Drill it and they will come

griz

Anglo Swiss plots new gem program 2008-01-03 17:00 ET -

Street Wire by Will Purcell

Len Danard's Anglo Swiss Resources Ltd. plans more drilling on its Fry Lake project north of Lac de Gras in the Northwest Territories. The company is waiting for results from kimberlite core samples it drilled up last year to provide the focus for a new program, but Mr. Danard said there was no question that Anglo Swiss would be focusing on Fry Lake again this year. Earlier work produced encouraging results. The plan Anglo Swiss initially hoped to complete 1,500 metres of drilling late last summer. That suggested the company could complete as many as 10 tests into targets on a property 50 kilometres north of the Ekati diamond mine and about 80 kilometres south-southeast of the Jericho mine. The program sought to test a cluster of seven anomalies on the project, including an old kimberlite find, LI-201. Like many other explorers this year, Anglo Swiss faced several equipment and weather problems that delayed the start of its work until the latter half of August. Although the program fell somewhat short of its initial plan, the company did manage to keep its drill turning until mid-September, spending over $500,000 on the project. Anglo Swiss did drill two holes into the LI-201 body, recovering enough kimberlite to send off for processing. Mr. Danard said he was not making promises about when the diamond counts would be available, as he had been expecting the tallies before the end of 2007. He is clearly hoping the tallies will be available soon, as Anglo Swiss will be holding a meeting this month with the project geologists to review the 2007 results and make new plans for this year. Investors are also hopeful, having driven the stock up from 12 cents in September to a 67-cent peak in November. After falling in half by mid-December, a New Year's promotion has helped it back to 46 cents. Exploration plans could carry a significant budget, based on the terms of a 2005 option agreement covering the Fry Lake property. To earn its 60-per-cent interest from New Shoshoni Ventures Ltd., Anglo Swiss must spend $6.2-million over a five-year period. The company had to spend just $200,000 in the first year of the deal, but the requirement doubles in each of the following four years. Mr. Danard said that Anglo Swiss "was well funded" for its Fry Lake plans, a big change from a year ago. Anglo Swiss's shares bumbled along below a dime for much of the year. At the start of October, the company had less than $200,000 in working capital, but a surging share price offered an opportunity to top up its treasury. In November, Anglo Swiss said it hoped to sell about $5.0-million worth of new shares and by the end of the year it came close, adding about $4.3-million to its coffers through the sale of 9.8 million shares. The biggest buyer was MineralFields Group, a Toronto-based mining fund that bought shares in several other gem hunters over the past year, including Shear Minerals Ltd., Grizzly Diamonds Ltd., Arctic Star Diamond Corp. and Dentonia Resources Ltd. The Fry Lake property lies on the northeastern fringe of the Lac de Gras district and some significantly diamondiferous pipes are just to the south and west. The Ranch Lake pipe is about 30 kilometres to the west and the Torrie kimberlite is 25 kilometres to the south. Both received mini-bulk tests in the 1990s, after producing encouraging diamond counts. Anglo Swiss's LI-201 kimberlite yielded 60 diamonds larger than a 0.15-millimetre mesh from less than 300 kilograms of rock when Kennecott Canada Exploration Inc. tested the seemingly small body in the 1990s. Mr. Danard thinks Kennecott missed the main part of the body, and if Anglo Swiss comes up with better diamond tallies and some larger stones, it will receive more drilling this year. Anglo Swiss closed down 1.5 cents to 46 cents Wednesday on 116,900 shares