As per usual, a bevy of news releases came out just in time to set the stage for North America’s biggest mining show, the PDAC, which runs March 6th through 9th. The Canadian markets responded by marching to yet another new 52-week high.
Gold, base metals and diamonds all contributed to the action this past week with Nevsun Resources leading the charge. The company once again has the drills turning on its Eritrean property after a two-month hold due to unfavorable politics, and has intersected new massive sulphide mineralization while drill testing coincidental gold-in-soil and geophysical anomalies at its Harena Prospect some 9.5 km southwest of the Bisha Main Deposit, the area of focus up to this point.
The first hole cut gossan mineralization over 18 meters, from 33 to 51 meters downhole, and another 8 meters of metals from 55 to 62 meters depth. A second hole drilled 25 meters beneath the first intersected massive sulphide mineralization over an impressive 36.5 meters, from 63 to 99.5 meters. A third hole drilled a further 25 meters below the second cut massive sulphides over 23 meters, from 105.5 to 128.5 meters.
It’s still early for Harena, and it will be at least five weeks before the actual grade of the massive sulphides is known. More importantly, it remains to be seen if the ore is gold-rich like at Bisha. But based on the fact that the new discovery lies under a gold-in-soil anomaly, the odds are pretty good. Needless to say, the company is continuing to drill the developing prospect in hopes of outlining overall size and significance.
Also getting a boost from the news was Sanu Resources. The Michael Winn-led junior holds the Mogoraib River property, the boundary of which lies only a few kilometers from Nevsun’s new find. Sanu has a drill on the ground and is testing gold prospects on its Guluj and Fanco licenses, before moving the rig over to its VMS prospects on the Kerkebet and Mogoraib licenses. Thanks to Nevsun’s news, the Eritrean play is back and better than ever. Nevsun ended the week up C$0.51 to C$3.40, while Sanu added C$0.26 to close at C$0.89.
On the diamond front, Saskatchewan is heating up after years of moderate results. The driver has been numbers from a 3,050-carat diamond parcel from Shore Gold’s Star kimberlite, which returned a value of $110 per carat and a modeled value of $135 per carat. It did not take the mighty De Beers long to respond to the news. The major, along with joint venture partner Kensington, laid out an accelerated work program for their neighboring property. Most notably, the $25.6 million program will include delineating the extent of the Star kimberlite on their claim.
Speculation is already starting to swirl as to how the area play will develop. Economically it makes sense to develop the entire Star kimberlite rather than just the eastern half. Then it becomes a question of who takes whom to the altar, and will it be a shot gun wedding. Shore, for its part, wasted no time in cashing up by announcing a $100.1 million bought deal financing at a price of $5.50 per share. Interestingly, Newmont Mining took 8.95 million shares of the offering and at the end of the day will hold around 9.9% of Shore’s stock. With Newmont’s large-scale mining capabilities, a potential showdown with De Beers could be looming. Shore Gold ended the week up C$2 to $7; Kensington followed suit, adding C$0.84 to close at $2.58.
Also benefiting from the diamond rush was Forest Gate Resources. The junior holds ground in the general vicinity of the Star kimberlite and recently announced that it has increased its proposed financing to $6.5 million, from $4 million. The junior added C$0.19 to close at C$0.48.
Ashton Mining of Canada also had favorable news on the diamond front. The company reported that a 6.04-tonne sample from the Renard 9 kimberlitic body in north-central Quebec returned an estimated diamond content of 92 carats per hundred tonnes. Lying on the Foxtrot property, in which Ashton holds a 50% stake, Renard 9 is one of six kimberlitic bodies in the 50 hectare “Core Area” of the Renard cluster. Four of these bodies, Renard 2, 3, 4 and 65, were the subject of a 664-tonne bulk sample program in 2004 that yielded 457 carats of diamonds. Twenty-five of the diamonds weigh more than one carat, including eight greater than two carats. Ashton ended the week up C$0.13 to C$1.48.
Heavily-promoted Messina Minerals got a boost from news that three drill holes completed on its Boomerang massive sulphide prospect on the Tulks South Property in central Newfoundland returned good mineralization, with GA04-11 yielding 13.9 meters grading 0.7% copper, 2.6% lead, 13.6% zinc, 102.1 g/t silver and 1 g/t gold. Investors applauded the results by bidding up the stock C$1.35 to C$3.80.
Moving over to the big board, the gold miners continued to move in different directions, with Placer Dome losing C$0.21 to close at $20.99, while Barrick Gold added C$0.40 to close at $31.30.
With the bullion price holding above $430 per ounce and the promotional wheels at the PDAC kicking into high gear, next week should prove interesting, so stay tuned.