Stephan Burnett
Northern News Services

Cambridge Bay (Mar 15/04) - Optimism isn't running short at Diamonds North.

Late February, results from a mini-bulk sample of 514 kg of kimberlite on the Sculptor play, located 225 km north of Cambridge Bay, generated 723 diamonds.

That included some very large stones, one of which measured more than three millimetres in one dimension.

Diamonds North president Mark Kolebaba says there are two trend this company is interested in, which run parallel to each other, on Victoria Island. What the company eventually envisions, said Kolebaba, is a processing plant located halfway between the two structures where these diamonds might be processed.

Kolebaba cautions, however, that while the company's early indications look good, they are still in the exploratory phase and a few steps away from mining the ore.

The King Eider trend runs 25 kilometre long with kimberlite coming in the form of tabular bodies or carrot-shaped bodies.

"We've got a 25 km structure that contains kimberlite on a semi-continual basis," said Kolebaba.

While the Galaxy trend includes disappointing results of the Snow Goose and Gosling plays, Kolebaba said the company has a shot to find more kimberlite along the 20 kilometre-long trend.

On the Galaxy trend, Diamonds North has received some very good microdiamond results.

"What we've we done is flown airborne data and we've got a lot of new anomalies and potentially a new trend," said the Diamonds North president.

Future hopes

Eventually, the company hopes to do a bulk sample of 10 to 20 tonnes. This year though, the hope, or "blue sky" as industry insiders put it, is to find more targets to drill. Access to the site is not going to be a problem, said Kolebaba.

"Cambridge Bay is pretty well equipped. It has a good airport. We can clear ice for an airstrip and shuttle Hercules up to the site," said Kolebaba.

Tech Cominco Ltd. has an option to earn up to 30 per cent on the Galaxy trend by spending $9.5 million over three years. Tech Cominco can earn a total of 70 per cent ownership on the trend by performing a feasibility study and arranging financing through to production.

Diamonds North holds a 100-per-cent interest on the King Eider structure.

The company has collected close to 4,000 samples from several different bodies in the area.

"We'd like to get all results out by the end of the month," said Kolebaba.

Diamonds North plans to spend between $2-$3 million on Galaxy and King Eider exploration this year.

In addition to the King Eider and Galaxy plays, Diamonds North has two other plays on the go. One is located near Kennady Lake, NWT, (about 300 km northeast of Yellowknife) close to claims staked by DeBeers and Mountain Province. Their partner in this play is Southern Era Resources. The ground was awarded to Diamonds North last May.

"We flew the ground last September and October with magnetic airborne surveys," said Kolebaba.

Diamonds North currently has ground crews in the area collecting data.

"We're trying to put together five to 10 targets for drilling in early April and it's interesting because it's right next door to an advanced target," he said.

Diamonds North has uncovered what they believe is another kimberlite field in Nunavut, just west of the Melville Peninsula.

Their ground samples of the area turned up one target with 1,350 grains of indicator minerals, indicating a possibility of kimberlite and potential diamonds.

The claims in this area are close to stakes laid by DeBeers and Kennecott.

Diamonds North has 418,000 acres of staked land in the area and is partners with BHP Billiton on 3.2 million acres.

The company will perform an airborne survey of the area starting March 15.