"Chad Ulansky and Chuck Fipke's Metalex Ventures Ltd. (MTX), up one-half cent to five cents on 73,000 shares, is still treading water at its U2 project in the Kyle Lake region of Northern Ontario. The company endured a three-year wait for the Ontario government to award permits for a winter road extension from Victor to U2, about 60 kilometres to the west, and for other work related to the company's planned 10,000-tonne bulk sample of the big but low-grade pipe. (The slower-than-molasses Ontario bureaucrats took two years to approve a mini-bulk test of the nearby T1 and U2 pipes in the late 2000s; they also dithered so long that Cliffs Natural Resources Inc. gave up on the massive Ring of Fire chromite play last year.)

Unfortunately, Metalex must leap two other big hurdles before it can start the tests. Mr. Ulansky, president and CEO, and Mr. Fipke, the company's chairman, founder and major shareholder, remain engaged in "continued discussions" with the local first nations -- the Attawapiskat and Marten Falls bands -- "in an effort to secure a signed agreement." While a signed agreement with the locals might make the bulk sample more likely to commence, it is no guarantee of an uneventful program: winter road roadblocks have been an all-too-common event since De Beers began producing diamonds at Victor, despite an array of agreements.

The other hurdle is cash. Metalex says it is "in the process of securing the funding for the bulk sample," but the process of finding the $20-million needed to complete the test is more convoluted than even the company's dealings with the bureaucrats and the Indians. In early 2012 Metalex attracted Ned Goodman's Dundee Corp. (DC.A: $9.65) to the project. Dundee agreed to invest up to $51-million in stages to earn up to a 51-per-cent interest in U2 but it walked away from the arrangement last summer, ostensibly because of the interminable wait for the permits, but its own cash woes were a key factor as well.

Mr. Fipke and Mr. Ulansky will have to convince their prospective new backers that U2 has a good shot at success, despite it grading of just 0.1 carat per tonne in its 400-tonne mini-bulk test in the late 2000s. Fortunately, Mr. Fipke and his crew point out that nearly 90 per cent of the U2 diamonds are white, unlike most other deposits where unattractive greys and browns dominate. He also touts the U2 mineral chemistry in the context of De Beers's Victor mine, which has an unusually high diamond value. (The market still listens when Mr. Fipke talks diamond chemistry, although the company's chart suggests investors are becoming increasingly hard of hearing.)"