A small mineral exploration company may be in the early innings of a new diamond discovery in Canada-- but will need some capital and further evidence to support its theory.

On Thursday, CanAlaska Uranium (TSXV:CVV) announced the staking of 75 kimberlite targets in Saskatchewan’s NW Athabasca Basin. The targets were developed from a 2011 airborne magnetic survey by the Saskatchewan Geological Survey. CanAlaska’s VP of Exploration, Dr. Karl Schimann, identified the targets with help from Dr. Jules Lajoie, CanAlaska’s contract geophysicist.

Saskatchewan’s Athabasca Basin is famous for uranium mining, not diamonds. The portion of the Basin staked by CanAlaska is under-explored because the basement rock is covered by 1-2 kilometres of sandstone. That basement rock is classified as Rae Province, the same group of rocks which host diamondiferous kimberlites in Nunavut. In addition, kimberlite fields in Alberta appear to be on the same structural trend as CanAlaska’s targets.'

Source: CanAlaska

"We have some distance to go to establish whether these targets are kimberlites, and then whether they contain diamonds,” Peter Dasler, CanAlaska’s CEO, cautioned.

In conversation, Dasler said he expects to do some field work and indicator minerals sampling at the targets this year, and said drilling could potentially start in 2017.

“This is quite an amazing story,” veteran junior mining analyst John Kaiser said on Allan Barry Reports Friday. “[CanAlaska] realized there are all these discrete magnetic anomalies in here which have no obvious explanation. Nobody went into this area, because it is simply the most boring and useless part of the Athabasca Basin.”

CanAlaska follows the prospect generator business model of generating exploration targets and finding partners to pay for the drilling, and they will probably look to joint venture these kimberlite targets.

The company has other priority exploration projects in its portfolio including the NW Manitoba project, adjacent to Cameco’s McArthur River uranium mine and new Fox Lake discovery. There’s also the NW Manitoba project on option to Chuck Fipke’s Northern Uranium, and other projects and royalties.

CanAlaska has 22.068 million shares outstanding and last traded at 16.5 cents for an approx. $3.64 million market cap. The company had $1.2 million in cash at October 31, 2015.

Small mining and exploration stocks such as CanAlaska are very risky and volatile and not suitable for most investors. This article is intended for informational purposes only and is not investment or professional advice of any kind. As of Friday February 19th, 2016, CanAlaska is a new CEO.CA advertiser. At the time of writing, the author has no positions in any of the companies mentioned in the article, which could change without further notice. Read CanAlaska’s SEDAR profile and Annual Information Form for more information and important risk disclosures.