Canadian exploration company CanAlaska has entered into a C$20.4 million option-participation agreement with De Beers Canada on kimberlite-style targets in Saskatchewan.

The claims staked by CanAlaska in the Northwestern Athabasca basin, Saskatchewan and optioned to De Beers cover 75 kimberlite-style targets developed from a recent high resolution airborne geophysical survey carried out on behalf of the Saskatchewan Geological Survey.

The 2011 airborne magnetic survey, flown at 400 m line spacing, reveals a series of discrete magnetic anomalies northeast of the Carswell structure and close to the large crustal suture related to the Grease River Fault zone.

The Saskatchewan Government’s Kimberlite Indicator Minerals (KIM) sampling programs reached close to the Carswell structure, but the northern most samples are southeast of the down-ice trend from these magnetic anomalies.

There is little exploration work in this area of the Athabasca basin. In the Fort McMurray area of Alberta, the sampling for KIM shows a grouping of KIM dominated by chromite, with some pyrope and eclogitic garnets. These appear to be down-ice from the kimberlite-style targets identified within the Athabasca Sandstone in the northwestern Athabasca.

Basement rocks below the Athabasca Sandstone form part of the Rae Province, with a projected lithospheric thickness in excess of 150 km, thereby within the diamond stability field.  The Rae Province, north of the Athabasca in the Nunavut, hosts diamondiferous kimberlites which have been briefly investigated in the past.

Option agreement specifics

The multi-stage C$20.4 million option agreement allows De Beers to carry out a series of work programmes to earn-in to the project by funding C$1.4 million over 1 year as part of Phase 1 in which De Beers would earn a 51% interest; C$2.0 million over two years in Phase 2 earning a 70% interest; C$3.0 million over 1 year in Phase 3 earning a 80% interest; and C$14.0 million over three years in Phase 4 earning a 90% interest.

De Beers is required to progress through the options within the time periods or return the property to CanAlaska, however the sequential options are subject to CanAlaska’s right to participate in the exploration as a Joint Venture partner.

CanAlaska’s participation rights (to prevent further dilution of its interest) start once De Beers has earned its 70% interest. The work programmes will be operated by De Beers, but with assistance from CanAlaska.

The priority work will include a detailed airborne survey, diamond indicator sampling in the vicinity of the targets, followed by drill testing prioritized targets.

“These 75 circular targets fit all the geological and geophysical criteria of kimberlites and provides a compelling target for CanAlaska and De Beers.

“We are very pleased to have joined forces with the world’s premier diamond explorer to evaluate this 17 400 ha claim package, which hosts numerous targets. Our alliance with De Beers will allow rapid first pass evaluation, and we look forward to the ability to participate with De Beers as a partner as the project grows,” says CanAlaska president Peter Dasler.