By Marc Davis
Fortune favours the bold, so they say.
This has so far proven true for the advanced-stage diamond explorer Dunnedin Ventures Inc. (TSX.V: DVI).
However, Dunnedin’s good fortune has merely been a steady build-up to the company’s long-awaited shot at glory.
An upcoming drill program in Nunavut -- with a planned start date of late March or early April -- has the potential to make history. Dunnedin is betting that Northern Canada’s expansive diamond fields have yet to reveal at least one more world-class diamond discovery.
And if it can be found, Dunnedin has recruited the one man who knows how best to unlock the secret to finding at least one more multi-billion dollar diamond deposit.
Canadian diamond-hunting guru Chuck Fipke first made headlines around the world with his discovery of what became the Ekati diamond mine in the Northwest Territories in the early 1990s.
It was Canada’s first ever major diamond discovery. Fipke’s tiny exploration company had succeeded where other much bigger players, including De Beers, had failed.
Pictured above: The multi-billion-dollar Ekati Diamond Mine
Though he is now in the sunset years of his career, Fipke believes he may be on the verge of striking pay dirt once more – this time in Nunavut’s under-explored diamond fields. This is why Dunnedin is about to embark on its first exploratory drill program ever. And it’s Fipke who has hand-picked about 12-15 high-priority targets.
Drilling Diamond Dreams: ’The Big Picture’ Comes into Focus
So what do investors know so far that affords credence to Fipke’s tantalizing theory?
First of all, Dunnedin has already had some success in its hunt for diamonds. In this regard, the company has established a high-grade, near-surface inferred diamond resource at the heart of its sprawling property. This essentially represents a proof of concept. It represents the potential to monetize the company’s existing discoveries.
In fact, two of the deposits that Dunnedin is working on demonstrate an average grade of one carat per tonne of what appear to be high quality, commercial-sized diamonds. In essence, this means that their grades and diamond qualities measure up favourably against producing diamond mines. Yet the full extent of their diamond riches has yet to be explored.
Pictured above: Some of the gem-quality diamonds that Dunnedin has found
That said, most of Dunnedin’s investors are on-board in the hopes that the company will hit the ball out of the park. I doubt that anyone is dreaming of the company merely becoming modestly successful – which essentially amounts to a fallback position.
This is why it’s time for the Big Show by way of the upcoming drill program. In other words, it is Fipke’s turn to step up to the plate. And if anyone can produce a Hollywood-style home run in the deciding game of the World Series, it will be him.
In fact, he’s excited enough about the company’s best diamond prospects to have even compared them favourably to the richly-mineralized Ekaki diamond mine that he discovered in 1991.
By which I mean, he says they have similar geochemical (minerals-in-soil) fingerprints to the diamondiferous rock structures that became Canada’s first-ever diamond mine. More on this in a moment.
It’s also worth noting that his geological detective work on Dunnedin’s expansive property has been exceptionally revealing to date. To everyone’s delight, Fipke has had the same kind of early-stage success that he had when he hunted down Ekati’s glittering riches. His geological sleuthing techniques suggest that Dunnedin has favourable odds of big-league success with its upcoming drill program.
Here’s his assessment from studying thousands of till samples collected in the vicinity of the company’s geological targets: the geochemistry of Dunnedin’s best prospects suggests that they contain plenty of clear, high-quality commercial-sized diamonds.
“Very few places in the world have geochemistry this good. In fact, it’s very similar to the geochemistry of the richest pipes at the Ekati diamond mine,” Fipke told an investment audience last year.
Such a declaration has jaw-dropping implications for Dunnedin. This is because Ekati is one of the richest diamond mines in the world. And it yields many of the world’s best quality diamonds, too.
Yet, it won’t be an easy task to find another Ekati. Dunnedin’s expansive land holdings host well over a hundred potential kimberlite pipe targets, and several drill-proven diamond-bearing kimberlite dikes. As an aside, dikes are also mined in the rich diamond fields of Africa, where they are known as “fissure” deposits.
Solving the Puzzle to Finding Hidden Diamond Riches
It bears repeating that this legendary diamond explorationist has personally selected all 12-15 high-priority drill targets after studying their geological profiles in his own world-renowned laboratory, CF Minerals.
So how has Fipke managed to single out the very best prospects when the statistical odds of a kimberlite pipe hosting diamonds is only one in ten?
He used his own proprietary form of diamond indicator mineral analysis to identify and study the geochemical profiles of each kimberlite target. And this has allowed him to predict the potential of each rock structure to host diamonds.
Fortunately, these are the same till sampling and mineral ranking techniques that he used to great effect at Ekati. Fipke has since refined and improved upon these techniques thanks to the benefit of over 20 years of additional diamond data and experience.
At Ekati, he had a comparable challenge -- to discover which five of the 150 kimberlites discovered at Ekati contained very large concentrations of diamonds.
Now Fipke has selected his best picks -- each one representing a possible multi-billion dollar geological jackpot.
Dunnedin is blessed with the opportunity to make one or more multi-billion-dollar diamond discoveries among Canada’s least explored diamond fields. This follows three years of systematic, exhaustive exploration work that has yielded some exceptional exploration results so far.
As a fallback position, the company fortunes are buoyed by several proven diamond deposits that are all constrained by size, but nonetheless exhibit economic potential.
More specifically, an inferred resource of around 4,000,000 carats averaging over one carat per tonne has been outlined at the Kahuna and Notch kimberlites. Drilling into these bodies is still very shallow, but Dunnedin has stated that drilling these kimberlites to greater depths could add multiples of the original resource estimate, thereby prospectively creating much larger diamond resources.
Among the diamonds found to date are some large ones, including a reconstructed gem that weighs in at 13.4 carats.
Also, there still exists the prospect of outlining another significant resource at the under-explored PST kimberlite, where Dunnedin’s sampling has generated impressive diamond grades of over 4 carats per tonne – some of the highest grade diamond results reported in Canada.
Collectively, all three of these smaller deposits may prove to be a company-maker, assuming the high reported grades remain consistent.
However, Dunnedin’s shot at making a world-class diamond discovery in the coming weeks are significantly boosted by the involvement of diamond-finding guru Chuck Fikpe.
Indeed, if a glittering treasure trove is found, Dunnedin can also take heart from the fact that Nunavut is a mining-friendly Canadian jurisdiction that stands to benefit immeasurably from meaningful economic development.
Not surprisingly, investors have been embracing Fipke’s belief that Dunnedin holds the promise to be a sensational success story in the making; the company’s share price is ascendant and volume has been gathering momentum.
For sure, it’s time to buckle up your seatbelts. That’s because Dunnedin appears destined to take its shareholders on the roller-coaster ride of a lifetime.
About the Author: Marc Davis has a deep background in the capital markets spanning 30 years. He is also a longstanding financial journalist, having worked for leading digital financial news agencies in North America and in London’s financial centre. He is also a former business reporter for CBC Television.
Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post and AOL.