Expanding, he said, "in particular there's not enough in the coarser sizes ... and that's of course where the bulk of the value lies in a typical deposit. The presence or absence of very high-value stones can have a huge impact on the overall valuation." While that doesn't mean one stone can make or break a valuation, Armstrong noted that "one stone can make a huge difference." The main reason is that "if you see [a large stone], then you know they exist — you can argue then about ... how frequently they might realistically appear in a production scenario." However, if such stones don't turn up "it's a lot tougher, you're trying to prove a negative in a sense."Secondly, in the process of getting the bulk sample done, North Arrow discovered that there were two identifiable diamond populations in it that could be tracked. As a result, the already small parcel had to be split into two smaller parcels, intensifying the issues mentioned above. Summing up the valuation, Armstrong said, "obviously the result wasn't what we were hoping for." What's next? However, that doesn't mean all is lost at Qilalugaq. North Arrow now intends to take some time to look at the results and plan its next move. Armstrong couldn't be too specific, but said that the starting point will be looking at how much more sampling may be required to get enough diamonds for a more accurate valuation. "It's almost working backwards to find out ... how much tonnage we would need to sample, and then how much is that going to cost. And then looking at that cost ... the next question becomes can you justify spending that amount of money for what the risk would be," he said. Armstrong added, "it's a unique deposit, and that hasn't changed. It's unique in terms of having the yellow diamonds there, it's unique in terms of how big it is compared to other pipes in the Canadian Arctic, and it's unique in terms of its location next to tidewater. That location is a huge advantage, so we'll need to keep that in mind as we evaluate things. We just have to digest this to some extent before we make any grand plans moving forward."
Don't forget PikooIt's also worth noting that Qilalugaq isn't North Arrow's only project. In fact, though Qilalugaq has certainly been front and center this year, the company's Saskatchewan-based Pikoo project has been making headlines as well. "Certainly in the near term ... there's news in the pipeline for [Pikoo]," said Armstrong, noting that a drill program was conducted there this past winter, and that samples are now in the lab getting processed. "If we can replicate the sort of diamond counts we got in the first round of drilling, then that would be very positive," he noted. Those results will also help North Arrow decide how to move forward at Qilalugaq. "We have flexibility," said Armstrong, also pointing out that his company isn't strapped for cash. "We're not totally dead in the water now trying to figure out how to raise money to move forward."
In closing, he commented, "in the long term in the exploration game you have ups and downs — exploration and evaluation never really go in a straight line, and this is definitely one of those non-straight points in time. We're built with a team of people and with a group of projects that we would like to think somewhat insulate us from bad news on any single project."
Investors will certainly be waiting to see what North Arrow decides to do in terms of Qilalugaq and for results from Pikoo.Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. Editorial Disclosure: North Arrow Minerals is a client of the Investing News Network. This article is not paid-for content. Related reading: North Arrow Up Over 40 Percent on Yellow Diamond News North Arrow Reports Three New Kimberlite Finds at Pikoo North Arrow Minerals: Bulk Sample Processing Approaching Completion
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