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Godfather of Canadian Diamonds Hot On Trail of New Billion Dollar Discovery

By Marc Davis, Managing Editor
September, 2002

The focus of Canada's much-heralded hunt for new billion dollar diamond discoveries has ironically shifted away from the region that first ignited considerable excitement in late 2001. After a few months of highly encouraging results, Ashton Mining of Canada (TSX-ACA) announced in August that both its Artemisia and Potentilla kimberlite pipes have not lived up to expectations. (Two mini bulk sample programs provided disappointing diamond counts). This development is bad news for the several dozen junior mining companies that jostled for position in a huge staking rush all around Ashton's two flagship northern pipes. And with the extreme cost of working near the Arctic Circle in Canada's frigid territory of Nunavut, it's likely that this area play will soon fizzle out.

But the news is not all bad for Canada's diamond exploration sector. Elsewhere, in Ontario and Quebec, Ashton Mining and several other players are still producing compelling results. In particular, Ashton Mining has high hopes for its small cluster of diamond pipes in Quebec's Otish Mountain region. And both the Wawa and Attawapiskat regions of Ontario continue to produce tantalizing micro diamond counts, suggesting that diamond-rich pipes are close at hand.

SmallCapMedia believes that in Ontario the best prospects for success rest on the broad shoulders of Chuck Fipke, Canada's godfather of billion dollar diamond discoveries. It was Fipke who first turned the diamond world on its ear in 1992 by proving the existence of rich diamond deposits in Canada's frozen tundra. His discovery led to the opening of the $2.5 billion Ekati diamond mine. Fipke's public company at the time, Dia Met Minerals, catapulted from around $0.35 to over $67 before being bought-out by one of the world's largest mining companies, BHP of Australia. Many of Dia Met's shareholders became rich and so did Fipke. He even owns a ten per cent personal interest in the Ekati mine, which produced about three million carats a year.

Now for the first time in a decade, Fipke has the same glint in his eye that he had when he first struck pay dirt with Dia Met Minerals. He has been working for the last three years in northern Ontario's Attawapiskat region. This is the same area where De Beers is developing a major diamond deposit, known as the Victor pipe. But Fipke believes he can give De Beers a run for its money. His latest public company, Metalex Ventures (TSX-MTX), is now producing compelling exploration results. To date, he has used his world-renowned sleuthing techniques to trace a number of indicator mineral trails (tiny colored stones that are synonymous with diamond pipes) back to what he believes to be their geological source. Not coincidentally, these mineral trails appear to originate from the immediate vicinity of strong kimberlite-like geophysical anomalies. (Please refer to the Coronation Diamond District Report that has a link on this page for a more thorough explanation on Canada's emerging diamond story and how to find diamond pipes). In other words, Fipke thinks he has zeroed-in on a cluster of diamond pipes.

Metalex is a very tightly held company in which Fipke owns most of the free-trading and restricted stock. So, the company suffers from a serious lack of liquidity. However, Metalex has a joint venture partner in this project, Arctic Star Diamond Corporation (TSX-ADD), which has earned a 20 per cent interest in this venture by paying $600,000 towards the work program. Fortunately, Arctic Star is a broadly-held stock with reasonable liquidity and a relatively cheap share price. Since its IPO at Can. $0.25 in March of this year, Arctic Star briefly spiked as high as Can. $0.53 on the news of the joint venture with Metalex. The stock has since drifted down to around its IPO level due to a general lack of news and prevailing market conditions. However, informed sources suggest that Fipke is ready to drill several high-priority targets that promise to reveal diamondiferous kimberlite pipes. Thus, the upside for Metalex and Arctic Star, in particular, appears very favorable once a drill program is announced. SmallCapMedia will be following this story very closely in the coming months.