MINING NEWS: De Beers options properties in northern Canada to two junior explorers

Gary Park

Global diamond mining giant De Beers has optioned properties in northern Canada to two junior explorers.

Vancouver-based Pure Gold Minerals has negotiated an agreement covering 6,300 square miles north of Norman Wells in the Northwest Territories, while Montreal-based Ditem Explorations, with a mere stock market value of C$1.4 million, has gained access to 1,684 square miles on Southampton Island in Nunavut Territory.

South Africa’s De Beers through its Canadian subsidiary holds rights to more than 42,000 square miles in Canada, of which 36,000 square miles are in Nunavut and has two Canadian mines under development — Snap Lake in the Northwest Territories and Victor in northern Ontario.

De Beers Canada President Richard Molyneaux said partnerships such as those with Pure Gold and Ditem are “necessary for the rapid development of some of our properties and a key component of our growth strategy in Canada.”

De Beers has conducted till sampling and an airborne magnetic survey of the Nunavut property and Pure Gold said it intends to carry out similar work on the Northwest Territories’ prospects.

Molyneaux said 43 percent of De Beers global exploration budget of US$92 million this year will be spent in Canada with the eastern Arctic topping the most active list.

Pure Gold must spent C$3.95 million over three years on exploring the Colville Lake diamond property in the Northwest Territories to earn an 85 percent interest, although De Beers can take back a 70 percent stake by paying Pure Gold double its costs and arranging development financing.

The 156-permit property is just south of Diamondex Resources’ Len West exploration.

Based on stream sediment sampling by De Beers in the 1970s and in 2003 the “potential presence of kimberlite targets” has been indicated, Pure Gold said.

The Nunavut arrangement requires Ditem to spend at least C$1 million within three years on two blocks to acquire a 100 percent interest.

De Beers can buy back up to 60 percent of the properties at any time by paying a pro rata amount equal to three times Ditem’s expenditures. It will also have the right to market any diamonds from the area.