Kennady Diamonds (CVE:KDI), which controls 100 percent of the Kennady North diamond project, plunged in midday trades after announcing the diamond recovery results from the Kelvin 25 ton mini-bulk sample.
Shares fell 26 percent to C$5.88 at 2:22 p.m. in Toronto, trimming this year's advance to 12 percent.
The Kelvin total sample grade of 2.16 carats per tonne is in line with the company's guidance of 'better than 2 carats per ton' and confirms the potential for Kelvin to host a high grade diamond resource, Toronto-based Kennady Diamonds said in a statement today.
But it said that the number of larger diamonds in the sample is lower compared with previous Kelvin samples. A higher frequency of larger diamonds in previous samples resulted in sample grades well above 2 carats per ton.
"The sampling and treatment methods used for the mini-bulk sample will be reviewed to understand the reasons for this," Kennady's chief executive officer Patrick Evans said in the statement.
The sample was processed by dense media separation at the Geoanalytical Laboratories Diamond Services of the Saskatchewan Research Council.
The company said that it expects to recover a further 28 ton mini-bulk sample as part of the current summer/fall Kelvin drill program and this sample will be dispatched to the SRC for processing as soon as possible.
"We expect the diamond recovery results from this second mini-bulk sample to aid in understanding the diamond size frequency distribution of the Kelvin kimberlite," Evans added.
The 25 ton sample was recovered by drilling from ice in an area where the Kelvin kimberlite outcrops at surface or where the country rock cover is relatively thin. Prior to processing, the Kelvin sample was divided into four batches based on four distinct kimberlite phases.