North Arrow sets aim at Nunavut diamond deposit

North Arrow Minerals Inc. pulls part of a 1,500-tonne bulk sample from the Qilalugaq site, north of Repulse Bay, in the summer of 2014, using mobile drills. (PHOTO COURTESY OF NORTH ARROW MINERALS)

These yellow diamonds come from the Qilalugaq Project site, north of Repulse Bay. (PHOTO COURTESY OF NORTH ARROW MINERALS)

Diamond deposits just north of Repulse Bay, soon to officially become Naujaat, have long looked promising.

North Arrow Minerals Inc. finally hopes to show these deposits are rich enough to establish a diamond mine.

The diamond exploration company counts the Qilalugaq project, some nine kilometres north of the Kivalliq community, as the most promising of the seven sites it is evaluating throughout northern Canada.

“This is the one that we think can be really transformative for the company, and turn us from an exploration company into a [mine] developer,” Ken Armstrong, president and CEO of the eight-year-old corporation, said in an April 14 presentation at the Nunavut Mining Symposium.

Qilalugaq covers an area of 7,143 hectares. The most promising section is a diamond-bearing deposit of 12.5 hectares that carries a total inferred resource of 26.1 million carats.

North Arrow’s bulk sampling of the deposit so far shows larger, high-value diamonds are yellow.

“The proportion of yellow diamonds increases, both by stone count and carat weight, as the diamonds move into the larger size classifications,” Armstrong said, which “is one of the main questions the bulk sample was intended to answer.”

The company will complete a “formal valuation” of the deposit, by the end of June, the CEO said, based on a 1,500-tonne bulk sample it pulled from the deposit last summer.

“This is still a preliminary evaluation,” Armstrong told Nunatsiaq News. The valuation will describe the quality of 400 carats of diamonds.

More bulk sampling will follow until North Arrow pulls up to 3,000 to 4,000 carats, “to get the project up to a feasibility stage, where you can go and start to talk to bankers about raising money to actually build a mine,” Armstrong said.

Like many properties in Nunavut, Qilalugaq has been passed around from owner to owner since 2003.

That’s when the mining giant BHP Billiton discovered diamond-bearing kimberlite rock formations in the area.

The multinational mining company discovered eight such formations, but sold off the claim to Stornoway Diamond Corp. in 2006.

North Arrow took an interest in the properties in 2013, when Stornoway decided to focus on developing Quebec’s first diamond mine — the Renard diamond project in the north of the province, Armstrong said.

The eight-year-old Vancouver-based exploration company is focusing its efforts on assessing the most promising kimberlite deposit, known as Q1-4, which covers 12.5 hectares.

Q1-4 is the largest known diamond-bearing kimberlite pipe in the eastern Canadian Arctic, North Arrow says in its corporate documents. It is also just seven kilometres from tidewater on the shoreline of Repulse Bay, which allow “open-water, ice-free shipping” for more than three months of the year, company documents say.

“Finding a diamond deposit is really hard, it’s very expensive, [and] it’s very time-consuming,” Armstrong said in his presentation at the symposium. “We estimate BHP probably spent in the neighbourhood of $25 million to discover this deposit, do the initial sampling, basically drill it, find it, figure out if the diamonds are there.”

“Now there’s just one more question to answer — and that’s what the diamonds are worth.”

The deposit’s proximity to the open seas, near tidewater, is a “huge advantage, when it comes to freight and transportation costs,” the CEO said.

The other key advantage, he said, is the size of the Q1-4 deposit.

The deposit’s best yellow diamonds could supply a rare market for jewellery, he said.

In the project’s bulk sampling stage, North Arrow has also drawn on employees from Repulse Bay.

“The community support is huge for this project,” Armstrong said. The company employed 15 employees from the hamlet in the summer of 2014, for their bulk sampling operation, which the CEO estimates “saved us about $10,000 in airfare from Winnipeg alone.”

The hamlet “identified this as being a real benefit to the community,” he said.

The Nunavut Mining Symposium wraps up April 16 with an evening gala and awards ceremony.