Shareholders of the junior diamond explorer, Margaret Lake Diamonds (DIA:TSXV) have been anxiously awaiting the results of a high-impact helicopter survey which was flown over the Margaret Lake property in the Northwest Territories over the past two weeks.
The helicopter survey, known as a HeliFALCON survey was initiated at the end of August with the idea of being able to accurately identify potential kimberlite targets.
Today the company announced that they have outlined three prospective zones which hold the characteristics that are indicative of kimberlites by interpreting ground geophysical data. Of course, these need to be drill tested to determine; one, if they are indeed kimberlite structures and two, whether they are diamondiferous.
The outcome of this expensive, but historically accurate survey is yet to be determined as the survey will now be sent to Australia for interpretation and analysis. This same helicopter survey has been used by the likes of Kennedy Diamonds (KDI:TSXV) to help them identify and, ultimately, discover diamondiferous kimberlites in the adjacent property. Most recently, Kennedy actually found diamonds in the drill core, something that hasn’t been seen since the days of Aber in the 1990’s. After that discovery by Aber, shares in the former penny stock climbed to over $30 per share.
The HeliFALCON survey was flown on 75-metre line spacings on both the Margaret Lake and Marlin properties. An option agreement between Randy Turner’s Canterra Minerals and Margaret Lake Diamonds was entered into a couple of weeks ago which will see Margaret Lake spend $1.75 million in expenditures over the next three years to earn 49% on the 26,000 hectare land package (also, subject to a $100,000 upfront cash payment and issuance of 600k shares). In order to fly over Marlin, an additional 1,500 line kilometres was flown. The cost of this extra flying has yet to be announced, but will likely be included as part of the necessary $1.75 million spend under the option agreement.
The Margaret Lake property sits to the north and west of the Kennedy ground, near their latest kimberlite discoveries. The Marlin project adjoins the Margaret Lake property to the west and continues to surround Kennady’s land to the north and west.
The three targets identified are now known as A286, A294 and Drop Lake which all lie within the narrow southwest tail portion of the Margaret Lake property. The company says these targets are defined by coincident ground gravity, magnetic and horizontal-loop electromagnetic (HLEM) anomalies for the first two, and strong HLEM plus historical airborne anomalies for the third. Additionally, a preliminary review of data from the HeliFALCON survey showed a gravity response that relates to the two historical ground gravity targets.
The next steps for the company are to get the analysis of the HeliFALCON survey back, refine the drill targets further and then go in and test them with the drill bit.
Diamonds are some of the most challenging and expensive to discover, but with the help of new technologies these companies exploring today have slightly better odds of success than their predecessors 25 years ago.
Given the fact diamonds are so difficult to explore for, these companies offer some of the highest leverage (highest risk-reward) in the exploration business. Margaret Lake has a market cap of ~$5 million so it is especially leveraged.
We are shareholders in Margaret Lake and they are an advertiser which means we are biased. Always do your own due diligence.