Roadside cut uncovers diamond fairy tale.

What may seem like nothing more than a casual glance at a roadside rock-cut has spun off into a $2.43 million investment in an area 30 km west of the town of Marathon, leading to what may be a Northwestern Ontario diamond-studded fairy tale in the making.

"It's your classic needle-in-a-haystack scenario," says Robert Lipsett, CEO and President of Vancouver-based Ripple Lake Diamonds Inc. "There's either an awful lot of kimberlite underneath that cover, or we're very lucky."

While Ripple Lake Diamonds' Marathon-area holdings now total nearly 143,000 hectares, the company's origins began nearly 20 years prior, with little more than luck and a keen eye.

A geologist, George Cavey, was performing a gold exploration program on a property west of the Hemlo discovery in 1985 when he noticed an interesting stone within a rock cut along the Trans-Canada Highway. However, very little diamond exploration was being conducted at the time, so no follow-up work was done to determine if it was diamondiferous. Nevertheless, Cavey's interest had been piqued.

In 2003, Cavey teamed up with Lipsett and Dr. Felix Kaminsky, a diamond exploration geologist, to explore potentially diamondiferous territories in Canada.

A 20-kilogram sample taken from the road cut and processed in a lab in Thunder Bay evidenced three micro-diamonds, a finding which Lipsett describes as being "over the top" given the almost random nature of the discovery. While the source diatreme for Ripple Lake Diamonds' initial sample was a mere three-by-three metres and did not have any real financial significance on its own, the discovery is credited for leapfrogging the company's progress.

"To find any diamonds right out of the chute is highly abnormal and strains the imagination," says Lipsett. "Normally, in the very early phase that we were in, you'd be lucky to find indicator minerals. Usually, you spend tens of millions of dollars before any diamonds are found, and we had just started."

With these findings in mind, Lipsett decided to go public with the company, and an IPO was done in January 7, 2005.. Thus far, $2.43 million has been spent on the site, with approximately 55 to 60 per cent of that total going towards Northern Ontario suppliers and contractors. Employment at the site has largely been seasonal: four full-time and two part-time workers were present throughout all of last summer, while up to 10 workers are typically on-site during the drilling process.

To put that into perspective, Liberty Mines Inc., a significant mining junior, has spent $2-$2.5 million on exploration and development through late 2005 to 2006 on its Redstone Mine site, located 25 kilometres southeast of Timmins.

However, Lipsett states that the total spent on his company's Marathon-area site isn't fully representative of their degree of achievement.

"We can do things very inexpensively by involving very senior guys on the ground, who use their experience to narrow the size of our samples to much smaller sizes than is standard," he says. "In turn, this lowers costs, and as a result, I'd say that our analyzing costs are only about 40 to 50 per cent of what you'd usually see. A third-party analyst who recently looked at our data said that we did five years worth of work in two."

Ripple Lake Diamonds' Marathon-area site has also seen significant sampling and prospecting, with nearly 1,000 samples being collected over the course of the last two years.

Now known as the TCH Diamond Project, the site has continuously evidenced findings so promising that the company recently doubled its claims holdings at the site. The project now represents one of the largest Ontario diamond plays held by a junior explorer.

www.ripplelake.com

By NICK STEWART

Northern Ontario Business