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Diamond & Specialty Minerals Summary for May 31, 2023

by Will Purcell

The diamond and specialty minerals stocks box score for Wednesday was a weak 79-99-132 as the TSX Venture Exchange fell one point to 595. Patrick Power and Buddy Doyle's Arctic Star Exploration Corp. (ADD) closed unchanged at two cents on 1.39 million shares.

Arctic Star's stock has been flatlined since late last year thanks to an uncustomary silent off-season. Normally, Mr. Power, Arctic's founder and long-time chief executive officer, is a chatty Cathy about big plans in store for the coming year, but such proclamations were rarer than diamonds during the past winter. Indeed, the 2023 season has long come, and is all to soon to go, without a peep about the company's plan for the year at its Diagras project, just northeast of Lac de Gras.

Indeed, it appears Arctic Star's oft-touted plans to better delineate the big Sequoia kimberlite pipe may be delayed. Mr. Power and Mr. Doyle, Arctic's vice-president of exploration for the past 19 years, say that a dozen new holes are needed to better delineate Sequoia, adding to the six the company completed last year. Most of the needed new holes were to have been drilled in the 2022 program, but bad weather and an early spring left them uncompleted.

Investors logically assumed the rest of the holes would be finished this year, but Arctic Star now says that "this extra drilling is planned in 2023 or 2024" -- and with each passing day without word of a pending private placement to cover the cost, 2024 is looking like the safer bet.

Arctic Star also applauds its Arbutus kimberlite, a 2022 discovery, as needing more drilling, but there is no word about plans to drill it, nor the nearby Finlay pipe, a 25-year-old De Beers discovery at Diagras that had Mr. Power so intrigued last year. Finlay now merits just a single mention in Arctic Star's annual report -- and then only as a locator stake for Arbutus, which is 180 metres away. (Both of Arctic Star's new discoveries came from new-style targets developed in the shadow of old De Beers pipes, just as Mr. Doyle had expected, and as hoped, they appeared to have better diamond counts than their neighbours, although the larger tests are needed to prove the point.)

More diamond counts from Arbutus and especially from Sequoia would be helpful, and Mr. Power and Mr. Doyle would undoubtedly like counts from Finlay as well to answer the question why De Beers, which tested each of well over a dozen discoveries on the property with just a single hole, had stuck around to do seven tests at Finlay. Still, given the modest counts Arctic Star has obtained so far, an answer to all questions of economic grades will depend on the company doing a larger test.

Arbutus and Finlay are still short of such discussion, but Arctic Star is musing about "taking a large bulk sample that will retrieve more than 1,000 carats" from Sequoia. That work -- which would presumably cost several, if not many, millions of dollars -- "could be carried out in 2024," Arctic Star muses hopefully, after a permit that the company is now applying for has been granted. And, of course, after Mr. Power finds the cash to do the work.

Arctic Star's shoestring share price suggests that the market believes any bulk sampling at Diagras is still well off, and that does seem logical, since all the company has to bank on now are the diamond counts from a limited small test in 2021 and those from the larger but still small program completed last year. Indeed, if the delineation drilling is put off until 2024, the bulk sampling is likely another year away even if all goes well. The good news is that according to Mr. Power and Mr. Doyle, Sequoia's available data still suggest a commercial grade of between 30 and 70 carats per hundred tonnes.

Meanwhile, Arctic Star still has a now-you-see-it, now-you-don't co-venturer an Diagras. The most recently visible Margaret Lake Diamonds Inc. (DIA), unchanged at 1.5 cents when it last traded a board lot nearly a week ago, earned a 60-per-cent interest in and became operator of the project in 2016 by paying just over $190,000 to keep the project in good standing. It subsequently lost interest -- literally and figuratively -- diluting itself down to 18.5 per cent. Since the Sequoia discovery caught the market's eye in 2021, Margaret Lake has been keeping up with Arctic Star's cash calls. Like Arctic Star, it is low on cash and has a shoestring share price, a situation unlikely to change until exploration cash is found.

Francois Auclair's Li3 Lithium Corp. (LILI) fell two cents to 13 cents on 77,000 shares. Li3 continues to advance its Mutare lithium promotion. The company earned a 25-per-cent interest in the Zimbabwe-based property late last year and it doubled its interest to 50 per cent just last week. Now, the company is applauding surface assays of up to 4.1 per cent lithium oxide from a series of samples taken from the Nels Luck zone. These are grab samples, and of course geologists generally grab what looks good, even when they are sampling on a grid. ("We need a rock from over there. Oh my, look at this one!" the chatter can run.)

Today, the promoters are leading the chattering. Mr. Auclair, president and CEO -- and who just happens to be a geologist as well -- applauded the initial high-grade results as suggesting "the potential for high-grade mineralization at surface and at depth within the eastern section of the property." And so, he enthuses, he and his crew are "anxious to commence the 5,000-metre exploration drilling program across the property," with the Nels Luck pegmatite group looking to be front and centre in that effort.

Mr. Power's Lake Winn Resources Corp. (LWR) lost one-half cent to eight cents on 204,000 shares as the thin trader offered the market a sign of life this week. Oh, it was only a grant of options to "certain officers, directors and consultants" -- often the same Howe Streeter qualifies as all three -- but there were other behind-the-scenes activities that suggest the company is about to hit the promotional hustings. Two weeks ago, Lake Winn advanced to the Tier 2 of the TSX-V from the NEX board and it closed a placement of 4.31 million shares at six cents, raising just over $250,000.

The cash, one presumes, will go toward exploration, and that is likely to be at its Little Nahanni lithium project in the southwestern Northwest Territories, near the Yukon border. The company recently received an exploration permit that allows drilling, trenching and channel sampling, and although the company's treasury is more suited for the latter end of that list, any action would be an improvement.

Still, there are some things with Lake Winn's budding promotion that need sprucing up: In the end-of-release cautionary statements, Lake Winn cautions that "it is not certain if the kimberlite discovered will be economic or not as this depends on many factors." What is certain is that Lake Winn has discovered no kimberlites, as it is not a diamond explorer.

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