Dianor Resources of Val d’Or, QC, is the first mining company in Canada to secure an equity line of finance with which to advance a project. It has secured a $30-million line of credit with Kodiak Capital to fund a bulk sample at its Leadbetter diamond project near Wawa. In August 2010, Dianor arranged a $10-million term-credit facility with Third Eye Capital.
Nor is this the only first for the project, Dianor president and CEO John Ryder told CMJ. The diamonds at Leadbetter occur in conglomerates, not kimberlites. The rocks have been reliably dated as being 2.7 billion years old. That makes them at least a billion years older than the next oldest diamond-bearing rocks.
Ryder theorized that the original host rock was kimberlite, but it weathered away. The diamonds left behind may have been concentrated on a beach by an earthquake or other major event. And when the beach sand metamorphosed into conglomerate, the gems were embedded. The inventory of precious stones includes Type 2 diamonds, rubies and sapphires. The usual indicator minerals are also present.
Diamonds are found in conglomerates in only two other places – one mine in Australia and the Witwatersrand in South Africa. Those deposits are associated with uranium, and Leadbetter contains none of that. Moreover, Witwatersrand was mined for its gold rather than diamonds.
Which brings up another unique aspect at Leadbetter. In drill core samples taken during the 50,000 metres of drilling already done on the property, 42% returned gold values over 5 ppb, and one was 8 g/t Au, said Ryder. It may be possible to take the tails from the diamond recovery plant and run them through a gold recovery plant. It is an idea that deserves to be investigated.
Dianor is considering a diamond mine considerably different than other Canadian producers. Ryder sees a potentially huge open pit, built around a moderate grade, large tonnage operation. Other diamonds mines are low-tonnage, high-grade undertakings. Resources at Leadbetter may be 550 million tonnes.
Ryder sees several other upsides for the Leadbetter project. He anticipates that a major diamond supply shortfall is on the horizon. Using a 0.5-mm screen to recover smaller diamonds will increase the resource; stones as small as 0.3 mm can be cut and polished in India. And according to back of the envelope estimates, costs will be extremely low. Selling the rubies might fund the entire operation.
Dianor (www.Dianor.com) has been investigating the Leadbetter deposit since 2004. Barring any undue delays, a dense media separation (DMS) plant may be on site in Q1 2011 and be ready to go later in the spring. It will be commissioned with sand and gravel from a 3-km long, 13-m thick deposit on the property. Yes, gems have also been recovered from this material. Half of the 50,000-t bulk sample will be taken from the Northern zone. Although the planned mine will be an open pit, a decline is being driven to ensure a representative bulk sample of the material is taken.
Now all that remains is to convince the investment community that a unique diamond project can be a very profitable one.