Wednesday, March 10, 2010

Junior Miner Signs LOI for Nunavut Project (DDN.V)

Gold has been getting its due as the star of the show on websites such as this one, and why not? With the world financial situation treading on thin ice for a good year and change, gold is often used as a safe haven. But, on this occasion, other base metals such as nickel get the attention, if only for a few minutes, and Canada also gets its "propers" as a producer of base metals.

As parts of Canada began their recovery from the cold of winter, Vancouver-based Diamonds North Resources Ltd. (TSX-Venture:DDN) warmed up would-be investors in early March by telling them it had signed a Letter of Intent with Australian-headquartered Minerals and Metals Group, enabling the latter firm to earn 75% of the Nickel and other base metals on DDN's Amaruk Property in Nunavut territory.

The LOI stipulated MMG part with the equivalent of $6,000,000 Canadian and complete a pre-feasibility study on any base metal deposit that might be identified on Amaruk. A vital portion of the Amaruk property is a prospect known as Tunerq, something which sparked a lot of interest for MMG.

Drilling on Tunerq by DDN intersected Ni-Cu (nickel-copper) sulfides yielding 2.49% nickel (Ni), 0.56% copper (Cu), and 0.05% cobalt (Co) over a 9.1-metre zone within a 34.6-metre zone containing 1.05% Ni, 0.26% Cu and 0.02% Co.

The projected budget for 2010 is estimated between $2 and $2.5 million. MMG and DDN plan to mobilize crews into the Amaruk camp around mid-March, 2010. Also included in this year's exploration plan is regional prospecting to identify additional mafic and ultra-mafic bodies on Tunerq, and detailed mapping of other mafic and ultra-mafic bodies across the property.

Not that gold is off the agenda for this company; far from it. In January, DDN reported gold-bearing iron formation on Amaruk. Initial regional prospecting returned grab samples with over 0.5 gram per tonne (g/t) gold including a sample yielding 1.2 g/t gold. Among other discoveries is the Hepburn property in the Northwest Territories, in particular, the Ekati-Diavik diamond mines, Canada's largest and most profitable.

Early in March, Hepburn yielded high-grade copper, silver, and bismuth assays, with grab samples up to 19.8 % copper, 123.0 g/t silver, 0.20% uranium and 0.17% bismuth.

More northerly, sits the Victoria Island deposit, more than 80% of which is diamondiferous, with several bodies returning significant diamond counts and favourable stone size distribution, illustrating the potential for smaller high-value deposits.

If all this news has watchers of junior mining issues licking their chops, it should. Shares of DDN remain in the upper region of a trading range that peaked for the last 52 weeks last November around 39.5 cents, prices having worked their way up from a ditch of 10 cents on March 10 of last year.

The day of the MMG announcement found the price veering toward 30 cents on volume surpassing 162,000 shares. This widely diversified mining company looks to cash in on properties with lots of potential, and now, is taking foreign partners along for the ride. It's a company that merits a closer look.