Since historic times, the clarity and value of rubies have been praised in works of literature- from the Bible to the Metaphysical Poets. Now investors are discovering a modern-day version of these same qualities as True North Gems (TSX.V:TGX) enters a new chapter in the saga of its Fiskenaesset Ruby Project in Greenland. As per its September 18th press release, the company announced visible ruby and pink sapphire mineralization in 12 of 25 holes drilled as part of the ongoing 5,000m drill program. So far, a total of 2,313.5m has been drilled with the depth of individual holes ranging from 50.3m to 221.9m, with individual crystals ranging from less than 1mm to 10mm in size.

The Fiskenaesset Ruby Project covers a sizeable 110km2 of land and is located on the southwest coast of Greenland, about 160km south of the capital Nuuk. True North has an option to own a 100% interest on the claims. Logistical support for the project is much easier than one might imagine. The warming effect of the Gulf Stream current keeps Greenland’s west coast ice free year-round, and facilitates the timely transport of materials and personnel to the Fiskenaesset site. The exploration season at the Fiskenaesset location is longer than the Company’s Canadian arctic projects and a commercial operation would enjoy a long work season in a maritime climate.

The Geological Survey of Greenland and Denmark (GEUS) first discovered rubies in outcrop in this area in 1966. True North has worked on the project since 2004, doing bulk sampling, mapping and drilling, and is now in the permitting and scoping stage. The company has recently hired Wardrop Engineering, one of the world’s top engineering firms, to carry out its scoping study as part of the project’s feasibility preparations. True North also has emerald and sapphire properties in the Yukon and on Baffin Island.

The Aapaluttoq (Greenlandic for ‘Big Red’) occurrence contains ruby and pink sapphire. The rubies and sapphires (both are varieties of the mineral corundum) occur in a highly altered zone between ultramafics and anothosite schists. This alteration zone has significant potential to provide the tonnage and grade required to justify a viable mine. There are many more occurrences on this very large property that have yet to be drilled. An encouraging factor is that the best stones come from the thickest parts of the altered zone. Overall grades point to a commercial viability scenario, with concentrations of high-quality gem-grade ruby and pink sapphire averaging 1,937 g/tonne (9,685 carats/tonne) from a 30-tonne sample. Rubies are rarer and can be more valuable than diamonds, and large, high quality rubies can sell in the range of US $1,450-$25,000 per carat.

Independent valuations have priced a 0.69 carat ruby from Aapaluttoq at $3,220/carat, and a 0.96 carat pink sapphire at $460/carat. The best sample contained a large ruby crystal weighing 88g (440 carats), which was carved into the Kitaa Ruby, weighing 302 carats and displaying intricate scenes of oceanic legends.

Presently, over 90% of the world’s rubies come from one country– Myanmar– better known as Burma. There is currently a UN trade embargo against the country due to the military junta’s human rights abuses, and the country is becoming increasingly unstable in the wake of this week’s protests (already dubbed the ‘Saffron Revolution’) led by thousands of Buddhist monks and nuns. The military enriches itself through black market ruby sales– similar to the ‘blood diamond’ trade in some African countries. Slave labour is also used in Burmese ruby mining and processing. To date, the economics of processing have favoured hand-sorting of coloured gems in low-wage countries. However, recent developments in improved exploration methods and in optic sorting technology have made it possible for high-wage countries to gain a competitive advantage.

True North is in a unique position to create not only value for investors and consumers, but positive social change for the gemstone market. The gemstone manufacturers and prominent jewellery retailers such as Tiffany’s have boycotted Burmese rubies– thus creating a large vacuum on the supply side – one that True North can step right into. History has shown that consumers are willing to pay a premium price for high-quality, ethically sourced gemstones – as evinced by the success enjoyed by Diamet with the cachet of its ‘Polar Diamonds’. True North is well-placed to become its coloured gem counterpart.

According to the company’s Greenland Ruby Project Fact Sheet, 2006 saw a Christie’s St. Moritz auction set a new per carat record for ruby. An 8.62 carat ruby sold for $3.6 million US, or 425,000US per carat. Rubies that are completely untreated and still of excellent quality command a large premium.

As the company moves into the test marketing phase of its development, it has forged relationships with the well-established cutting houses centred in Asia. In India, where ruby demand has always been strong, the gemstone market has been picking up following increasing customer demand. According to a survey, the jewellery market in the country has been growing at a rate of 20 per cent annually. To meet the demand, new, reliable sources of rubies need to come on stream.

True North’s goal is to become the Arctic’s first producer of coloured gems. Several factors are in place that point to the realization of this goal: experienced, focused management with an integrative approach to the gem business, a high-quality gem project at an advanced proving stage, the high-tech advantage, and an accessible price point for near-term gain. The company has a loyal core of retail investors and is beginning to turn heads among the institutional crowd. With regards to its investors– in a twist on a line from the Book of Job – the True North story could easily be a case of wisdom being as precious as rubies.

TGX closed unchanged Wednesday at $0.49 on a volume of 29,562 shares.

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