VANCOUVER, British Columbia, July 23, 2014 (GLOBE NEWSWIRE) -- Diamond explorer North Arrow Minerals (TSX-V:NAR) is set to commence its first drill program with partner Arctic Star Exploration at Redemption, a project located in the famed Lac De Gras diamond district, currently home to three of the world's largest diamond mines: Dominion's Ekati, Rio Tinto's Diavik, and De Beers' Snap Lake.
North Arrow knows the Lac De Gras region perhaps better than any other currently assembled diamond exploration team. The company's Chairman, Gren Thomas, made the world-class discovery of the Diavik Diamond Mine just 32 kilometers from where drilling at the Redemption will take place. Diavik is currently the 5th largest diamond mine in the world estimated to produce $787 million worth of diamonds in 2014.
Thomas, an inductee in the Canadian Mining Hall of Fame, discovered Diavik with the same pragmatic prospecting philosophy that the North Arrow team is utilizing at Redemption –explore the least trafficked land in the closest proximity to the largest and most economic diamond deposit in world. In an exclusive interview with Financial Press, North Arrow's Thomas explained, "The exciting thing about Redemption…in looking for a new diamond deposit near Diavik is yes, you already know you're in the right area geologically; the rocks have been proven, but the other thing is you don't have to find another Diavik. You have the existing mine infrastructure nearby already. You don't necessarily have to find a standalone mine. This has a real impact on lowering your threshold for a new discovery."
North Arrow President and CEO Ken Armstrong noted that he sees particular prospective appeal in Redemption as it hosts the Coppermine train, which is "one of the last well-defined and un-sourced kimberlite indicator mineral (KIM) trains in the Lac de Gras region." KIM trains are common in terrains where a glacier advanced over a kimberlite pushing and dispersing the kimberlite material in the path that the glacier traveled. As the glacier melted, the train was left in place, in essence creating a trail to the kimberlite. The discoveries of Diavik and Ekati, as well as world-class diamond discoveries in Russia's arctic have been identified using a similar technique.
Kimberlite pipes are geological formations that serve as the primary source of mined diamonds.
Prior to North Arrow's involvement in the project, Redemption had over C$13 million invested in exploration with over 3,100 till samples taken and 10 airborne geological surveys conducted on the property. Given all of the exploration dollars spent on the project, there have only been approximately 20 holes drilled, and a lot of the past drilling encountered logistical complications failing to provide a true indication of the targets potential. The history of Redemption presents an optimal opportunity for recently financed North Arrow to step in as project operator.
In July of last year, North Arrow entered into an earn-in agreement with Arctic Star, where North Arrow has the option to spend C$5 million by July 2017 to earn a 55% interest in the rights to Redemption. By the completion of the current drill program, North Arrow will have already spent approximately C$2 million towards the earn-in.
With the help of new geophysical technology and advanced mineral chemistry that did not exist during the last diamond rush in Canada following the discovery of Ekati and Diavik over 15 years ago, North Arrow has singled out 6 to 8 "high-priority" targets to drill, totaling 1000 meters. Any kimberlite discovery in the Coppermine train could be a big boost for North Arrow shareholders. Armstrong notes hitting kimberlite for the first time in the Coppermine train would "provide validation of our business plan." Given the indicator minerals found in the train, there is good reason to believe that if kimberlite is identified it will bear diamonds.
According to De Beers, only 6,400 kimberlite pipes have been discovered in the world, of those only approximately 900 have been classified as diamond bearing, and of those just about 100 have been economic enough to mine. This past November North Arrow stock surged 40% after the company announced that its exploration efforts led to a diamond bearing kimberlite discovery at its Pikoo property in Saskatchewan.
The North Arrow drill team arrived at the Redemption camp late last week and the drilling program is set to run through the middle of August. Results from the program can be expected shortly after drilling is complete, if not before --if kimberlite is hit, the results may be considered material and would merit an imminent press release.
In addition to Redemption, North Arrow shareholders also enthusiastically await results from one of the company's Nunavut projects, Qilalugaq, where results from a bulk sample are expected in early 2015. The results from the bulk sample could be a game changer for the company, as Armstrong notes "strong results from the sample could take North Arrow from an exploration company to a developer."
North Arrow is one of the few pure diamond exploration companies in the world today just as a boost in new demand for diamonds is forecast to outpace new supply. Russia's Grib mine, which started production last month, will be the first new non-alluvial diamond mine to produce more than 1 million carats per year since Diavik came online in 2003.
New global demand for diamonds is primarily coming out of China, where the current generation is the first to adopt the Western tradition of giving diamond engagement rings. The number of urban Chinese brides being given a diamond engagement ring has increased from less than 1% to greater than 50% over the last 20 years; half of China's population of 1.3 billion is considered urban.
North Arrow is just off of its 52-week high of C$0.84 closing at C$0.81 on July 18th. The stock trades close to 100k shares a day on the Toronto Venture exchange under the symbol NAR, and NAHWF in the U.S.
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