UPDATE: North Arrow finds diamonds, closes financing

Shares of North Arrow Minerals (CVE:NAR) rocketed more than 50% on Tuesday after the explorer announced the results of drilling at its Pikoo diamond project in Saskatchewan.

While enthusiasm for the Vancouver-based company’s stock has died down somewhat since then – North Arrow is down 4c or 7% to $0.52 Thursday amid a soft mining sector – those who timed their purchases are sitting on a pretty paper profit today.

What got punters excited was a 209.7 kg sample of drill core from the TSX-Venture listed company’s Pikoo property in central Saskatchewan from a kimberlite discovered by North Arrow earlier this year. North Arrow retrieved 745 diamonds larger than the 0.106 mm sieve size, including 23 diamonds larger than the 0.85 mm sieve size.

President and CEO Ken Armstrong said at the time the results where so exceptional that it “establishes Pikoo and the northern Sask Craton as a new diamond district in Canada.”

North Arrow, worth around $23 million in Toronto, is a company formed by Canadian diamond and mining industry royalty in March this year.

Its chairman is Grenville Thomas, founder of Aber Resources and the man behind the discovery of Canada’s second diamond mine Diavik.

Prospecting alongside the colourful Welshman in the early nineties in the high Arctic was his daughter Eira Thomas who is credited with the billions of dollars discovery under Lac de Gras in the Northwest Territories.

She later founded Stornoway Diamond Corp (TSE:SWY) and took over of Quebec’s Renard diamond project.

She left Stornoway two years ago and is now working as an advisor to the North Arrow which also employs a number of her former colleagues. Pikoo is optioned from Stornoway and North Arrow intends to vest its 80% earn-in option.

William Lamb, CEO of Lucara Diamond Corp (TSE:LUC), recently joined the company’s board of directors and Zebra Holdings and Investment, the trust of the legendary Lundin mining family, is the majority shareholder of North Arrow.

In the week before Tuesday’s announcement both Grenville Thomas and Zebra Holding made huge purchases of North Arrow, as part of a private placement that had been ongoing since Aug. 26, 2013

According to Canadian Insider data Zebra Holdings picked up just over 2.7 million shares at $0.45 on Thursday, Oct. 31 and Thomas 1.55 million at $0.40 the day before. Both were part of the private placement ongoing since Aug. 26, 2013.

North Arrow is also advancing a diamond project in Nunavut and in the Lac de Gras district.

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*MINING.com was contacted by Nick Thomas, Investor and Community Relations Manager of North Arrow following publication and he sent us this clarifying statement:

“Both the 1.55M shares purchased by Gren Thomas and the 2.7M shares purchased by Zebra Holdings were part of the 13.625M share / $5.45M private placement that closed on October 31, 2013. The private placement was priced at $0.40 per common share. We have notified Zebra that their insider filing is incorrect and we understand they are in the process of fixing it.

“Mr. Thomas’ remaining purchases were made in the open market prior to October 22nd, as disclosed.

“The private placement financing was initially announced on August 26, 2013 and the participation of insiders in the placement was disclosed at that time. The private placement was re-priced and amended on October 3, 2013 as we were unable to complete the financing on the original terms.

The ‘book’ on the placement was closed on October 24th and the filing for final acceptance from the TSX Venture Exchange was made that day.

The Exchange issued its bulletin approving the financing on Monday October 28th. The treasury was then submitted to our transfer agent and the placement was closed the financing on October 31st.

“North Arrow received the diamond results late on the evening of October 31 and a management trading blackout was implemented that night.”

Interview by Resource Investing News with Ken Armstrong: