Romancing the stone, grabbing the land

A small Vancouver-based firm called the Aviat Project Joint Venture has out-foxed two of the world’s biggest diamond companies to grab exploration rights to more than seven million acres of land in the Baffin region’s Melville Peninsula.

They’ve also announced early test-sample results showing they may have stumbled across a new source of diamond-bearing pipe formations scattered about the huge area, located at the northwest edge of the Baffin region, inland from Hall Beach and Igloolik.

At a press conference in Vancouver this week, John Robins, president of Northern Empire Minerals, one of three partners in the Aviat joint-venture, said their discovery came about almost entirely by accident.

Prospectors with the Hunter Exploration Group, another joint-venture partner that Robbins is involved with, conducted a fruitless search across the Melville Peninsula in 2001, looking for signs of nickel, copper and gold.

As part of that search, they took “till” samples — piles of dirt and rock that are sent to a laboratory to be tested for their mineral content.

“As exploration goes, our work for nickel, copper and gold was a bust,” Robins said.

“But at the end of the season, with essentially no money left in our budget, we processed these till samples. In November, we got a very pleasant phone call from the laboratory,” Robbins said.

That phone call told them their samples contained large amounts of what are called “kimberlitic indicator minerals” — minerals that occur in the same places where diamonds are found.

“So a project that we had originally gone into for base metal indicators had suddenly turned into a diamond project,” he said.

Soon after that, Hunter Exploration and Northern Empire Minerals joined with a third company called Stornoway Ventures Ltd. to form the Aviat Project Joint Venture.

Eira Thomas, Stornoway’s CEO, is a respected geologist who found the Diavik diamond pipes in the Northwest Territories. The $1.25-billion Diavik diamond mine has been developed on that site. The group then put together an exploration program for the Melville Peninsula.

Meanwhile, they used a combination of guile and patience to win the necessary exploration permits from the Department of Indian and Northern Affairs.

Robins and Adam Vary, another partner at Hunter Exploration, arrived in Iqaluit late in November 2001 to ensure they were first in line when DIAND opened its doors to claim-stakers on Dec. 3 that year.

But when they got to the building, they found that employees of BHP and De Beers were already parked in two vehicles at the front of the federal government building, occupying the vehicles 24 hours a day to make sure no one got in line ahead of them.

But at 2 a.m., Vary brought a truck around the corner of the building, shining his headlights into the windshield of the vehicle driven by the BHP driver, dazzling his eyes.

At the same time, Robins leapt from a hiding place by the side of the building to become first in line at the front door. He stood there until DIAND employees opened their doors later that morning, and the Aviat Project Joint Venture got permits for the 1.3 million acres of land on the Melville Peninsula that they wanted to explore.

In the summer of 2002, the group’s exploration activities turned up 228 small diamonds taken from two separate occurrences of kimberlite they found that year on the Melville Peninsula.

In December 2002, they arrived in Iqaluit early to make sure they were first in line to stake claim to another 5.5 million acres of land.

Until this week, the group kept their discoveries secret. Stock prices for Northern Empire Minerals and Stornoway Ventures, both of which are listed on the TSX Venture Exchange, soared after the group issued a press release on Feb. 3 announcing their lab results, and the potentially diamond-rich lands that DIAND is permitting them to explore.

Company officials caution, however, that they’re a long way from being able to develop a diamond mine on the Melville Peninsula — a prospect that’s at least several years away.