Grizzly plans big Alberta drill program
2007-11-20 20:15 ET - Street Wire
by Will Purcell
Brian Testo's Grizzly Diamonds Ltd. is planning a major drill program on its properties in the Buffalo Hills region of Northern Alberta. The company is wrapping up a private placement that will cover the cost of the drilling, which will be the largest kimberlite exploration effort in the region in several years. Grizzly's play draws promotability from the pipe cluster discovered by Ashton Mining of Canada Inc. that Shore Gold Inc. and Diamondex Resources Ltd. are now adopting.
The plan
Mr. Testo had several targets outlined on his Buffalo Hills play nearly a year ago, but Grizzly decided not to run the risk of having a modest program fail to yield a discovery. Instead, the company completed more surveying and now expects to have up to 25 priority targets ready for drilling by the end of the year.
The first batch of targets were on the Grand Cub Aidan and Preston upon the Wolverine claim blocks, which are immediately north and west of the main Buffalo Hills property, now controlled by Diamondex and Shore. Many of the newest targets are turning up on the Smoky the Bear property, immediately south of the former Ashton property. It includes some claims just metres from several of the existing diamondiferous Buffalo Hills pipes.
Mr. Testo said that drilling would start in January. That should leave Grizzly with about two months to test its targets. Winters days in the area northeast of Peace River are frequently cold, with temperatures plunge below minus 40 on occasion, but spring arrives much earlier than it does in Canada's Arctic. By mid-March, the daytime sun is packing a warmer punch and maximum temperatures start regularly crawling above freezing, turning dirt roads into mud. As a result, area explorers typically wrap up their winter drilling by late March.
Grizzly is selling one million shares at $1 and 1.25 million flow-through shares at $1.20 each, which will add $2.5-million to the company's treasury. Mr. Testo said he was planning to spend $1.5-million of the money on his diamond hunt, and would be willing to increase the expenditure to $2-million if necessary.
The encouragement
Grizzly started preliminary work that will allow it to prioritize its geophysical targets further. Ashton looked over much of Grizzly's ground during the 1990s, but Mr. Testo thinks he has the higher resolution data needed to yield new discoveries. He has a point, as Ashton continued to discover kimberlites on its former play several years after finding most of its bodies, by using newer geophysical data.
Diamondex and Shore picked up an option on Ashton's Buffalo Hills project from Stornoway Diamond Corp. several months ago, based on their belief that the project resembled the large-tonnage, low-grade Fort a la Corne district in Saskatchewan. Ashton's results support the expectation.
Ashton completed a large mini-bulk sample of its K-14 pipe and collected smaller tests of several other pipes in the area. The test of K-14 yielded a grade of 0.12 carat per tonne, and tests of two other bodies managed comparable results. One other Ashton result stands out, as its grade of over one-half carat per tonne is markedly higher than any Saskatchewan pipe. Unfortunately, it is also much smaller than most of the Saskatchewan pipes, at less tan two hectares.
All of those encouraging pipes are within 50 kilometres of Grizzly's properties, and some of its targets are within one kilometre of other Buffalo Hills kimberlites. Most of those latter bodies yielded few diamonds, but they prove the area contains kimberlites, and Mr. Testo is willing to spend a few million dollars proving Grizzly's claims have diamonds as well.
Grizzly closed unchanged at $1.05 Monday on 12,800 shares
