Thursday, March 30, 2017

Proposed Summer Drilling

Summer Drill Program - 2017

The timeline is set to start the summer program in about 2 to 3 months from now once the spring melt occurs in and around June.

There is more detail on the planned program. The proposed drillholes are listed in the recent AGM presentation -- AGM Update PDF

On Page 17, the planned drillholes are shown on the image.

This program will try and use the benefits of horizontal drilling to gain more information for less $$'s. On the diagram on page 17, one can see the 'parent' drillhole and the associated wedging off that hole to enter kimberlite pipe at various depths.

The final quantity of drilling footage is still a work in progress and there is a possibility of utilizing 2 core drill rigs instead of just the one already onsite. The equipment listed in the permit to work at Chidliak does list and allow for 2 core drill rigs, so it is just a question of procuring and mobilizing a second rig to site.

All work from the summer program will feed into a second or updated PEA that should include a new underground portion of the CH-6 kimberlite pipe on the assumption the resource continues to a depth of around 500 metres. They will know if it does in a few months from now when the drilling occurs.

Monday, March 13, 2017

2017 summer program

The focus for the development of the Chidliak resource will be carefully selected work to be done during the summer season.

It will be three fold.

1 - Deep core drilling to extend the resource to a target of 500 metres below surface.
2 - Drilling through the adjacent country rock to core log geotechnical data.
3 - Continued environmental/permitting studies (baseline and others) for both the project area and the all weather road corridor.

Starting with #3 - environmental studies are necessary in the permitting process.
Here is a history and some information on permitting -- Permitting details

One of the snippets of information from that link is this:

"The emphasis of a lengthy environmental baseline is very important in the permitting process. Ranging from 6 years to 9 years in a couple of the projects above. Chidliak started independent environmental baseline studies in 2009 and continue each and every year. 2016 will be year 7."

Chidliak did have a baseline study in 2016 and will have another one in 2017. That would put it in the 8 years of studies category that can be included in any advanced permitting applications. The key is the continual studies and it just takes time to collect that information. Meadowbank mine had 9 years of studies going into its final environmental impact assesssment. Chidliak is well on its way in this part of the requirement.

#1 and #2 will be obtained from the same core drilling by utilizing slightly angled holes in the country rock that will pierce the lower part of the kimberlite pipe (300 to 500 metres below surface).

More geotechnical drilling means a more realistic approach as opposed to very conservative approach when deciding what pit wall angles to use. This effects the strip ratio and how much waste one needs to extract or leave in the ground. Geotechnical core drilling will also be used within the kimberlite pipe to help define the size of the stopes that can be extracted underground safely. Bigger stopes means bigger cost savings. Bigger stopes also can lead to more risk to failures.

Deeper kimberlite expansion means expansion of the inferred resource at CH-6 and the concept of bringing in an underground portion to an updated PEA.

In the latest presentation -- 2017-03-01 Presentation
On page 19, there is a big drop off in positive cash flow starting in year 6 and beyond.
The goal will be to prevent that drop off from happening and keep the strong cash flow going for a few more years. The rock value of CH-6 is very lucrative and an underground concept can add substantially to the cash flow in the years 6 to 10. The drilling needs to be done to confirm this and this is a huge part of why the program was selected.

Ch-7 tonnage will be still be included in the PEA. It will be pushed back as far as possible until further work on CH-7 can increase the rock value in light of the diamond breakage issue. If the mine life extends to 15 years, the size of the mill will be put in question and may be increased. This will help bring higher value material further into the present.