CH6 is the crown jewel kimberlite and makes the economics work.
*Information in this current blog is based on information obtained up to mid 2018 and should be considered legacy at this time and should no longer be relied upon.*
See the 'upside potential' update at the end of this blog post.
April 7th - 2016 Update - A press release was issued today updating the inferred and TFFE categories of the resource. Here is a link to the details -- 2016-04-07 -- Overall tonnage increased by 40% and carat count increased by 33%. The grade in the main zone was parsed back a bit to include variation in grade throughout and also the occasional country rock dilution. A much higher grade zone was also defined in the southern part. The high grade zone has a 4.16 carat per tonne grade and is nearly vertical, so this zone will also influence any expansion at depth and a potential underground component. The high grade zone is also more dense, so you get more tonnage per volume.
Sept 9th, 2015 Update - Field program for 2015 has been completed. 2 single core drill holes were drilled to a depth of 260 metres. These were considered 'near-vertical' holes and located in the south portion of the kimberlite. A total 367 kg's of material was sampled from these 2 holes. There was also 6 previously drilled holes that had an additional 715 kg's of material sent for testing.
July 29th, 2015 Update - Field program for 2015 has been announced. 2 single core drill holes to a depth of 260 metres will be drilled in the south portion of the kimberlite body. They are also selectively sampling 700 kg's of material from 6 previously drill core holes. The target of this program is to convert 1 million tonnes and up to 2.5 million carats of material from TFFE to inferred.
Check out the NPV calculation for Chidliak that is just based on 250 metre open pit of CH6 --> NPV Calculation #1
This is one of the highest margin rock in the world.
As per compared to development projects, it may stand alone with the exception of a few pockets of very high grade Uranium deposits.
CH6 was discovered in the summer of 2009. There have been lots of information on CH6, so I will just show the very latest.
For clarification on the valuation see this post -- CH6 valuation update
Current valuation stands around CAD$250 per carat.
From the January 2015 Technical report:
Inferred Tonnage 3,320,000 @ a grade of 2.58 cpt (carat per tonne) on the 1.18 mm seive.
TFFE tonnage (Tonnage for future exploration):
3,200,000 to 4,380,000 tonnes to a maximum depth of 380 metres.
It is open at depth below 380 metres and doesn't show any sign of narrowing.
The inferred resource includes tonnage from near surface to 250 metres below.
The number easily show potential of $5 billion in the upper half of this pipe alone.
Several projects in Canada have transitioned to underground and some start as mainly underground. Renard in Quebec have long term plans to go up to 1 km down into the ground to recover diamonds.
What if CH-6 extends down to 1 km? What could the numbers look like:
Depth - 1000 metres
Tonnage - 20 million
Carats - 50 million
In-situ Value = US$10 billion.
Ramp development - 7 km's of underground ramp
Cost of entire ramp - CAD$70 million.
Time to develop entire ramp to full depth - 6 years.
In 6 years, you could have full access to US$10 billion worth of diamonds.
Many opinions out there that indicate that 50 million carats makes a diamond mine 'world class'.
There is potential in this one pipe alone to garner that title.