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The Poland China gold project, a joint venture of Diamonds North and
Uranium North, located in Washington state. Credit: Diamonds North
New focus on gold in Washington state
By: Alisha Hiyate
www.MiningMarkets.ca
2012-10-03
"Clarity, diligence, perseverance" are the words that still greet visitors to the website of exploration junior Diamonds North Resources (DDN-V). But after a decade of dealing with the logistic complications, short seasons and increasingly expensive reality of exploration in the north, the company's new motto could well be "simpler, faster, cheaper."
That's because the company is heading south -- just south of the B.C. border, to northeast Washington state to search for gold. While Diamonds North has long diversified out of diamond exploration, leveraging its vast northern land holdings for gold, copper and other more fashionable commodities, it's become more and more difficult to wring capital out of the markets for northern exploration of any sort.
"Going into the north to do a drill program, you'd have to raise $3 million to do it, and at these prices, that's just far too dilutive," the company's president and CEO, Mark Kolebaba, said during an interview at the Toronto Resource Investment conference at the end of September.
The company, which is trading at under 5¢, also needed a way to extend its exploration season.
"We thought, we're too quiet in the off season and it's tough on shareholders," Kolebaba says.
While the company originally expected to pick up just one project in Washington state, it's now got 10.
"It was one of these things --- we got in, it looked interesting, and we kept going further, expecting to get a fatal flaw and that just didn't happen," Kolebaba explains.
Now the company, with sister company Uranium North Resources (UNR-V), has redirected all its efforts to Washington under a 50/50 joint venture private company called Minerals North, formed earlier this year.
The companies' new focus on Washington --- where Kolebaba estimates exploration costs are roughly 80% lower than in the north --- may have been "almost purely accidental," but Kolebaba has a very clear strategy built around the one producing operation in Washington state, Kinross Gold's (K-T, KGC-N) Buckhorn mine and Kettle River mill.
"Our strategy is going into Washington state, exploring within a hundred kilometres of that mill and hopefully finding something that will benefit both us and say Kinross," Kolebaba says, noting that Buckhorn only has three and half years of reserves left and that the Kettle River mill is operating at half capacity.
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