Diamonds: one man's best friend. (Spider Report).

WAWA -- Al Shefsky hikes up a twisty, thigh-burning bush trail hacked out of the spruce and birch towards his diamond property.

It is a chilly spring day in mid-May accompanied by boot-sucking mud and rivulets of late winter run-off trickling down the hillsides.

"I feel invigorated whenever I come out here," says Shefsky, the president of Pele Mountain Resources Inc., one of four junior exploration companies in the hunt for diamonds in the Wawa area.

Here in this five-star moose pasture where hunters and prospectors have tramped the rocky ridges of the Canadian Shield for decades is one of the hottest new places for diamond exploration in Canada.

Shefsky is giddy when talking about the potential of the Festival property and its untold millions of ounces of commercial and gem-quality diamonds hidden beneath the 2.7-billion-year-old rocks, the oldest known diamond deposits in the world.

And he is looking forward to the upcoming 2003 field season.

The outcrops at their Cristal occurrence are stripped of vegetation by exploration crews, and coated with xenoliths, rock fragments encased in volcanic breccias pushed upward from deep inside the mantle.

Practically popping out on the surface, they are the key indicators for diamond-bearing rock.

"They're the dead giveaways," says Shefsky, a former stockbroker who worked in the early 1990s for CM Oliver, a Vancouver brokerage firm specializing in junior resource companies, before he left in 1996 to start Pele Mountain Resources.

"Once you know what you're looking for, they just jmnp out. They're so obviously different from other rock."

Pele wholly owns the mineral rights interest to the 101-square-kilometre Festival property with three known diamond occurrences-Cristal, Genesis and Dom Perignon - about 20 kilometres north of Wawa.

The corporation also holds two gold properties near Wawa and west of Thunder Bay, but Shefsky says almost all their exploration dollars are being funnelled into Festival.

The past winter drilling program proved to be a successful one, yielding a 0.72 carat white gem quality diamond, Pele dubbed. "The Big Goose.'

The recovery of the gem was one of more than 160 other commercial size diamonds in the first 125 tonnes of samples processed from Pele's Cristal and Genesis diamond occurrences on the property.

It represented a milestone for Pele, but Shefsky says it has been a tough sell to convince the skeptics in the Toronto brokerage houses that Wawa is more than just a micro-diamond playground.

"People on Bay Street don't believe there are diamonds in Northern Ontario. They don't understand we've recovered commercial, gem-quality diamonds.

"It's a remarkable project that seems to be under-appreciated in the whole junior resource sector.

"We're dealing with big deposits with very large diamonds in them right beside the Trans Canada highway on the doorstep of Wawa."

Diamonds have been rumoured to exist in the Wawa area for decades.

Local prospectors such as the legendary Mickey Clement had been panning diamonds from the Michipicoten River in the early 1990s and newspaper clippings from as far back as the 1930s show diamonds were found in the area. But they could never find the source.

Interest was piqued in 1995 when prospector Sandor Surmacz spotted something unusual in a rock cut outcropping along the Trans Canada Highway 20 kilometres north of the town. Relying on his experience diamond hunting in the Northwest Territories, Surmacz took a sample and sure enough it was diamond bearing.

Later finds by local prospectors Terry Nicholson, Mike Tremblay and Jack Robert along a logging road reinvigorated the play and encouraged companies such as Pele Mountain and Band-Ore to stake claims in 2000.

How the Wawa diamonds formed is not all that different from any other diamond occurrence.

Diamonds grow and form at great depths, 200 kilometres down in the earth's mantle where the pressure and heat exist to form a diamond. The only way it gets to the surface is through some kind of explosive, cataclysmic volcanic event that shoots the diamonds upward.

"There appears to have been a very catastrophic event that tapped that source," says Shefsky, who believes the quality of the Wawa diamonds may be as good, or better, than what is being produced in the Northwest Territories or offshore.

"We've seen some spectacular, clear, incredibly well-preserved octahedrons (the preferred shape of.a diamond in the cutting process) that are just beautiful. The colour on some of them is just so clear, like ice cubes.

"It gave us the encouragement to keep going."

For Pele Mountain, Wawa has everything necessary for a cheap, open-pit mine with the highway accessibility, diamonds outcropping near the surface and a community of miners and prospectors.

Shefsky says with a. relatively small amount of dollars - about $2 million spent since 2000 - they have only scratched the surface of the property's potential, but have produced huge results so far.

"Based on our work and given all the advantages of the local infrastructure and working in an open-pit situation, we believe for $10 (Cdn) or less we can mine and process a tonne of rock and get diamonds."

While Shefsky credits his exploration team for the success they have enjoyed, he also says luck plays a big hand in finding a diamond-bearing outcrop so close to the highway.

"We're a very aggressive company too, and we're working with very dedicated and passionate people who are very determined to make this thing into a mine," says Shefsky. "We've taken an aggressive approach in moving this as far and as fast as we have. We're very lucky with the infrastructure and having outcropping gives us an advantage."

For the 2003 field season, Pele Mountain will continue sampling and conducting some geological mapping to try and outline some kind of a resource.

"We know we have the big diamonds out there," says Shefsky. "We've really only explored 10 per cent of the property."

The Geological Survey of Canada has mapped the area and has processed several samples for the government from some of the outcroppings.

"It's become quite a phenomenon and the government's been taking notice and reporting on it.

"It can't be understated; there's so much potential here and people are just starting to spend the exploration dollars. No doubt there will be more diamonds found."

Pele's exploration work has sparked interest by De Beers who processed a 100-tonne bulk sample two years ago free-of-charge from Pele's Cristal showing at its Grand Prairie, Alberta facility.

If a joint-venture is in the works to develop a mine, all Shefsky will say is that discussions with the Johannesburg-based multi-national are ongoing.

"They are interested.

"We're not taking any possibilities off the table. We've mined a 10,000-tonne bulk sample on our gold property and learned if we have good talented people, it's possible for a junior to do mining."