Wawa diamond mine probable: breakthrough in diamond exploration holds potential for open-pit mine. (Mining: Special Report).

Wawa's diamond rush is for real. Pele Mountain Resources Ltd., a diamond junior working the bush near the town has recovered 53 commercial-size diamonds from their Genesis occurrence.

In early September, Pele extracted diamonds from a 4.5 tonne sample collected from a volcanic outcropping on their Festival property which was processed at the site.

The total weight of the diamonds was 0.52 carats with the largest diamond collected being a broken stone weighing .085 carats.

"There's been a popular misconception since the beginning about Wawa rocks being merely a micro-diamond occurrence," says Al Shefsky, Pele's chief executive.

"We have clearly discovered large volcanic units that are carrying commercial-size and gem-quality diamonds and many people don't realize that.

"These things are big. They have gem quality and with this grade that we are seeing at Genesis, we're definitely advancing the project toward a very good chance of being economic."

Though the grade is not comparably to mines in the Northwest Territories, Shefsky says a particularly high grade is not needed to make Wawa a feasible deposit.

Their 101-square-kilometre Festival property, of which Pele owns 100 per cent mineral rights, has features that make a cheap, open pit mine possible. The diamonds are inside chunks of 2.7 billion-year-old volcanic rock and practically pop out of the soil instead of having to drill hundreds of feet down.

"The diamond-bearing rocks are outcropping at the surface. We're able to find and sample them with a very low-cost technique, just prospecting," says Shefsky.

The other advantages are that the property is about three kilometres from the Trans Canada Highway, is now connected by an access road, with a power supply and a qualified workforce resides in the area.

"The cost of developing and operating a mine in this location is just a fraction of what it would be in the Northwest Territories so we don't need as high a grade."

Though DeBeers has been allowed to observe drilling, collecting, as well as analyse samples, Shefsky will only say Pele is in "non-exclusive discussions" with the South African diamond giant towards a joint-venture agreement. "Yes they are very interested and are keeping close watch over what's been happening here.

"We also have some interest from other major and midlevel companies. Since Genesis, the interest in the project has bordered on overwhelming. There is a lot of potential in these rocks and it's getting very exciting.

"This Genesis is nothing short of an important break-through," says Shefsky, whose company has invested $2 million in exploration at Festival for the past three years.

With the access road complete, Pele plans to collect larger samples from Genesis this fall and step up with an aggressive exploration program into 2003, of this and several other zones on the property.

"We've had an excellent field season and prospecting has turned a lot of these volcanic units, over 25, and several have yet to be tested," says Shefsky.

Independent consultant, Dr. Edward Walker, who processed the sample, says the quality of the diamonds is "quite exceptional" suggesting possible larger carat-size stones are present within a reasonable grade.

"If this sample from Genesis is representative of that whole body it's not too far of a stretch to think it could be economic," says Shefsky.

"This showing is a breakthrough for us because it does have that grade in the zone of economic interest which could be a mine."