New northern riches? [Diamond mining Marketing Feature] – by Marc Davis (Vancouver Sun – April 8, 2013)

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It was like a scene from an Indiana Jones movie. After the engine failed, the helicopter plunged into a rain forest canopy. But the dense vegetation prevented the crippled machine from crashing to Earth, sparing the lives of those on-board.

Among its three occupants was a young geologist called Buddy Doyle, who found himself hanging upside down in the upturned helicopter. The pilot was badly injured. So Doyle grabbed the damaged radio and blurted out a call for help. The survivors spent the night huddled in the cockpit, hoping and praying that someone had heard their distress call. Fortunately, they were plucked to safety by a helicopter crew from a rival company the following day.

Doyle’s brush with disaster happened over 20 years ago, when he was working for mining giant Rio Tinto Plc, exploring for gold in remote Papua New Guinea. But his nightmarish ordeal wasn’t for nothing. He was eventually credited with discovering one of the world’s richest gold finds: the Lihir mine, which has produced well over 20 million ounces of gold to date.

As his reward for toiling for years in steaming jungle terrain, where he suffered bouts of malaria and foot rot, Dolye was hurried off to a place that seemed like a different planet in comparison – Canada’s frozen northern tundra.

This is where his sharp geological acumen and dogged determination served him well once again. As exploration manager for Kennecott Canada Exploration Inc. – a subsidiary of Rio Tinto PLC – his assignment was to make a world-class diamond discover, which was no easy task in the barren, frozen vastness of the Northwest Territories (NWT). However, he eventually overcame daunting odds to locate what later became the multi-billion-dollar Diavik diamond mine. For his efforts, he was paid a measly $5,000 bonus.

After watching others get rich from this spectacular find, Doyle decided it was time to strike out on his own. And if he was going to continue risking life and limb, he might as well be better compensated, he figured. So he joined a small diamond exploration mining junior called Arctic Star Exploration Corp.

For close to a decade, he has been trying to recapture the glory of his earlier geological successes. But it’s been a tough slog – literally and figuratively. Malaria and foot rot have been replaced with hypothermia and frostbite. And a succession of hot leads in frigid locations have disappointed time and time again. But he now believes that he may finally be on the verge of striking pay dirt – once more.

He’s not alone in his assess ment. Even Chuck Fipke likes what he sees. Fipke is a famed geologist who reputedly became an overnight billionaire, after he discovered in 1991 what evolved into Canada’s first-ever diamond mine. Ironically, this epic find was the catalyst for Rio Tinto’s decision to rush Doyle to Canada to seek out a similar diamond bonanza.

In recent times, Fipke’s laboratory in Kelowna, B.C., has processed some of the exploration data for Arctic Star (TSX.V: ADD) – a TSX Venture Exchange publicly-traded company.

A specialist in the field of geochemistry, Fipke relied extensively on this geological sleuthing technique to track down the source of what later became the Ekati diamond mine in Canada’s Northwest Territories (NWT).

This gives Fipke a privileged insight into the prospects of success for Arctic Star’s best drill targets (known in geospeak as a “high-priority anomalies”), which are in the same NWT region as Ekati. The primary target was selected, in part, because of its excellent geochemistry. This means it is ideally located at the head of a prolific “dispersion train” of diamond indicator minerals (one that also includes tiny diamonds).

“It looks like the geochemistry is coming from the area where the anomaly is,” Fipke says. “It’s definitely worth drilling, for sure.”

In other words, the approximately 40-kilometre-long indicator mineral trail comes to an abrupt end in the immediate vicinity of Arctic Star’s initial high-priority drill target. This situation is comparable to a trail of crumbs leading back to a loaf of bread.

Even though Arctic Star’s upcoming drill program – which is scheduled to commence in mid April – will cost around a $1-million dollars, it may end up being a small price to pay, especially considering that an economic discovery would make this upstart company the toast of Canada’s mining investment community. After all, the NWT’s three diamond mines have collectively produced over $25-billion worth of these glittering gems so far.

For the rest of this article, please go to the Vancouver Sun website: http://www.vancouversun.com/technology/northern+riches/8210006/story.html

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