8.5 million tonnes at 1.6 carats per tonne
and US$63 per carat
Shares Issued and Outstanding:
47,156,970
TSX-V: KDI
TORONTO, Dec. 12, 2016 /CNW/ - Kennady Diamonds Inc.
("Kennady", the "Company") (TSX-V: KDI) is pleased to announce the
completion of a maiden Mineral Resource estimate for the Kelvin
kimberlite, located at the Company's 100 percent owned Kennady
North Project, NWT, Canada. An
Indicated Mineral Resource of 13.62 million carats of diamonds is
contained in 8.50 million tonnes of kimberlite, with an overall
grade of 1.60 carats per tonne and an average value of US$63 per carat. The resource has been calculated
with a 1mm diamond bottom cutoff size, which is considered a
reasonable cutoff for a commercial mining scenario. The resource
was determined through the collective efforts of Aurora Geosciences
Ltd., Mineral Services Canada Inc., SRK Consulting Inc., and JDS
Energy & Mining Inc., who were engaged by the Company to
participate in the exercise.
President and CEO of Kennady Diamonds Dr. Rory Moore stated: "Our resource announcement
represents the culmination of a focused evaluation program that was
intensified over the past two years. The internal geology and
diamond distribution within Kelvin are now so well-constrained that
our model meets the stringent requirements to qualify as an
indicated resource. I congratulate our team in taking Kelvin
from discovery to a 13-million carat Indicated Resource in the
first four years of our company; quite possibly a record timeframe
in the history of Canadian diamond exploration."
Kelvin Indicated Mineral Resource
The Kelvin kimberlite is located approximately 280 kilometers
east-northeast of Yellowknife, and
is immediately adjacent to the Gahcho Kué Diamond Mine operated by
the De Beers Group and Mountain Province Diamonds Inc. Kelvin was
one of several small kimberlite dykes with associated
volcaniclastic blows discovered by the De Beers-Mountain Province
Joint Venture in 2000, and were only proven to have volume
potential after drilling by Kennady Diamonds began in 2012. Kennady
has defined Kelvin as an 'L-shaped' kimberlite pipe with a strike
length 700 meters and a vertical thickness ranging from 70 meters
in southeast limb, to 200 meters in the north limb. The body ranges
from 30 to 70 meters in width with upper and lower contacts
plunging 12 to 15 degrees to the north-northwest and remains open
to the northwest.
The database that was used to evaluate Kelvin included 40,041
meters of core drilling from 175 holes, microdiamond samples
totaling 20.23 tonnes, an initial 44.8 tonne mini-bulk sample, and
two bulk sample drilling programs that collected 1,067 tonnes of
kimberlite (the bulk sample mass differs slightly from the masses
reported in news releases on August 26,
2015 and September 19, 2016;
this is due to adjustments to the bulk density model for Kelvin on
which the mass calculations are partly based). The bulk sampling
recovered 2,262 carats (+1 DTC sieve class) of diamonds for
valuation. Mineral Services Canada Inc. provided guidance on the
evaluation program at Kelvin and recently completed a comprehensive
review of geological, microdiamond, bulk sampling, and valuation
results in order to estimate a maiden Indicated Mineral Resource
for the Kelvin kimberlite, as provided in Table 1.
Table 1: Indicated Mineral Resource Estimate for the Kelvin
Kimberlite.
Tonnes1
(million tonnes)
|
Grade2
(carats per tonne)
|
Carats
(million carats)
|
Value3
(US $/carat)
|
8.50
|
1.60
|
13.62
|
63
|
|
Notes: 1 –
resource estimate represents the body delineated to a depth of
roughly 510 meters; 2 – grades are expressed as recoverable
diamonds above a 1mm bottom size cut-off. 3 – base average value is
derived by applying a base case model (see news release, November
15, 2016) to recoverable diamond models for each geological domain
in a mining scenario. Some rounding error may occur in the values
reported.
|
|
The NI 43-101 standards and Canadian Institute of Mining and
Metallurgy guidelines stipulate that a Mineral Resource needs to
have a "reasonable prospect of economic extraction". Kennady
engaged JDS Energy & Mining Inc. ("JDS") to assess whether this
criterion is satisfied. Using Whittle™ open pit optimization
software, JDS modeled a pit shell to demonstrate potential economic
value of kimberlite resources to a depth of 330 meters, covering
approximately 85% of the in-situ resources (6.8 million
tonnes, 11.5 million carats). JDS then employed Maptek™
software to analyze the remaining 1.6 million tonne geologic
resource below the open pit shell for potential economic extraction
via underground mining. To determine the reasonable prospect of
economic extraction, JDS assumed the use of both open pit and
underground mining methods. Subsequently, JDS has concluded that
the full 8.50 million tonne Indicated Mineral Resource satisfies
the "reasonable prospect of economic extraction" criterion.
Mineral Resources with "reasonable prospects for eventual
economic extraction" are not mineral reserves, and have no
demonstrated economic viability. The JDS assessment does not
support an estimate of mineral reserves, as a pre-feasibility or
feasibility study is required for reporting of mineral reserve
estimates.
Kennady will be filing a National Instrument (NI) 43-101
Technical Report on the Kelvin Indicated Resource within 45 days of
this news release.
Status Update for the Preliminary Economic Assessment
The discovery of Faraday 3 in early 2016 and the addition of
significant volume to Faraday 2 from drilling earlier this year,
provides the option for the Faraday bodies to be further evaluated
for economic potential. In view of this development, JDS has
recommended that the Company advance the Faraday bodies to resource
status before completing the Preliminary Economic Assessment
("PEA"). As a consequence, the Board of Kennady has approved the
expansion of the PEA to include the Kelvin and Faraday bodies and
the study is now expected to be completed in late-2017.
Winter Exploration Program
Kennady has committed to the recovery of a bulk sample from the
Faraday kimberlites for the 2017 winter program, and preparation
work is already underway. A geophysical program has also been
designed to evaluate exploration targets on new mineral leases
recently acquired from GGL Diamonds (see news release,
August 18, 2016). Additional
exploration drilling will be considered upon the successful
completion of the bulk sampling program.
About Kennady Diamonds
Kennady Diamonds Inc. controls 100 percent of the Kennady North
diamond project located in Canada's Northwest
Territories. Kennady North is immediately to the north and
west of the Gahcho Kué Diamond Mine, a joint venture between Beers
Canada (51%) and Mountain Province
(49%), which started production in late 2016.
Kennady Diamonds aims to identify a resource along the Kelvin –
Faraday kimberlite corridor of between 13 million and 16 million
tonnes at a grade of between 2 and 2.5 carats per tonne and also to
identify new kimberlites outside of the corridor. The Kelvin –
Faraday corridor is a target for further exploration. Tonnage
estimates are based on the drilling completed to date. The
potential quantity is conceptual in nature as there has been
insufficient drilling to define a mineral resource and it is
uncertain if further exploration will result in the target being
delineated as a mineral resource.
Qualified Persons
This news release has been prepared by Dr. Rory Moore, P. Geo., President and
CEO of Kennady Diamonds. The Indicated Mineral Resource estimate
for the Kelvin kimberlite was prepared by Mineral Services Canada
Inc. under the supervision of Dr. Tom
Nowicki. Dr. Nowicki is a Professional Geologist and an
independent, external Qualified Person to Kennady Diamonds under
National Instrument 43-101. The statement of Reasonable
Prospect of Economic Recovery was prepared by JDS Energy and Mining
Inc. under the supervision of Mr. Daniel
Johnson P. Eng. Mr. Johnson is a Professional Engineer and
an independent, external Qualified Person to Kennady Diamonds under
National Instrument 43-101. Dr. Nowicki and Mr. Johnson have
reviewed this release and approve of its contents. The technical
contents of this news release have been reviewed and approved by
Dr. Tom McCandless, P. Geo., an
independent director of Kennady Diamonds and Qualified Person under
National Instrument 43-101.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) has reviewed or accepts responsibility for the
adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
This news release includes certain information that may
constitute "forward-looking information" under applicable Canadian
securities legislation. Forward-looking information includes, but
is not limited to, the Company's strategic plans, future
operations, future work programs and objectives. Forward-looking
information is necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known
and unknown risks, uncertainties, and other factors which may cause
the actual results and future events to differ materially from
those expressed or implied by such forward-looking information.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking
information. All forward-looking information contained in this
press release is given as of the date hereof and is based upon the
opinions and estimates of management and information available to
management as at the date hereof. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as required by law.
SOURCE Kennady Diamonds Inc.