Kimberlite exploration in Northwestern Australia
Lithoquest Diamonds CEO highlights recent news in the company's North Kimberley Diamond Project.
Lithoquest Diamonds Inc. (TSX.V: LDI) is focused on discovering a new field of diamond-bearing kimberlites on its 100% owned North Kimberley Diamond Project in Western Australia. The company has identified several high-priority target areas for follow-up in 2019 and is actively developing additional zones of interest.
Jim Gordon: Hi, I'm Jim Gordon, and you're watching Market One Minute. Joining us is Bruce Counts, the CEO and Director of Lithoquest Diamonds. Let's start with a general overview or synopsis of Lithoquest.
Bruce Counts: Well, Lithoquest is a Canadian diamond exploration company. It was formed in 2016, went public in late 2017 and really based on really strong evidence that there are diamond-bearing kimberlites on the North Kimberley Diamond Project, and kimberlites are the primary source for diamond. So, we have a 100% of the project, which is located in northwestern Australia. It's right on tide-water, and it's accessible by a seasonal route.
Jim Gordon: And I've got to ask, why diamonds?
Bruce Counts: Well, the easy answer to that is diamond deposits can be exceptionally valuable. I think a great of example that would be the Ekati Diamond Mine, which is located in the Canadian Barren Lands. So, it's a harsh environment. But, Ekati went into production in 1998, and for the first few years of its operation, it was making $600 million a year in profit. That's amazing.
The second reason is that global diamond resources are really diminishing, and the producers, and there are quite a few, are looking at the dwindling resources and the expectation is that diamond production over the next decade is going to drop pretty dramatically. The flip side of that is that very little diamond exploration has been going on for the last 10 years, and that means that there's no advance projects for the producers to really sink their teeth into.
That means the producers are becoming really aggressive in trying to find and acquire new assets. That means there's a whole bunch of willing partners or buyers, and we're pretty confident that our project has all the right elements that will attract one of the producing companies.
Jim Gordon: What were some of the highlights for Lithoquest in the first year of operation?
Bruce Counts: Lithoquest had a great year. In 2018, we made some really important discoveries that underpinned the evidence that we have that there are diamond-bearing kimberlites on the property.
Jim Gordon: Okay.
Bruce Counts: First of all, we found diamonds in two different locations on the property, but perhaps the most important achievement was the discovery of kimberlite, the primary source for diamond in our very first drill program.
Jim Gordon: No diamonds found or recovered in the kimberlite you found, why is this discovery still so important?
Bruce Counts: That's a great question. Look, kimberlites almost always occur in clusters or fields, and a cluster might be a few kimberlites or more than a hundred. It's common for a productive field of kimberlites to have barren bodies, as well as economic bodies. In fact, less than 10 per cent of kimberlites in a productive field tend to be economic. So, it's no surprise that the first kimberlite we found was barren, but as I said, kimberlites occur in clusters. So, where there's one, there's almost always more, and there's abundant evidence that there are diamond-bearing kimberlites on the North Kimberley Diamond Project.
Jim Gordon: Can you talk to us about what's driving, will be a driving value for Lithoquest in 2019?
Bruce Counts: Absolutely. Well look, discovery drives value. So, our focus will be finding more kimberlites in 2019, and more importantly, trying to vector in on the ones that have the best opportunity for being economic. We've identified nine areas on the property where there's really compelling evidence that there's a diamond bearing kimberlite present, and so our focus will be to develop and then drill test targets in each of those nine areas.
Jim Gordon: Thanks for joining us today, Bruce.
Bruce Counts: My pleasure.