiary Kennady Diamonds oversees what is arguably the world's richest new diamond mine, the Kennady Lake diamond project (Northwest Territories), reported reception of the Type A Land Use Permit for Kennady North from the Mackenzie Valley Land and Water Board.
Kennady North consists of thirteen leases/claims just northwest of the Gahcho Kué Joint Venture (49% participant) between the company and world-renown diamond house, De Beers (here, De Beers Canada Inc.). The extensive exploration for diamonds which previously occurred at the site in the 90's (focused on the Kelvin, Faraday, and Hobbes kimberlites which are a solid analog for the De Beers JV kimberlites, with grades in the 1.77-2.10 carats/ton range) produced notable samples, with single specimens from an 0.09 carat pulled out of Faraday and a 0.09 carat diamond from Kelvin. Probable mineral reserve of JV diamondiferous kimberlites is some 31.3M tonnes at 1.57 carats/ton (or approximately 49M carats).
Exploration at Kennady North recommenced last year (after being suspended in 2004 when the company turned more towards developing the Gahcho Kué feasibility studies) with the Furgo airborne gravity gradiometry surveying of the 48.8 square mile project area (using 50-meter line-spacing). Comprehensive analysis of the airborne survey data indicated 55 targets total and 23 of those targets showed strong signs of abundant resource potential that could add to/extend the overall mine life of the JV operation (NI 43-101 Qualified Person was MDM Director, Carl G. Verley, P.Geo.).
President and CEO of MDM, Patrick Evans, was pleased at the reception of the permits, which clears the way for the company's summer drilling program. With a strategy already decided and plans drawn up for the mobilization of two rigs, MDM has successfully retained Northtech Drilling Ltd. out of Yellowknife and intends to drill some 8.2k feet, starting immediately.
The first rig will be going after choice targets that have been identified in the Kelvin/Faraday corridor, with the second rig focused on the twelve new targets which are accessible during the summer season. A second phase winter drill program is also planned for the front half of next year and will focus primarily on the remaining high-priority targets.
Evans pointed out how this strategy to define the resource at Kennady's Kelvin/Faraday kimberlite corridor made sense considering the proximity of the Gahcho Kué mine geology and underscored upcoming drilling of the newly discovered geophysical targets at the JV project with De Beers. One huge variable here that is expected to pan out nicely is the anomalous nature of the overall extant data that suggests a series of as-yet unexplained kimberlite mineral trains apparently completely separate from the known kimberlites listed above. The projected exploration programs will look to uncover the source of these unexplained data points and MDM intends to issue a news release upon significant findings.
The June 11 announcement of conditional approval from the TSX-Venture Exchange to list Kennady Diamonds (part of the larger deal and strategy) also triggered the transfer proceedings to move the wholly-owned Kennady North project to Kennady Diamonds.
Mountain Province is slated to subsequently put some C$3M into Kennady Diamond via a transfer of working capital when the deal is completed, distributing the whole of the associated shares of Kennady Diamonds to eligible Mountain Province shareholders at a 1:5 ratio (one share of Kennady for every five MDM shares held as of the completion date). Estimated completion date for the deal is sometime before the end of this month and the company plans to make an announcement regarding eligibility in short order.
Extremely positive news for what is widely viewed as the world's premiere emerging diamond mine. When we are talking an actual value of around $185/carat via open-pittable reserve, MDM is an attractive choice for investors.
For more information on the deal, or to learn more about the company, please visit the Mountain Province Diamonds, Inc. website at: www.MountainProvince.com
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