Saskatchewan’s Craton proven as Canada’s newest diamond district

The discovery of Canada’s newest diamond district bubbled up in the foam of one of those ‘beery’ sessions geologists are prone to now and then.

“The concept (of a new diamond region) developed over some beers, but it took years to bring it to fruition,” recalls Robin Hopkins, now the Vice-president of Exploration for Stornoway Diamonds Inc. And typical of the way things work in the junior exploration arena, it also needed a complex string of corporate swaps and deals to prove it real.

Around 2006, three experienced diamond hands from the Aber/Kennecott camps of the early 1990s, including Hopkins, Mike Stubley and John Armstrong, were recruited by Stornoway, the junior explorer then lead by Eira Thomas, to comb the country for prospective new ground in the hunt for diamonds. The Shield country of central Saskatchewan came up on the radar; with the characteristics of other ancient cratons, it could be likely country for a new gem discovery.

Fueled by recent geology reports filed by Government of Saskatchewan and university researchers and their own diamond-hunting savvy, the veteran team realized that the province’s eastern flank fit the bill. It assembled a 33,000 ha parcel near Pikoo Lake.

Stornoway, founded by Thomas in 2003, was at the time focused on developing its flagship Renard diamond project in Quebec. However, through the latter 2000s it continued to invest in the Saskatchewan project, 140km east of La Ronge, building the geological case for a new gem field and seeking targets to drill.

By 2011, Eira had left Stornoway. The company was putting everything it had into Renard and couldn’t advance on Pikoo. Early in 2013 it optioned the ground, along with properties in Nunavut and Ontario, to Eira, who in turn optioned them to her father Gren Thomas and his junior, North Arrow Minerals Inc, to advance the project  in exchange for an interest.

It was a decisive move. With Pikoo, the father-daughter team, already fabled for their co-discovery of the Diavik mine in 1994, could be on the cusp of yet another Canadian diamond giant. 

Pikoo  Heralds New Diamond District

Following Stornoway’s geological sleuthing, North Arrow in July 2013 pulled a small 210kg drill sample from the PK150 kimberlite.  It yielded a surprising 745 diamonds, including an impressive 23 stones larger than 0.85mm in size, a generally accepted minimum for evaluating commercial potential.

North Arrow’s November announcement set a new bar for such remarkable early drill results. The so-called Sask Craton was hailed as Canada’s newest diamond district and set off a flurry of staking that so far has captured at least 10 times North Arrow’s own 33,000 ha parcel. 

“It’s created a play that has an audience,” says North Arrow’s President and CEO, Ken Armstrong. “The Sask Craton tectonically has some real similarities to the Slave Craton,” which already hosts the three producing mines in the NWT.

The province already has a diamond heritage. Shore Gold Inc.’s Star project east of Prince Albert has been under exploration since 1995. The company is moving forward on permitting and financing for what could be a 34 million carat, 20 year-plus producer.

North Arrow is currently studying Pikoo’s geochemistry and evaluating the best methods to further define the project. “Many priority targets remain on the property,” said North Arrow’s announcement, noting the find lies only 10km from existing highway and power lines.

Transformative Potential in Nunavut

For all Pikoo’s potential, North Arrow’s lead prospect is the Qilalugaq Project, about 900km west of Iqaluit and just 10km from the central Nunavut Hamlet of Repulse Bay. Discovered in 2003 and explored by BHP and Stornoway, Qilalugaq hosts eight kimberlites including the 12.5 ha Q 1-4 pipe complex — the largest known kimberlite in the eastern Canadian Arctic.

Early signs are that Qilalugaq could rival Canada’s known producers. In a technical report filed in May, 2013, North Arrow confirmed an inferred resource at Q1-4 of 26.1 million carats in 48.8 million tonnes averaging 53.6 carats per hundred tonnes. The grade is about half of what the Ekati mine comes in at, but its near-surface tonnage and proximity to tidewater is what makes it interesting. 

Even more intriguing is that early sampling of Q 1-4’s diamonds shows tantalizing signs of saturated yellow stones. If the deposit proves to have a consistent population of yellow-coloured rough; it would be the North’s first such discovery. It could also be a stunning game-changer for North Arrow, as high-end fancies can be worth $5,500 a carat, 10 to 50 times the value of clear stones.

North Arrow is planning for a $3.7 million, 1,500 tonne bulk sample this summer.  The goal is to recover at least 500 carats and get a preliminary market value on the diamonds.

“It could be transformative for the company,” says Armstrong. “A positive valuation could immediately see this becoming a development-track project,” adding that its location, a mere nine km from tidewater, gives it a huge infrastructure advantage compared to many other high Arctic potentials.

Back ‘home’ in the Lac de Gras region, North Arrow will invest $1 million this season on its Redemption Project which neighbours both the Ekati and Diavik mines. Under an option agreement with Arctic Star, North Arrow could spend up to $5 million by 2017 to earn an 80 per cent interest.

It plans an intensive ground geophysical survey of some 40 targets identified by earlier surface and airborne exploration.  Despite its location in the well-combed ground around two of the world’s premier producers, Armstrong is bullish on the potential.

“It’s what we think is the last unsourced, well-defined KIM (kimberlite indicator mineral) train in the Lac de Gras region,” he says.

A Clear Exploration Strategy

The vision that guides the Thomas dynasty has evolved considerably since the heady days of the NWT Diamond Rush in the 1990s. Gren Thomas created new juniors including Navigator Exploration Corp., Strongbow Exploration Inc., and in 2007, North Arrow.  He credits the financial backing of Lucara Diamond principal Lucas Lundin (Eira is on the board of directors of Lucara) as a pivotal step in enabling North Arrow’s progress.

Its early corporate concept was simple and crisp, outlined by Armstrong in a media interview at this year’s PDAC conference.

“The concept was to identify a number of projects that had seen significant past exploration and look at pulling them together under one umbrella,” said Armstrong.

“With a management group that had significant positive and successful experience in the diamond space in North America and Africa, we were very successful in 2013,” he said, adding that three separate financings put $13.4 million in the treasury.

“We can move projects forward appropriately and smartly and with intelligent proper exploration,” says Armstrong of the seven diamond properties currently in North Arrow’s portfolio.

“Diamonds have really attracted new investors,” says the company’s Investor and Community Relations Manager Nick Thomas. “For the first time since Lac de Gras, investors are making money.”

Lessons Learned

All North Arrow’s projects are centred on a key strategic rule: look only at prospects with an established history of upside exploration results and permitting potential.  It’s a lesson learned from a struggle North Arrow encountered in 2007 while exploring a small greenfield lithium project at Aylmer Lake, about 200km northeast of Yellowknife.

In a complicated and expensive series of events, it was ordered to stop the program when the Akaitcho First Nation filed a court injunction. It asserted that the Federal government had not properly consulted with them about North Arrow’s program, a duty the Crown had under its own land-use regulations.

North Arrow objected but the court upheld the Akaitcho injunction.  The ruling embarrassed the Crown and chilled an already cool environment for exploration in a region that has yet to achieve a land-claim settlement.  It also cost North Arrow its $1 million investment.

“I’m not going back until things change, and that probably won’t be in my lifetime,” said Thomas of areas where aboriginal claims are not clearly defined and where there isn’t some precedent of permitting success.

“This is an area I’ve worked in for over 50 years,” he said. “If we had been prevented from going there (25 years ago) there wouldn’t be any diamond mines today.”

North Arrow CEO Ken Armstrong points to the North’s vast infrastructure gaps as a key challenge for any explorer hoping to find a deposit, let alone make it a mine.

“We’re going into a wild, remote, seasonal environment.  These are things we can’t change. But, on the plus side, its elephant country with huge potential,” he adds.

At over 70 years of age, why does Gren Thomas keep at it?

“I like finding stuff, I like canoes and bush planes,” says Thomas in the soft Welsh brogue that’s stayed with him since graduating from Cardiff University as a mining engineer. He came to Canada in 1964 for Falconbridge at Sudbury and later the Giant Mine in Yellowknife.

When he struck out on his own with Highwood Resources in 1975, he tasted early success with finding the Thor Lake deposit of exotic minerals southeast of Yellowknife. It is today’s Nechalacho Rare Earth Elements Project under Avalon Rare Metals, one of the world’s most advanced heavy rare-earth projects.

In 1980 he created Aber Resources and a decade later was looking for base metals when the diamond rush hit.  In 1991, with partners Chris Jennings, the late Earl Curry and Bob Gannicott (now President and CEO of Dominion Diamonds) he moved fast to stake claims near what is today’s Ekati mine.  That ground became the Diavik mine.

“I’m not really a mining guy, in the sense of building mines,” says Thomas, honoured as Canada’s Prospector of the Year by his peers in 1999. 

“I’m basically a prospector. I do miss being out there, especially in the Yellowknife region.”

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