Naujaat

Highlights

• 12.5 ha Q1-4 kimberlite is largest diamondiferous kimberlite pipe in eastern Canadian Arctic; comes to surface.
• Located only 7 km from tidewater; ice-free shipping for over three months per year.
• Rare population of yellow to orange diamonds (~21% by carat weight for A28 phase) have potential to increase overall diamond value.
• Costs to supply a theoretical mine estimated to be ~50% of the costs to supply the Lac de Gras diamond mines via ice roads.
• Burgundy Diamond Mines  ("Burgundy") paid $5.6M to collect a 2,000 tonne sample during 2021 summer field season to earn a 40% interest.
• Initial archaeological, ecological and road alignment studies complete for a Community Access Road that would come within 1.5 km of Q1-4.

Overview

Details on the NI 43-101 Resource

The Naujaat Diamond Project is located in close proximity to the community of Naujaat, Nunavut. Since diamonds were discovered in the area in 2003, the property has undergone several phases of exploration using airborne geophysics together with property wide till sampling, drilling, and bulk sampling. The Project consists of 7 mining leases and 5 mineral claims covering 12,705 hectares.

A total of eight kimberlite pipes have been identified as well as a number of associated kimberlite dykes. The Q1-4 kimberlite is the largest and most diamondiferous of the kimberlites discovered to date and has been the focus of North Arrow’s work since acquiring the Project from Stornoway Diamond Corporation in 2013. Q1-4 is located on Commissioner’s Land within the municipality of Naujaat, approximately 9 km northeast of the community.  

The May 2013 NI 43-101 Technical Report outlines an Inferred Mineral Resource at Q1-4 estimated to be 26.1 million carats total diamond content (assumes 100% recovery) from 48.8 million tonnes total content of kimberlite with an average +1 DTC total diamond content of 53.6 carats per hundred tonnes (cpht) extending from surface to a depth of 205m.

Additional resource upside in the form of a target for further exploration ("TFFE") was estimated at between 7.9 to 9.3 million carats of diamonds (from 14.1 to 16.6 million tonnes total content of kimberlite with an average +1 DTC total diamond content of 56.1 cpht (assumes 100% recovery), extending from 205m depth to 305m depth.  

In 2014 North Arrow extracted a 1353 dry tonne sample for the A28 portion of the kimberlite recovering 11,083 diamonds greater than +1 DTC (~1 mm) weighing 384.28 carats  for an overall sample grade of 28.4 cpht (carats per hundred tonnes). The recovered diamonds included 30 diamonds larger than the 3 grainer (~0.6 carat) size and 15 diamonds larger than 1 carat. Coloured diamonds, representing a range of orange and yellow hues and tones, comprised approximately 9.0% by stone count and 21.5% by carat weight of the +1 DTC diamonds.  The seemingly coarser population of coloured diamonds were determined by FTIR work to represent a separate and younger population to the white diamonds.  

Cutting and polishing of some of the clearer coloured rough diamonds in 2016 produced gemstones that were certified by the Gemological Institute of America as fancy vivid orangey yellow.

A 2017 mini-bulk sample advanced this evaluation by providing an indication of the characteristics of the coloured diamonds in the A88 phase of the deposit. A total of 209.8 dry tonnes were collected from a single sample pit and demonstrated a similar proportion of coloured diamonds (21.2% by carat weight) as earlier A28 sampling (21.5% by carat weight). See press release dated February 28th, 2018 for more information.

On June 2, 2020 it was announced that North Arrow had entered into an option agreement with Burgundy Diamond Mines "Burgundy" of Australia to fund further evaluation of the coloured diamond population at the Q1-4 diamond deposit.  In particular, Burgundy agreed to spend Cdn $5.6 million to fund the collection and processing of 2000 tonne sample of the Q1-4 kimberlite to earn at 40% interest in the project.  This was considered phase one of a two phase plan could see the company earn a total of 60% upon funding the collection and processing of a 10,000 tonne sample to determine a diamond price accurate enough to be used in a bankable feasibility study.

The program commenced on June 21, 2021, and was announced completed on August 19, 2021, with the collection and helicopter transport of 2500 bags of kimberlite moved to the company's laydown area near the town quarry.  The sample was loaded on to the September sealift and shipped south to Montreal, where it was then loaded on to flatbed trucks for the remaining journey to the Saskatchewan Research Council is Saskatoon for final diamond recovery.  Processing results were released according to the two phases of kimberlite collected, with the A28 results being announced on April 26, 2022 and the A88 results, on July 28th, 2022.   

As part of the assessment of the results, the entire parcel of diamonds recovered from the 2014, the 2017, and the 2021 samples were sent to Perth, Australia for Burgundy's viewing and internal valuation. 

Following the delivery of the report on the internal valuation of the parcel, Burgundy elected to remain at their 40% interest and to move forward funding the project on that basis in order to focus money raising efforts on their newly announced acquisition of the Ekati Diamond Mine in Canada’s Northwest Territories.

In anticipation of the next stage of assessment, preliminary archaeological, alignment and environmental impact studies were conducted by the Hamlet of Naujaat to consider the potential upgrading of an existing community ATV trail to an all-weather, community access road to support the transportation of a 10,000 tonne sample and for community use.   

The proposed access road was envisaged to pass approximately 1.5 km southeast of Q1-4 at kilometre 11 of its proposed 15 km length. Outside of community use, it would be used to move the 10,000 tonnes from the sample site to a processing plant near or in the community, potentially near North Arrow’s laydown area near the town quarry. 

In addition to the economic opportunities the road would bring to the Hamlet of Naujaat as a direct result of the bulk sample program, a number of beneficial social and economic development outcomes were outlined, including increased tourism and education opportunities, access to aggregate and carving stone sources as well as improved and safer access to the land for traditional land use activities. The access trail’s alignment lies entirely within the community’s municipal boundaries.

The reader is cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability. In addition, the potential quantity and grade of any target for further exploration is conceptual in nature, there has not been sufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.