The wait is over. Everything is now in place to hit the
jackpot – by discovering billions of dollars worth of diamonds in
one of the world‘s most attractive diamond exploration regions:
Finland. Today, Arctic Star Exploration Corp.(TSX.V: ADD; US: ASDZF; Frankfurt: 82A1) announced the start of an
eagerly-awaited exploration program at its 100% owned Timantti
Project in Finland.
Last week, the company closed its agreement to acquire an 100%
interest in this promising project. It took the company more than
one year to do so. Following last week‘s announcement, the
company‘s stock jumped +41% on 3.7 million shares – never before
did the company trade so many shares on a single day. Obviously,
investors have high hopes for this European project, but waited for
the official closing.
This is not only an early-stage exploration play, but also a
well-advanced development project with 2 diamond-bearing kimberlite
pipes (called the Black Wolf and White Wolf) already discovered on
the district-scale property. More diamondiferous pipes are highly
probable on Arctic´s property and are just waiting to get
discovered.
With exploration – especially geophysics and drilling – to start
now (according to today‘s news), investors could very well fall in
love with this sexy diamond play today as it‘s widely known that
it´s all about drilling. Betting on a drill success is what
provides the rare opportunity to the extreme high rewards that the
diamond exploration space is known for. No other commodity sector
creates riches as fast as the diamond sector. Discovering diamonds
with the drill bit is like hitting the jackpot on a slot machine,
however the good news is that it‘s already confirmed that there are
diamonds on this property. This is what makes this project so
attractive. And a major "discovery" worth billions of dollars could
just be around the corner.
In Good Company: 4 High-Carat Personalities Are Also Betting On
A Success
Scott Eldridge
Most recently on Tuesday, Arctic announced major management
changes. Scott Eldridge has become President & CEO. He was a
Co-Founder of Euroscandic International Group Inc., a private
investment banking and consulting company with a tag line that says
it all: “Natural Resource Finance“. Eldridge served as President
and CEO between 2008-2016, during which time he has been
responsible for raising in excess of $500 million CAD in combined
equity and debt financing for mining projects around the globe,
varying from exploration to mine construction financing. He was
involved in transactions with the following companies:
First Majestic Silver Corp. ($1.4 billion
market cap.), Silvercrest Mines Inc. ($154 million
takeover by First Majestic), Integra Gold Corp.
($590 million takeover by Eldorado Gold), Probe Mines
Ltd.($440 million takeover by Goldcorp), Endeavour
Silver Corp. ($340 million market cap.), Excelsior
Mining Corp. ($191 million market cap.), Newstrike
Capital Inc. ($140 million takeover by Timmins Gold),
Pediment Gold Corp. ($137 million takeover by
Argonaut Gold), Esperanza Resources Corp. ($69
million takeover by Alamos Gold).
What better President & CEO for Arctic can you wish for when
considering that Eldridge had this stunning success in the past? As
most of the above transactions led to takeovers and mergers with
major mining companies, one can certainly say that he has an
instinct for exploration projects to eventually become mines.
However he also deserves much respect for picking so many winners
not in gold´s last bull market but during the last bear market: All
of the above transactions happened after 2010. Rockstone asked
Eldridge for a statement on why he believes the Timantti Project is
so attractive. His answer cuts right to the chase and gives me
confidence of being a shareholder:
“I am thrilled to be a part of Arctic‘s executive
team as we are on the brink of our initial exploration program on
our 100% owned Timantti Diamond Project in Finland that will
include drilling. Timantti represents a feverish opportunity for
shareholders to gain exposure to one of the last known
district-scale diamond fields, that coincidentally lies within
proximity to excellent infrastructure and has year-round access.
These operational benefits of the district will enhance Timantti‘s
economics should Arctic discover an ore-body. Finland consistently
ranks high on the Fraser Institute‘s international rating survey.
Having been involved with mining projects in Northern Europe in the
past, to me Finland is the Nevada or Quebec of Europe as a premier
mining jurisdiction with significant local support programs. Our
world-class exploration team has discovered multiple diamond mines
in the past. The stars appear to be aligning in
Finland.“
Roy Spencer
In July 2017, when Arctic announced its plans to acquire the
Timantti Project in Finland, Roy Spencer joined the company as a
Director. He was largely responsible for discovering the Black Wolf
and White Wolf diamond pipes, which now belong to Artic. Spencer
was also largely responsible for discovering the
multi-billion-dollar Grib diamond pipes in Russia, some 450 km east
from the Wolf pipes in Finland. Both the Wolf and Grib diamond
pipes are “connected“ to eachother as both occur on the same
Karelian Craton (very old areas of the earth´s crust which are the
world´s dominant source of diamonds). In July, Roy Spencer
commented:
”Kimberlites are likely to occur in fields – also
known as clusters – which typically contain 30 or more separate
kimberlites. The Wolf kimberlites are just the first discoveries in
a more extensive cluster. There is good evidence for the existence
of this field in the public domain. This data shows regional
distribution of kimberlitic indicator minerals and diamonds in
surficial tills. The Exploration Reservation will allow Arctic Star
to explore the entire region.“
Spencer is certain that more diamond pipes can and will be found
on Arctic´s Timantti Property in Finland.
Buddy Doyle
Buddy Doyle is also a legendary diamond mine discoverer. He was
largely responsible for discovering the multi-billion-dollar Diavik
diamond pipe in Canada. The 2 diamond gurus, Roy and Buddy, have
collaborated previously on bringing into production the Liqhobong
Diamond Mine in Lesotho, South Africa. As arguably 2 of the most
accomplished diamond explorers in the world are now uniting to work
on another diamond project together, this certainly grabs our
attention and you should follow closely what they are up to now.
This could turn out big. Arctic´s Executive Chairman, Pat Power,
said the following in an interview in late July 2017:
”It was about 2006 when Buddy Doyle looked at this
project we just took into the company. We made an offer for a
percentage of it. But they wanted 12.5 million Euros for 25% of it,
which we didn´t have the ability to do back then. Then 2008 came
and everything became really difficult for all resource companies,
specifically for diamond companies. It became very, very difficult.
Roy Spencer, who you could call the father of the Timantti Project,
found the “Grib” pipe, 450 km east in Russia as the president of
Archangel Diamond Corp. in 1996. That turned out to be a mine,
which started producing about 2 years ago. But as usual in Russia,
he got kicked out before it became productive. He traced chemistry
trails to the Finnish border and all those trails originated in
Finland somewhere.“
Jared Lazerson
On Tuesday, Arctic also announced the appointment of Jared
Lazerson as a Director. Pat Power had the following to say:
”We are excited with the addition of Jared Lazerson
to Arctic’s Board of Directors, his market, technology and
industrial mineral mining experience are a welcome addition to the
Board. The momentum he has created with the recent development of
MGX Minerals is particularly relevant as we advance Arctic’s newest
diamond exploration property.”
Lazerson is also the CEO of MGX Minerals Inc., a company he grew
from $2 million to a current market capitalization of around $100
million, and a 2017 high in excess of $200 million. In February
2017, Lazerson also joined the Advisory Board of Far Resources
Ltd., whereafter the company appreciated strongly from about $0.10
to currently $0.50. Shareholders of Arctic now hope for a similar
performance.
Another Grib Diamond Mine in Finland?
Full version / After Lukoil
reported nearly $340 million USD in revenue from sales of around
4.5 million carats of rough diamonds from its Grib
Mine in Russia in 2016, the mine was sold for $1.45
billion USD to Russia‘s largest privately-owned financial company.
(Photo source)
Read the full report with more details on the Timantti
Project in Finland and the Grib Diamond Mine in Russia here.
Is Arctic Star zeroing-in on diamond riches in Finland?
By Marc Davis
There are tantalizing clues as to the possible whereabouts of
billions of dollars worth of buried diamonds in the rough.
Since their discovery a few years ago, these geological clues have
become known as the Black Wolf and the White Wolf.
Located in northern Finland, they consist of twin diamond-embedded
rock formations — scientifically referred to as kimberlite pipes.
And they have kept their secret for many millions of years.
Now the wait is finally over. For the first time ever, their
geological DNA is being closely scrutinized in the hopes that it
will point the way to a considerably more richly endowed nearby
diamond deposit.
Initially discovered in 2005 by a small mineral exploration
start-up called European Diamonds plc, the White Wolf and Black
Wolf pipes are the first to emerge in a region that no doubt hosts
more diamond-laced discoveries.
More on this in a moment.
A decade ago, the economic potential of these twin pipes was probed
by way of some small-scale drilling. But the distribution of the
micro diamonds among the rock samples taken proved to be too
inconsistent to justify additional drill testing. So the project
was abandoned and has since languished — until now.
Veteran diamond exploration company Arctic Star Exploration Corp.
(TSX.V: ADD) has come to Finland
to test a scintillating theory: the two Wolf kimberlites can point
the way to a glittering treasure trove at the heart of one of the
world’s last under-explored diamond fields.
To this end, the company has acquired the White Wolf and Black Wolf
diamond pipes and the geologically-prospective exploration grounds
that surround them. This sizeable property can be found in the
under-explored region of Kuusamo.
Known as the Foriet Property [now called Timantti
Project], Arctic Star’s exploration permits will now be
the hunting grounds for a whole cluster of kimberlite pipes — any
one of which could be the mother lode.
By studying all the geological characteristics of the initial White
Wolf and Black Wolf discoveries, Arctic Star’s geologists believe
they can zero-in on a swarm of proximal pipes. After all, this is
the methodology that has proven phenomenally successful in Canada’s
Northwest Territories (NWT).
It’s an exploration approach that also helped unearth several
large, prolifically-mineralized Russian diamond mines that are
located less than 500 kilometres to the east of the Foriet
Property. Interestingly, these mines were only found relatively
recently.
Can History Repeat Itself?
When another small diamond exploration company called Dia Met
Minerals discovered the Point Lake diamond pipe in the NWT in 1991,
there was considerable fanfare.
The stock rallied from mere pennies to over $67 the following year.
By then, a small handful of far richer diamond pipes had been
located nearby. They later became the multi-billion-dollar Ekati
diamond mine — the first of its kind in Canada.
In fact, it turned out that Point Lake was worthless because it
contains too few diamonds to be mined. But that didn’t matter.
What did matter is that the Point Lake discovery was a technical
success that led geologists to eight proximal kimberlite pipes —
all of which proved to be rich with diamonds.
Since the commercialization of Canada’s inaugural diamond mine,
another nearby mine called Diavik has also come into existence.
Together, they have yielded over $25 billion worth of diamonds so
far.
Fortunately for Arctic Star, its Vice President of Exploration is
Buddy Doyle, who was integral to turning Diavik into a world-class
mine in the 90s. This is when he was exploration manager for
Kennecott Canada Exploration Inc. — a subsidiary of the world’s
biggest mining company, Rio Tinto plc.
Now he hopes to do it again. Only this time around, he also has the
benefit of vastly improved diamond-hunting technology and a wealth
of geological savoir faire. In recent years, he has traversed much
of the frigid vastness of the NWT looking to replicate his earlier
success at Diavik.
His search has now brought him and Arctic Star to Finland where he
is applying the same diamond sleuthing expertise to one of the
world’s last diamond-hunting frontiers.
Why the Wolf Pipes are Key to Revealing New Diamond
Fields
Fortunately, there’s plenty of scientific encouragement for
Arctic Star’s quest. For instance, the Foriet Property is close to
the Russian border and is part of the same tectonic plate that
already hosts several Russian diamond mines.
Known as the Karelian Craton, this crustal feature is geologically
comparable to the Slave Craton in Canada’s Arctic, which is home to
the Ekati and Diavik diamond mines. In other words, it’s proven to
be geologically fertile for economic diamond discoveries.
Here’s how kimberlite pipes are found in both the Karelian and the
Slave cratons: They are tracked down by following trails of
indicator minerals. Many millennia ago, these tiny, colourful
stones were eroded from kimberlites by glaciers and then deposited
down ice.
The thicker the dispersion train, the closer the indicator minerals
are to their diamondiferous bedrock source. In other words, finding
diamondiferous pipes this way is analogous to following a trail of
crumbs to a loaf of bread.
The Black Wolf and White Wolf pipes were discovered by this very
same process.
Again, it’s worth mentioning that this is how the kimberlite
pipes that constitute the Ekati and Diavik diamond mines were
found.
Indicator mineral trails that are comparable to the one that leads
to the White Wolf and Black Wolf pipes can also be found elsewhere
on Arctic Star’s property. This supports the theory that other
proximal kimberlite pipes are still waiting to be discovered.
In fact, diamond fields usually involve 10-30 kimberlites but can
in some cases include as many as 100 or more. A cluster of pipes
usually resembles a shotgun blast spread out over an area in
diameter of up to 100 kilometres in diameter.
To this point, Finnish federal government geological data shows the
presence of an 80-kilometre-wide “cloud” of indicator minerals
dispersed across a wide area that is roughly centred on the Wolf
pipes. This suggests that Arctic Star property encompasses a whole
new cluster of kimberlites.
Additionally, the company’s till sampling program utilizes the same
sampling and mineral ranking techniques that were used to find the
Ekati and Diavik mines. This means that Arctic Star can predict the
potential of certain kimberlite targets to host diamonds with a
high degree of confidence.
Along with till sampling, Arctic Star’s accomplished
diamond-finding geologists also intend to use aerial geophysical
surveys and follow-up ground-based geophysics to identify new
kimberlite prospects on its new property.
In the near term, Arctic Star is revisiting the economic potential
of the Wolf pipes.
To this end, the company is beginning by sampling 14 core holes
with a total length of 530 metres of kimberlite at Black Wolf that
was drilled over a decade ago and was never assayed for
diamonds.
Truth be told, the size potential of the Wolf kimberlites has still
to be determined. A ground-based geophysics program will go a long
way to solving this mystery. And more drilling still needs to be
done to better understand the overall grade of the deposit.
This re-evaluation of the Wolf pipes is made easier due to the fact
that these deposits are located near paved roads and in relative
close proximity to a power grid, as well as logistical
supplies.
Also, there is a skilled labour force nearby in the
economically-underdeveloped town of Kuusamo. This pro-mining
community also benefits from its own airport and is only an
eight-hour drive from Helsinki.
It would therefore be far less expensive to commercialize one or
more diamond mines in this region than in a remote, inhospitable
location like the NWT.
Arctic Star’s President Patrick Power comments, “We plan to
evaluate the economic potential of the Wolf pipes as an immediate
priority.
“However, the greatest potential for success at the Foriet Property
is the likelihood of finding more diamondiferous kimberlites, any
one of which could be richly endowed enough to be economic, and to
eventually become a mine.”
In terms of geopolitical risk, the Fraser Institute recently ranked
Finland as the most attractive jurisdiction for mining investment
anywhere in the world. So this too represents a major de-risking
project booster.
Investment Summary
The company is also still active in the NWT, where it is
involved in a joint venture to explore and develop the T Rex
Project for diamondiferous kimberlite pipes.
So the company’s overall risk profile is mitigated by the fact that
it has two separate exploration projects underway in two different
jurisdictions.
On a technical note, Arctic Star has only about 54.7 million shares
outstanding, representing a relatively tight share structure. In
the eventuality of positive news flow, such a situation typically
acts as a potent catalyst to higher share price valuations.
All told, Arctic Star is gearing-up for a busy exploration season
that could yet take investors on the ride of a lifetime.
About the Author: Marc Davis has a
deep background in the capital markets spanning 25 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. Disclaimer: This online
publication is intended for information purposes only. No statement
or expression of opinion directly or indirectly, is an offer,
solicitation or recommendation to buy or sell any of the securities
mentioned. The cost of Marc Davis’ research costs are defrayed by a
nominal payment from Arctic Star Exploration Corp. Additionally
Marc Davis has been issued stock options by Arctic Star Exploration
Corp.
Management &
Directors
SCOTT ELDRIDGE
President & CEO
Mr. Eldridge has over 10 years of experience in finance and
general management in the mining sector. He has a B.B.A. from
Capilano University, and an M.B.A. from Central European
University. He co-founded Euroscandic International Group Inc., a
private company offering investment banking and advisory services
to natural resource companies where he served as President and CEO
from 2008 to 2016. During his time in the industry he has been
responsible for raising in excess of $500 million CAD in combined
equity and debt financing for mining projects varying from
exploration to construction financing around the globe. He has held
several directorships and executive roles with both private and
public companies.
PATRICK POWER
Executive Chairman
Patrick Power is a seasoned venture capitalist and financier
with over 20 years of experience as a stock market professional and
as director of public companies. He has been President and CEO of
Arctic Star since its inception in 2002. Additionally, Mr. Power
serves as a director of other mineral exploration companies. Arctic
Star benefits from Mr. Power’s wealth of experience as a savvy
dealmaker, an adept financier and as a tireless, results-driven
leader of dynamic public companies. The company enjoys Mr. Power’s
large network of contacts within the industry, his enthusiasm and
his efforts as a member of the audit and remuneration panels.
BUDDY DOYLE
VP of Exploration, Director
Buddy Doyle has 25 years experience in mineral exploration. He
worked for Rio Tinto PLC for over 23 years, most recently he was
Exploration Manager/Vice President of Kennecott Canada Exploration
Inc. (owned by Rio Tinto), in charge of diamond exploration in
North America. He was a key member of the Kennecott Exploration
Australia team that discovered the multi-million ounce Minifie gold
deposits at Lihir in 1987-1988 and led the team which discovered
the Diavik diamond deposits in 1994-1995. Few geologists have seen
2 projects from discovery through to decision to mine. Mr. Doyle is
recognized by his peers in the exploration industry as an authority
on diamond exploration and kimberlite geology, and has
authored/co-authored numerous papers on these subjects. He was
awarded the 2007 Hugo Dummitt Award for excellence in Diamond
exploration. Since leaving Rio Tinto Mr. Doyle remains active in
the diamond sector through consultancy and non-executive
directorships. Mr. Doyle brings to the company a disciplined
scientific approach to mineral exploration and managerial skills
that have a proven track record. He holds a BSc in Applied Geology
from the Queensland University of Technology.
ROY SPENCER
Director
Roy is a GSSA Member and a Fellow of the AusIMM. Roy joined De
Beers in 1966 and has been involved with exploration and deposit
evaluation for gemstones and other commodities throughout his
career. Roy’s tertiary education was at the University of Natal and
Rhodes University in South Africa, and is a member of the
Geological Society of South Africa and a Fellow of the Aus.I.M.M.
As technical director of Peregrine Diamonds, he discovered the
first kimberlites on the Pilbara craton in Western Australia in
1989, and as Leader of the Owners Team for Archangel Diamond
Corporation he was largely responsible for the discovery of the
world class Grib kimberlite in far northern Russia (February,
1996). In 1998, Roy created and raised the seed finance for Ilmari
Exploration Oy to explore for gold, base metals and diamonds on the
Karelian Craton in Finland. Ilmari went public in 2000, and
discovered the Lentiira kimberlite cluster in central Finland in
2003.
In 2006, as CEO of London-based diamond explorer European
Diamonds, Roy led the Owners Team which brought the Liqhobong
kimberlite (Lesotho) into commercial production on time and under
budget. In mid-2007, Roy left European, a company which had evolved
into a successful mid-tier diamond producer and marketer after
having raised £23 million over a 6-year period. Since that time Roy
has continued in gemstone exploration and deposit evaluation in
Africa, Finland and western Russia for a variety of junior and
senior mining companies.
BINNY JASSAL, CPA, CGA, FCCA
Chief Financial Officer
Binny Jassal brings over 20 years of accounting and management
experience to the Company. Mr. Jassal is a member of Certified
General Accountants in Canada, fellow member of Association of
Chartered Certified Accountants in London, England and holds
Certificate in Accounting and Finance from Ryerson University
Toronto. Previously, Mr. Jassal has worked in various accounting
positions (including public companies) within the manufacturing, IT
and telecommunication sectors. Mr. Jassal joined the Company in May
2006 and has been an important member of the team working on the
financial and corporate side of the operations.
Jared Lazerson
Director
Mr. Lazerson is CEO and Director of lithium and magnesium miner
MGX Minerals (CSE:XMG). For the past 5 years, Mr. Lazerson, has
seen the market capitalization grow from $2 million CAD to a
current value of $100 million CAD and a 2017 high of over $200
million CAD. Mr. Lazerson has been responsible for all aspects of
growth of MGX including acquisitions, financing, operations and
technology development. MGX Minerals has developed some of the most
advanced and low-cost technology in the world for lithium
extraction from brine by eliminating the solar evaporation step,
thus reducing processing time from 2 years to 1 day. Mr. Lazerson
holds a B.A. in International Relations from the University of
Pennsylvania.
THOMAS YINGLING
Director
Thomas Yingling is a successful seasoned venture capitalist who
benefits from over 19 years of experience running resource based
public companies. He has been a Director of Arctic Star since its
inception in 2002. Mr. Yingling has served for almost two decades
as President of Brahma Communications Corp., an investment
consulting firm that specializes in corporate finance, investor
relations and strategic corporate planning for publicly traded
companies. He has served as President and CEO and/or a director of
other resource based public companies.
SEAN CHARLAND
Director
Sean Charland is a seasoned communications professional with
experience in raising capital and marketing resource exploration
companies. He has helped raise over C$ 150 million for a variety of
venture listed and private companies in mineral exploration and
mining, technological and health sectors with the majority of the
focus on mineral exploration and mining. His network of contacts
within the financial community extends across North America and
Europe.
BILL FERREIRA
Director
Mr. Ferreira is an exploration geologist with over 30 years
experience in gold, base-metal and diamond exploration in Canada.
Mr. Ferreira holds a Master of Science degree from the University
of Manitoba and a Bachelor of Science degree from the University of
Minnesota, Duluth. Mr. Ferreira’s employment experience includes
work for Noranda Exploration Canada, Esso Minerals Canada, Getty
Mines, Falconbridge Ltd., Granges Exploration, Canmine Resources
Corp. and San Gold Corp. Mr. Ferreira is past president of the
Manitoba Prospectors and Developers Association. Mr. Ferreira is
currently a member of the Association of Professional Engineers and
Geoscientists of the Province of Manitoba.
Company Details
Arctic Star Exploration Corp.
1111 West Georgia Street
Vancouver, B.C. V6E 4M3, Kanada
Phone: +1 604 689 1799
Email: info@arcticstar.ca
www.arcticstar.ca
Shares Issued & Outstanding: 73,862,522
Chart
Canadian Symbol (TSX.V): ADD
Current Price: $0.18 CAD (11/22/2017)
Market Capitalization: $13 Million CAD
Chart
German Symbol / WKN(Frankfurt): 82A1 / A2DFY5
Current Price: €0.111 EUR (11/22/2017)
Market Capitalization: €8 Million EUR
Disclaimer: Please read the full disclaimer within the full
research report as a PDF (here), as fundamental risks and
conflicts of interest exist.
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