Terry Halifax
Northern News Services

Paulatuk (Aug 14/00) - The world's largest diamond company will be helping to finance what could be a major diamond discovery in the Inuvialuit Settlement Region.

De Beers Consolidated Mines Ltd. of South Africa will be providing Darnley Bay Resources Ltd. with $500,000 towards exploration of the 10,000 square kilometre site located on the arctic coast, 400 kilometres east of Inuvik.

The Toronto-based Darnley Bay had been exploring the area with intentions of mining a large anomaly for the presence of nickel, copper and platinum group elements when they discovered diamonds in some samples last year, said Darnley Bay president Leon F. La Prairie.

"The odds of that coming up in till sampling is about one in 25,000," he said. "We're not trying to take anything away from the base metal discovery, but we'll take whatever comes our way."

The discovery was made through the Geological Survey of Canada, but it was La Prairie and Darnley Bay who first jumped on the large anomaly.

"There is something very, very heavy in the ground there," he said. "The whole strength of the thing is four-times the strength of the Sudbury Basin and Sudbury produces about $2.2 billion worth of minerals per year."

The De Beers exploration began last week and will continue while weather permits.

"They started to fly it last Thursday (July 3) and then on top of that we have started to do a till sampling and ground geophysical program which began last Friday (Aug. 4)," La Prairie said. "We should be bringing the drill in to start drilling the diamond signatures within the next two or three weeks.

"De Beers have taken our tapes from 1997 and they have reviewed them," he said. "They modelled 14 potential kimberlite pipes and our own consultants modelled 39."

La Prairie said they had 22 samples completed before winter set in last year. De Beers will be taking over the sampling for this year.

"They will be in there with their own crews by the middle of the month," he said.

"Besides that, they will be doing all the processing of our samples and we should be taking anywhere from 1,000 to 1,500 samples."

He said the diamond firm will conduct the testing of the samples which, commercially, would cost about $600 per sample. Once the results are in, the two companies may form a partnership.

Also holding a stake in the Darnley Bay site is Falconbridge Ltd., the world's second largest nickel producer. While their interest is in the base metals, not diamonds, they will also have rights to the diamonds. La Prairie said Falconbridge is also in a joint venture in Africa with De Beers.

Darnley Bay has spent over $11 million on the project to date.