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Romancing
the [445
Carat]
Stone
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We arrived in Nuuk too late in the day to accomplish much so we visited a couple of the tourist craft shops (Doing our best to keep Greenland green, by bringing money) and met for dinner at the Nipisa, the winner of the Best Restaurant in Scandinavia for three years running.(Nipisa, Nuuk: telephone 011.299.32.12.10). The meal was superb.
We began the next day with a visit to the quasi-government agency, Greenland Resources, for a short meeting. (Greenland Resources is locally described as a "Crown Corporation," ie: a private company with independent directors, but with the home-rule government as a major shareholder). Let me backtrack for a minute. While we were in Iqaluit, much of Andy Smith's time was taken up trying to determine the status of a water use permit associated with the drill permit at Beluga. True North had spent nine months trying to get all the permits in conjunction with their $500,000 drill program with little success. Even though Canadian government regulations require an answer within 90 days, naturally the single person allowed to actually sign the permit took off on vacation in August, the key month of the oh-so-short summer work season. And the permit sat gathering dust, signature-minus, while a drill rig and crew sat on the Beluga property costing more money every single day.
In any case, we sat down in the meeting at Greenland Resources after introductions and the President of the company, a Mr Ole Ramlau-Hansen casually asked Andy and his people just what it was that Greenland Resources could do for them. Everyone on our side of the table was quite taken off guard. The concept of a quasi-government agency asking what they could do to help mining was a bit much to take, especially after just coming from Canada where entire government agencies are devoted to doing everything in their power to prevent mining. Andy, pushing his luck, asked just what was necessary to actually get a drill permit. Mr Ramlau-Hansen responded that naturally True North would have to tell them where they wanted to drill and how many holes. I about choked on my tea.
If I was a mining executive anywhere in the world and I found out about an iron deposit or a coal deposit or even a boring old ruby deposit in Greenland, I'd drop everything I was doing and jump on the next plane to Greenland. The government actually encourages mining and instead of throwing road blocks in the way of mining juniors, they actually ask what they can do to help. How quaint.
We got sorted out and made our way to the airport for the one hour flight down the coast from Nuuk to our destination, Fiskenaesset. Fiskenaesset is a tiny fishing town of about 250 people. Rubies were first discovered in the Fiskenaesset region in 1953. One underfunded Canadian company came in and blasted out a small bulk sample during the 1980s and left town under a crowd of unpaid bills and broken promises so the stage wasn't exactly set for True North to come in and be greeted by the welcome wagon.
After a year of difficult negotiations, True North managed to pen an agreement with the Canadian company who controlled the deposits. Full details of the agreement are found in their 43-101 report of June 21, 2005. Part of the agreement is to spend a minimum $150,000 per year on work at the project. Their budget for Greenland for 2005 was more like $500,000.
True North only began operations in Greenland last year and collected a 3 tonne mini-bulk sample. The sample was sent to SGS Lakefield for evaluation where it produced some mind-bending numbers. According to the 43-101 report, the value of rubies from Fiskenaesset is in the $2500-$5000 per ton range based on different assumptions. Someone had sent the report to me a couple of months ago and I was anxious to see the property.
[This year 2005 on Greenland, True North collected five 3-tonne mini-bulk samples from five separate ruby deposits. Previously in 2004, True North collected a 3-tonne mini-bulk sample from a sixth deposit. All together, 9 ruby deposits have now been discovered in the Fiskenaesset district].
We landed in Fiskenaesset in the afternoon and made plans to visit different ruby showings the next day. One of the issues I wondered about was the reaction of the locals to the invasion of the tiny village by a small group of Canadian geologists. Regardless of how the national government feels about mining, extremely positive in the case of Greenland, the local influence can always sink a project. And COO William Rohtert had already told me the company taking out the bulk sample years before had left a lot of hurt feelings in the community over the broken promises.
I cannot say enough good things about Fiskenaesset in general. I've traveled the world and never met people so genuinely friendly. It was the opposite of the welfare-mentality chip-on-the-sholder attitude found in Baffin. Few of the people speak English - they already have two languages under their belt - but they could not have been nicer to deal with, across the board.
We viewed a few specimens
of the ruby material in the building True North Gems used as
a base and they were quite remarkable. This year was pretty much
devoted to taking a large bulk sample and mapping out the various
zones of ruby showings.
The day we arrived, Dave Turner; a Canadian geologist, and a Greenland prospector named Thue Noahsen, discovered the 9th individual outcrop of rubies; Aappaluttoq ("Big Red").
The 9th deposit may well prove to be the company-making prospect.
True North Gems is still a season away from running a drill. They have found rubies along a great distance and in world-class, multi-kilo per ton finds. They haven't even begun to come up with any estimate of bulk tonnage but in comparison to what I saw at Regal Ridge, the rubies are two orders of magnitude better than the emerald deposit.
While we were in Baffin and getting a briefing on the sapphire deposit, the project manager talked about a technique they had discovered for finding the pods of sapphire-bearing material. While sapphires themselves don't fluoresce, they are often found in conjunction with a mineral called scapolite which does fluoresce.
That was one of those good news-bad news ideas. It worked brilliantly, finding pods of sapphire bearing material at Beluga but the sun is up almost 24 hours a day during the short summer. The young geologist, Luc Le Page -- who pioneered uv-scapolite hunting for sapphire at the Beluga project on Baffin Island -- would go out in the darkest hours, cover himself with a thick blanket and shine his flashlight around until he found scapolite which he then marked for examining closer during daylight. It was a brilliant idea.
I asked if they were using the same technique in Greenland and was greeted with a gale of laughter. I was told they didn't need to use a UV flashlight, you would just about trip over the rubies.
They weren't far wrong.
We launched out the next morning for the 10 minute flight to
the first deposit. And I was dazzled by the quantity of rubies.
It does indeed look like a world class deposit.
After walking up and down what seemed to be miles and miles of ruby-bearing rock, I was wet and cold. We jumped in the chopper for a short hop over to the 9th ruby-bearing zone; Aappaluttoq ("Big Red"). All of us hammered away and looked up and down the new deposit. Then Dave reached down and pulled out a monster stone. It was a giant, perhaps two inches by an inch by half an inch. It was so big that we had to guess how big it was, no one had ever seen a stone that big.
Based on two day's
sketchy data the new deposit looks as if it represents a new
and exceptional form of ruby mineralization. the exposed area
shows rubies over a 110 meter by 15 meter area and they occur
as primary, well-formed crystals. Only time will tell, but eveyone
felt the new find was wonderful.
We went back to Fiskenaesset to something I never quite imagined I would see, it was an all-island BBQ/Birthday party. True North Gems employed a young Canadian geologist by the name of Meghan Ritchie who attends Cambridge University during the school year. The 18th of August was her 22nd Birthday and that was more than enough reason to party. 250 people sang "Happy Birthday" to her, in Greenlandic-Inuktitut.
Any questions I had about relations between the locals and the invaders from Canada were soon settled. I have never seen such a gala. We had everyone from tiny babies in diapers to 90-year-old senior citizens. We ate lamb and caraboo and whale (without knowing). A local 4-member band made up of teenages played their hearts out as everyone sang and danced the night away. I cannot stress enough what an enjoyable evening it was and the Canadian crew were clearly part of the family.
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After setting off 15
minutes of fireworks provided by True North Gems we went back
to our house (there are no motels/hotels) for Birthday cake.
Between all of us, we didn't have a single scale capable of weighing
Dave's newly-found giant ruby (Big Red) until I remembered that
in Europe they weigh ingredients when cooking. A short search
of the kitchen revealed a cooking scale. We pinched the giant
ruby from Andy Smith and popped it onto the scale. It seemed
to show a weight of about 90 grams as best as we could tell with
the rough equipment. Or 450 carats. (weighing later at the offices
of True North Gems revealed the stone to be about 89 grams or
445 carats).
True North now has a company-making stone. It will be trimmed and may end up in the 200-250 carat range. Andy intends to have a Vancouver jewelry carver carve the stone into something eligant. It was a heart-stopper and could have only been found through a solid partnership between Greenlanders and Canadians.
When we came down from Nuuk to Fiskenaesset we flew in the chopper. Naturally, it's expensive to operate a chopper in Greenland and often mist and fog prevents them from flying. True North Gems augmented the chopper transportation with an enclosed cabin boat. Between the helo and the boat, they have been able to work 30 days a month and have accomplished far more than they set out to, this year.
We took the boat back to Nuuk in a 4 hour trip next to the fiords and narrow passageways. Even Greenland is affected by Climate Warming and the number of all year ports is increasing as the freezing zone moves further up the coast. The boat trip was an exciting end to our most enjoyable and profitable Greenland stay. Once back in Nuuk, we were met by our chartered King Air and soon on the way back to Iqaluit.
By this time the TGX crew at the Beluga sapphire deposit had managed to locate an available helicopter and afer a night's sleep we were on our way to the deposit early the next morning. True North had planned a 2,000 meter drill program and bulk sample as part of a $1 million dollar exploration but due to the bureaucratic delays in permitting barely got the drill rigs turning, although they did finish the bulk sample program.
William Rohtert's 43-101 report released this past May, while not as spectacular as with the Greenland rubies, revealed a still quite impressive $500 to $750 per tonne valuation. The deposit consists of a number of pods of sapphire-bearing material. While not as obvious or numerous as that of the Greenland rubies, short drill holes will go a long way in revealing bulk tonnage potential.
Clearly the market doesn't understand True North Gems. Last year, with only the emerald deposit at Regal Ridge, the market valued the company at about $20 million dollars Canadian. Even the release of the 43-101 reports on the sapphire and ruby deposits in May and June did nothing to move the stock and True North Gems is only worth about $12 million dollars Canadian today. I believe it's an education issue and over time the public will begin to understand the magnitude of what this year's programs have discovered.
Based on my admitedly-limited experience, I'd estimate the emeralds as 1 X, the sapphires as 5 X and the rubies as 500 X. I'm not an expert and all I am trying to do is give you a feel for what I saw and touched. Time will tell but when you can pick up 445 carat stones on the ground, there is bound to be something nice.
It's important for anyone interested in the company to understand that gem grade stones are very rare. Most of the stones will be suitable only for beads and cabachons worth $5-$10 a carat. But when you have kilos of stones per ton as they have in Greenland, you probably have a very valuable deposit.
True North Gems is now an advertiser and we purchased stock on the open market a year ago in the $.80 range and a month ago in the $.33 range. I am biased, Andy Smith is one of my favorite people in the mining business and he tends to surround himself with very competent people. I am not an investment advisor and this is not a suggestion to buy or sell any stock. I give my honest opinions only and no one has paid in any way to influence this piece.
The trip was a joy and I want to thank Warren Boyd, Greg Fekete, Nick Houghton, Andy Smith and William Rohtert for a wonderful and fun trip but especially Professor Roger Morton who managed to get us thrown out of three bars and two low rent pool halls and whose picture can be found proudly on the wall of every Post Office in Greenland :)
True North
Gems
TGX-V $.405 Canadian TNGMF.PK $.34 US 33.8 million shares outstanding.
True North Gems website.
September 5,
2005
Bob Moriarty
President: 321gold Inc
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