Core Drilling

Core drilling has been used at Chidliak regularly and the next work programme should at least contain a big component of core drilling. Greenfield exploration is now completed. Chidliak will be considered brownfield for any exploration work on it.

Taking a step back, one should look at all the various drilling techniques and focus on what will be next.

Types of drilling:

Rotary Air Blast (RAB) - This has not been used at Chidliak, but has been used in Botswana for Peregrine Diamonds. It is basically a very inexpensive technique and the main goal is to get some results that possibly confirm kimberlite and/or more kimberlite indicator minerals (KIMS). It is not necessarily for getting any sort of diamond content. Diamonds in the micro class usually need some caustic processing. KIMS are usually much larger in comparison to diamonds and can be sampled from the RAB material to determine if further work is necessary on the property and if more detailed drilling techniques are needed.

Heli - RC - Reverse circulation drilling - The heli part of this equation is a helicopter based drill. The equipment itself is light enough to be able to hook up to a helicopter to move from target to target in a very timely fashion. At Chidliak, they were drilling up to 1 target each day. The RC drill itself is a drilling unit that has a cylindrical tube in the centre of drill that is used to suck up or vacuum up any of the RC Chips. The chipped material is created by friction on the bit to the ground at the end of the bit. The mineralized kimberlite gets broken up into these chips and gets sucked up the tube. The diamonds in the material themselves could get significantly broken. The point of the RC drilling is really 3 fold. The first one is to determine if it is kimberlite. The second is to determine if there are diamonds contained in the pipe (broken or not). The third is to determine if there are good number of diamond stones just as an indicator for potential grade. Chidliak used an heli-rc rig to basically eliminate as many anomalies as possible. The surprise was that many of the anomalies turned out to be kimberlite and also turned out to be diamond-bearing. The depth of an heli-rc rig can only drill close to 30 metres down. It is basically a tease of the kimberlite and can easily miss multi-phase or complex kimberlite pipes.

LDD - RC - LDD means Large Diameter Drill. Same concept as a heli-rc rig...just at a much bigger level. A big 22 to 26 inch pipe is used to suck up the broken chips. At the bottom of the drill is usually a tri-cone bit. The unit and set up is quite large and moving it from target to target is very cumbersome and needs to be planned ahead. In the north, it is best and usually restricted to moving by ice only. This is why LDD RC drilling occurs in the cold of winter (Feb/Mar/Apr). The unit will create some breakage of stones..but the purpose is still get a good sample of macro diamonds to confirm both grade and a valuation model created. A breakage report is usually standard when doing LDD RC drilling.

HQ Core drilling - HQ is just a standard that is used in Core drilling. There are other standards as well. Core drilling is basically what it says. It will try and bring up core in tact and the resulting core is placed in those core trays located in core shacks. This gives both the geologist, geophysicist and geotechnical engineer access to a data set that represents a 3D point in space within the mineralized body. The geologist can look at all the geological features within the core, including kimberlite intersections, nodules, etc. The geologist can also get samples processed for mineral content. The geophysicist can look at the magnetism/gravity and other physics related features of the material. The geotechnical engineer can look at the quality of the material...whether it is all broken up, intact and also can do further testing on strength (compressive, etc.). The results can help the geotechnical engineer determine pit wall slope angle and for underground, the maximum stope size. This type of drilling gives the best detail...but lacks huge tonnage which is needed to find enough carats to get a parcel worthy of a valuation model.

Now, taking a step forward, where does Chidliak sit?

The latest technical report recommended a few things:

1 - Geotechnical drilling of the CH6 and CH7 country rock surrounding the pipes to help with pit slope angle calculations. This requires core drilling.
2 - Deep piece points (can be done in conjunction with #1) and aims to find the boundary of the kimberlite pipe at depth. This requires core drilling.
3 - Further internal drilling of the pipe. Specific to the high grade cylindrical core at CH6 and the new R and S regions at CH7. This basically will try to align the correct tonnage/volume with the associated value and grade per carat. R and S are currently assigned to the lowest CH7 values (Domain 2) and that could change in the future with this type of drilling. A bit of caustic and micro population curve analysis on the results will also be useful. This requires core drilling.
4 - Internal deep drilling. This is basically used to try and extend the depth of the known pipe further into the earth. This requires core drilling.
5 - Converting material to the indicated category - More diamond parcels from CH6 and CH7 are needed for a more refined valuation model. CH6 also needs to confirm macro grade at depth. This requires LDD RC drilling and possibly some trenching at surface (gets more parcels for the valuation model).

The latest conference call on the PEA recommended:

1 - Brownfield drilling is now in play now that the PEA has confirmed that the top portions of CH6 and CH7 can pay for a mine. With this in mind, you can now go to some of those other pipes that may have complex phases that wasn't found during the initial drilling and explore some more. Many of the kimberlites are not at a stage to do a bulk sample and need more core drilling done before any further decisions can be made. Some of these pipes have only had a 20 metres of heli-rc drilling completed on them. Core drilling is the next logical step for the potentially economic kimberlites and a handful of pipes that just don't have enough information to quantify them as potentially economic.  Every single pipe will get looked at in detail. CH-61 is a clear example of a pipe that hasn't had any drilling at all and has had some very interesting kimberlite float material that was compelling enough to do some gravity measurements over the pipe.

Next steps:

The project could look at doing some serious bulk sampling work to progress it to a feasibility (PFS or FS) type stage.
The project could look at some serious core drilling (geotechnical, deep, internal definition and brownfield exploration).
The project could look at doing both of these tasks.

The critical path toward a mine is basically the construction of the 160 km all weather road. That requires a more defined detailed study (FS level) for the road itself and the arduous journey of permitting that same road. These tasks probably have already started and will continue until they are completed and construction of the road itself can start.

Results of any brownfield drilling could create some permutations as to the last 20 km's of that all weather road. That may put brownfield drilling up the priority list for this very reason.

The final next step may be to actually get 2 Core drill rigs going for the next winter program (Feb/Mar/Apr/May) and focus on the many tasks that the core drill rig can accomplish. Without doing any bulk sampling, the results of the geotech drilling, internal definition drilling and deep drilling could material increase the NPV and IRR of the project through another PEA.

Once a road is built, a DMS unit is set up, the cost of bulk sampling many of these pipes to obtain parcels of macro diamonds goes way down.  Shipping 500 to 5000 tonnes of material all the way to the SRC in Saskatchewan for DMS processing and diamond recovery versus creating a concentrate onsite and shipping a resulting 50 to 100 tonnes of concentrate material to the SRC for final diamond recovery is quite a significant difference.