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September 11, 2002 New Nadina Explorations Limited
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| Kettle River Resources Ltd | KRR |
| Shares issued 4,853,611 | Sept 5 2002 close $ 0.14 |
| Wednesday September 11, 2002 | Street Wire |
| Street Wire by Will Purcell and New Nadina (NNA) 10,528,992 close Sept. 6, 2002 $0.07 |
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| George the believer Stewart continues to hold out hope for his diamond play just south of Lac de Gras, as the years pass and his partners move on to other ventures. His New Nadina Explorations Ltd. has picked up a slice of the old DHK property that was big news in the early days of the Lac de Gras diamond hunt. The original DHK property was one of several blocks acquired in 1992 by three companies that became known as the DHK group; Kettle River Resources Ltd., Dentonia Resources and Horseshoe Gold Mining Ltd. At the time, Mr. Stewart was president of Kettle River and a director of Dentonia, and although the DHK property turned out to be the poor cousin compared with the WO claims that host the Tli Kwi Cho pipe, Mr. Stewart seems reluctant to let the DHK block and its diamondiferous kimberlites slip away. | |
| The DHK companies granted Kennecott Canada an option to earn a stake in the three blocks, and the exploration arm of Rio Tinto quickly made the DHK properties its top priority, especially after it turned up the prospective Tli Kwi Cho pipe. The DHK trio were hot items with speculators in 1993 thanks to that discovery, and things looked promising on the other properties as well, as Kennecott discovered a swarm of kimberlites that year. The result was a market frenzy that carried Kettle River's stock from a dime early in 1992 to nearly $20 by June of 1993. Around that time, Mr. Stewart tried to revive New Nadina with a diamond promotion as well, but he did not have Kennecott to help things along with that company's Saskatchewan play. Nadina struggled to the $1 mark at the height of the Saskatchewan promotion in early 1994, but the company was always the weak sister to the high-flying Kettle River. Kettle's stock was still trading for about $12 in August of 1994, when Kennecott revealed the disastrous results of a bulk sampling program at Tli Kwi Cho. That news immediately sent Kettle River's stock plummeting to $2.50, and it has slid slowly since then. Mr. Stewart's Cinderella promotions came to a halt, as both Kettle River and New Nadina have become ugly stepsisters in recent years. | |
| Some still believe that Kennecott botched the sampling program at Tli Kwi Cho. Dentonia's Adolf Petancic continues to hold out hope that the complex kimberlite contains a zone with higher grades and diamond values, although he is having a hard time selling others on the story. Nevertheless, it appears that even Mr. Petancic has given up hope that the DHK property has any real diamond merit, as Dentonia and its partners have effectively walked away from the property. | |
| Regulations in the Northwest Territories require that a property be taken to a mining lease after 10 years, or the claims would lapse. For the DHK property, that period was due to expire this year. In fact, portions of the property were allowed to lapse, and the ground has been snapped up by other explorers. Rather than follow that route, Mr. Stewart and New Nadina took the claims to a 21-year lease, with Kennecott and the DHK group of companies transferring their interest to New Nadina. That will leave New Nadina with a potential 100-per-cent stake in the much smaller DHK block, which will now be named the Monument property. | |
| There were four kimberlites discovered on New Nadina's property during the 1990s, with three of them found in the heyday of the play, in 1993. Kennecott turned up some promising indicator minerals on the DHK block, including several G-10 pyrope garnets, and the company found a number of promising drill targets that might be the source of the mineral trains. Success was not long in coming. The DD-17 kimberlite proved to be diamondiferous, and its diamond counts were arguably the best of any find in the immediate area. Kennecott processed about 950 kilograms of kimberlite from the pipe, recovering 188 diamonds, including 54 macro-sized stones. The macro-to-micro ratio of 0.40-to-1 was roughly the same as had been found at Tli Kwi Cho, but the total diamond content was far less at DD-17, which was a discouraging sign. | |
| Unfortunately, DD-17 was arguably the best of the lot. Kennecott processed about 230 kilograms of kimberlite from DD-42, just a few kilometres to the north, coming up with 44 diamonds, including nine macros. The total diamond content was somewhat less than at DD-17, and the proportion of macrodiamonds was more modest as well. As a result, not much more work was done after the initial drill program had completed. The third find that year was the DD-39 kimberlite, about one kilometre southeast of DD-17. Kennecott processed 217 kilograms of kimberlite from the find, recovering 39 diamonds, including seven macro-sized stones, a result roughly similar to that at DD-42. | |
| Kennecott had thought enough of the three properties that it was optioning from the DHK group that it bought shares in all three companies in 1993, and that included paying $16 per share for $2-million worth of Kettle River's stock. That optimism quickly soured after the Tli Kwi Cho bust, and Kennecott seemed to lose heart for the DHK hunt, especially after a number of rich finds were made on the Diavik ground to the north, where Kennecott also had an option deal. | |
| As a result, work tapered off on the DHK property after that, although a fourth kimberlite was found in 1999. The DD-2002 kimberlite is a 2.2-metre wide, land-based dike that was found in the immediate vicinity of DD-42. Once again, the kimberlite proved to be diamondiferous. Kennecott processed a seven-kilogram batch of rock, recovering six microdiamonds. That seemed to be an encouraging result, although the sample size if far too small to make the result statistically meaningful. Kennecott apparently did not deem the dike worthy of more work, despite the result. | |
| In addition to the discoveries on Nadina's new property, there were several other finds in the immediate vicinity. Kennecott was also the operator on the Lac de Gras property owned by SouthernEra Resources, and it found five kimberlites over the western portion of that property, within 10 kilometres of the New Nadina ground. The EG-03 kimberlite, discovered in 1993 just a few kilometres to the north of the Monument property, proved to be barely diamondiferous, as 150 kilograms of kimberlite produced just a single microdiamond. Just to the northeast of Monument, the EG-01 kimberlite also yielded just one microdiamond, from a 46-kilogram batch of kimberlite, and a 490-kilogram sample from EG-130 produced a similar result. Kennecott also processed 19 kilograms from EG-02, but it proved to be barren. The best of the finds on the SouthernEra property was made in 1999. The EG-05 body produced 27 microdiamonds and one macro from 129 kilograms of kimberlite. | |
| If Mr. Stewart hopes to renew interest in his project, New Nadina will have to foot the costs of an exploration program, but the company has just modest plans for the moment. New Nadina will be reviewing the survey requirements for the 21-year lease, and it will be trying to track down the locations of the previous drill holes and exploration grids. There remain a number of unexplained anomalies on the property, and these will be re-examined as well. Nevertheless, it will take more than that to actually drum up a bit of speculative interest in what was once touted as a hot diamond play, but which has been just cold news for several years, until now. | |
| To get a new promotion going, New Nadina will need some more cash. At the end of May, the company had a working capital deficiency of about $2,000, despite it having sold 1.2 million of its nickel shares this spring. Mr. Stewart plans to combine the Monument exploration program with one over the Naket property, near Migration Lake. New Nadina shares Naket with its sister company, Kettle River, but sadly, there is no great pot of cash to be found in the Kettle either, although it did have about $265,000 in working capital at the end of April. | |
| New Nadina has plans to complete a series of non-brokered private placements to get things rolling, but until that happens, Monument may well wind up collecting dust in much the same way as has Naket, which is a 5,200-hectare property located 65 kilometres to the northeast of the Ekati and Diavik mines. Mr. Stewart picked up the play for his two struggling companies in 2000, after a new interpretation of a 1992 geophysical survey identified a number of targets. A limited work program turned up more anomalies and that apparently led to more staking, but so far, that has been it. | |
| Unlike the Monument property, which is within a kimberlite cluster, discoveries near the Naket ground have been few and far between. The closest discovery was PL-02, made by Kennecott a few years ago, just south of Pellat Lake, on ground held by the DHK group of companies, including Kettle River. The discovery got Mr. Stewart's promotional juices flowing in 2000, when he described the dike as having "significant size and diamond content." Kennecott seemed to have another opinion, as the company gave its interest in the find to the DHK group of companies, in exchange for a 9.9-per-cent stake in DHK Diamonds Inc. The PL-02 dike is about 25 kilometres west-southwest of the Naket project. Further southwest, De Beers and BHP Billiton found a large cluster of kimberlites on their respective properties, centred about 40 kilometres to the southwest of Naket, but few of them are of much interest. Meanwhile, the most northerly Diavik finds are about 25 kilometres to the south of the New Nadina and Kettle project, but they never amounted to much as well. As a result, it could well be the Monument project, not Naket that will wind up as New Nadina's top diamond play. | |
| Mr. Stewart is hopeful, but at this stage, most investors seem rather doubtful that either project will ever amount to much. The thinly-traded New Nadina managed to post a three-cent gain when it last traded on Sept. 6, closing at seven cents. Things have not been much better for Kettle River, which closed unchanged on Sept. 5, at 14 cents. | |
| Permission to publish this document received compliments of Canjex Publishing Ltd. www.new.stockwatch.com | |