- Three kimberlites discovered in first two drill programs
- Led by experienced diamond industry executives
- Producers are now seeking to replace rapidly depleting resources
What Lithoquest Diamonds does:
Lithoquest Diamonds Inc (CVE:LDI) (OTCMKTS: CWVWF) is an explorer focused on hunting for the notoriously difficult-to-find precious stones at its wholly-owned North Kimberley Diamond Project (NKDP) in Western Australia.
The company acquired the asset, which now spans 5,000 square kilometres, in 2017 and began trading on the Toronto venture exchange the same year, having raised C$5 million.
The project lies in the northern portion of the flat-lying Kimberley Plateau and is road and tidewater accessible. More notably, the company has already found kimberlites there - the primary source rocks for diamonds - and believes the project is host to a field of these diamond-bearing volcanic pipes.
Three kimberlite discoveries were made in drill programs in 2018 and 2019, while kimberlite boulders have been identified over a wide area. Target names are 1805, 1826, 1804 and 0702.
Kimberlites occur in clusters that can go to a few to hundreds, but generally, less than 10% of a productive diamond field is economic.
Production of the sought-after stones is expected to plateau or decline as soon as this year, 2020, so the industry is nervous about meeting demand.
Finding a mine can be extremely worthwhile. In its corporate presentation, Lithoquest cites the example of the Ekati diamond mine - Canada's first surface and underground diamond mine, 200 kilometres from the Arctic circle.
Dia Met Minerals had a 29% stake in the project and its shares went from C$0.65 to C$65.00 in just 18 months based on the discovery of significantly diamondiferous kimberlites. The Ekati mine was constructed for US$900 million in 1998 and the debt was paid off, also in 18 months.
How is it doing:
In January this year, the difficulties encountered in the diamond space were shown, when Lithoquest reported that analysis of the 1805 and 1826 kimberlites discovered in 2019 showed no diamonds.
But Bruce Counts, the company's chief executive, explained that although no diamonds were recovered from the two kimberlites, there was "ample" evidence that there are diamond-bearing bodies in the new field the company has discovered on the North Kimberley Diamond Project.
Several high-priority target areas were identified at the site for follow-up, including at target 1827 where the firm has narrowed down the source of abundant Kimberlite Indicator Minerals (KIM's) and diamonds to a small area.
In April this year, the firm closed a C$250,000 non-brokered private placing, issuing over 8.3 million shares at C$0.03 a pop, with proceeds to be put towards general capital purposes, it said.
And in the same month, Lithoquest named seasoned finance professional Michael Sweatman as a new independent director. He will also serve as chairman of the group's compensation committee and be a member of the audit committee.
Inflection points:
- Further exploration activity and results
- Diamond price activity
What the boss says:
Lithoquest chief executive Bruce Counts, who was himself involved as a junior geologist in the discovery of the field which hosts the Ekati mine, spoke to Proactive at the tail end of 2019 and said he was fortunate at Lithoquest to have a team around him who were great explorers.
"At the end of the day, in diamond exploration, there's no real magic bullet. It's really hard work, it's using modern techniques, it's having a great deal of understanding," he said.