Crystal Exploration (CEI.V) Has Encouraging Results in Nunavut

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Call it a 'Diamond in the Rough.' Crystal Exploration (TSX-V: CEI) had encouraging results from their initial diamond recoveries from three drill holes from their 100% owned Muskox Kimberlite project in Nunavut, Canada. Overall the project has low holding costs and commitments. Historically, grade samples were confusing to say the least at the oversize. Grade prediction modelling historically did a poor job in matching historical bulk sample results. With more optimum processing techniques, Muskox has great potential to show high-value diamond grades. Also, the results discussed below indicate good potential at Muskox even from a small 2083 kilograms (kg) grading 2.358cts which is the equivalent of 1.13 carats per tonne. Diamonds found within eclogitic xenoliths being recovered, through the help of the optimum processing techniques, are encouraging for Crystal Exploration Inc.

The diamond samples were tested at the Saskatchewan Research Council using Dense Media Separation in order to recover commercial sized diamonds. These diamonds must be in the range of 0.85mm+. Let's discuss the results.

The first drill hole had depth of 318.5m (including 275m kimberlite), the second had 304.8m (including 270m kimberlite), and the third was 303.6m (including 260m kimberlite). The remaining three holes results are expected in Q2, 2016.

Three samples weighing 2200.40 kg, 2158.80 kg, and 2083.50 kg respectively were tested. There were 14 (weight: 0.637 carats), 17 (0.675 carats), and 47 (2.358 carats) diamonds greater than 0.85mm respectively in each group. As mentioned above the samples graded 0.29, 0.31, and 1.13 carats per ton (cpt), respectively.

Great indications can be made from the largest of the diamonds recovered. The largest diamonds recovered include 0.245 (MOX-004), 0.282 (MOX-025), 0.365 and 0.253 (MOX-020) carats. The company has to be happy with these findings.

The diamonds are described as off-white, transparent with no to minor inclusions. Some of the diamonds recovered were not fully liberated from either kimberlite and/or mantle xenoliths as evidenced below:

Beyond these results which show a potential winner in Muskox, the pipeline for Crystal Exploration also includes over 50 targets ready for drill testing. These targets have potential for new kimberlite pipes and are based on geophysics, kimberlite indicator minerals (KIM) and diamond indicator minerals (DIM), and microprobe analysis. The targets are strategically located at the heads of KIM trails. Exciting times ahead, indeed, and a company to be keep a close eye on.

Muskox Kimberlite Pipe Historical Overview - Diamond Potential

Initially, diamonds were discovered by no other than De Beers Canada in 1996, which teamed up with Tahera Diamond Corp. for exploration until 2007 through a joint venture. Capital constraints, the financial downturn of 2008, and low diamond prices halted the work in 2007.

De Beers tested 1748.0kg of Muskox core between 1996 and 1998, resulting in the recovery of 9,546 diamonds ( greater than 0.075 mm) with a total weight of 2.0 carats. The macro-diamond potential of the Muskox Kimberlite was tested in 1996 and 1997 with 2 mini-bulk samples. The combined sample recovered 16.8 carats from 47.0 tonnes inferring an overall grade of 35.7 carats per hundred tonnes (cpht).

Tahera conducted larger bulk sampling in 2006. The goal of the bulk sample program was to develop an initial grade estimate to further the understanding of the characteristics of the diamonds present in the kimberlite and to collect a sufficient number of carats for the purpose of estimating the value potential of the diamonds contained in the deposit and thus begin to develop a resource model. Historically, $50m has been spent on the projects, and yet there are still 22 historical unsampled drill holes at Muskox Diamond Bearing Pipe.

The company used a 'large diameter' (LDD) RC drilling model. Diamonds sized 0.85mm+ were attempted to be retained. 928kg of kimberlite material was passed over a 0.85mm square mesh screen. The larger particles totalling 605 tonnes were processed, inferring an average drill recovery of 65%. The overall average grade for the magmatic kimberlite was 53 cpht. The overall grade for the volcaniclastic kimberlite was 35 cpht. The numbers look promising here for the nature of the business. The management took this project for a reason as they see a 'diamond in the rough.' Digging into the numbers, you can see why the management took this project. and are 're-discovering' these diamond assets.

Overall, this means the project is under-explored, untapped, and has good indications of high-grade kimberlites and diamonds in a large land mass.

Capital Markets

Shares Outstanding: 19,885,883 shares. This is one of the more tight plays in the exploration sectors. There is strong insider ownership for Crystal Exploration Inc.

Share Price: $0.095 resulting in market capitalization of $2.89M.


Make no mistake about it, management drives execution, so it is worth taking a look at the Management Team:

President, CEO & Director - Jim Greig:

Mr. Greig was recently CFO & Director at Crest Petroleum and is a Business Advisor with Gilden Group of mineral exploration companies. Recently at Keegan Resources Inc. (now Asanko Gold) he was part of the mine development team advancing the 5 million ounce Esaase Gold Project in West Africa. With 20 years in the resource sector, he brings comprehensive experience in exploration, development and mineral production. Selected engagements within the resource sector include the Hunter-Dickinson Group, Kennecott Canada, Breakwater Resources Ltd, McIntosh Engineering and Stantec Engineering. Mr. Greig holds an MBA from the University of Calgary and a BA Geography from Carleton University.

CFO - Justin Timms

Mr. Timms has been involved in the financial management, governance and reporting of publicly-listed mineral exploration and mining companies operating in North and South America, Australia and Africa. His prior experience includes serving as a controller for a start-up drilling services company operating in North America. Justin is a graduate of Accounting and Strategic Measurement from Grant MacEwan University.

Technical Advisor - Dean Besserer

Mr. Besserer is a graduate of the University of Western Ontario (1995) and acted as a geological consultant from 1994 until 2011 and former principal and Managing Director of APEX Geoscience Ltd., a geological consulting firm with offices in Canada and Australia. His more than 20 years of experience in mineral exploration includes managing exploration campaigns and conducting property evaluations in Canada, USA, Australia, Russia, South East Asia, South and Central America and Africa for numerous major and junior mining companies for commodities including gold , base metals, graphite and diamonds. This includes managing diamond projects with annual budgets in excess of $10 million from discovery to bulk sample on behalf of De Beers, BHP Diamonds, Stornoway Diamond Corp., Shear Minerals Ltd., Indicator Minerals, Ashton Mining, Vaaldium Resources, Grizzly Diamonds, Hunter Exploration, Marum Resources, and New Blue Diamonds in Canada, US, South Africa and Australia.

Michael Dufresne & Apex Gioscience Ltd. - Geological Consultants

Mr. Dufresne received his B.Sc. in Geology from the University of North Carolina at Wilmington in 1983 and his M.Sc. in Economic Geology from the University of Alberta in 1987. He is a registered Professional Geologist (P.Geol.) with the Association of Professional Engineers and Geoscientists of Alberta (APEGA) since 1989. Mr. Dufresne is the President and a principal of APEX Geoscience Ltd. He has worked as a consulting geologist for over 25 years conducting and directing exploration programs for junior and major exploration and mining companies encompassing a variety of commodities and deposit types including diamond, gold (placer and lode), base metal and industrial minerals in Alberta, British Columbia, Yukon, Nunavut, Quebec, the Northwest Territories (NWT) and internationally. Mr. Dufresne has authored numerous Technical Reports for public companies for early to advanced exploration stage projects including resource work for a variety of commodities and deposit types. He has additionally published extensively on the mineral potential of Alberta, as well as the Yukon and Northwest Territories and was first author of “Diamond Potential of Alberta” Alberta Geological Survey Bulletin 63. Mr. Dufresne was personally involved with and part of the exploration teams responsible for the discovery of the George Lake – Goose Lake gold deposits, Nunavut, the Three Bluffs gold deposit, Nunavut, and the Perseverance gold deposit, which is currently in production, in the Coolgardie area of Western Australia.

Apex Geoscience has extensive diamond experience from grass roots, early exploration to production scenarios. The combined wealth of experience from senior team members spans over 100 years’ operating in Canada’s north. Apex’s team of geoscientists have worked with the best diamond companies in the world and includes an extensive list of diamond bearing kimberlite discoveries and projects that have gone into production.

Summary:

  • Experience Includes: De Beers, BHP Billiton, Stornoway Diamonds, Shear Diamonds, & Indicator Minerals
  • Geographically, Canada is main area of Expertise
  • There is an accumulated 200 years of experience approximately



Additional Important Figures:


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