Lytton also said it bought exploration assets at its Jericho site as well as data management systems.

Lytton is planning to become one of Canada's first commercial diamond producers through its Jericho diamond mine in the Northwest Territories.

Jericho is located northeast of Yellowknife along Contwoyto Lake near Echo Bay's Lupin gold mine.

Tuesday's announcement came only a day after Lytton closed a $4.2 million private share placement.

The diamond lab includes wet sorting and caustic fusion facilities and a DMS plant. Lytton president Glenn Laing did not return our calls.

The exploration equipment includes the 40-man all-weather Carat camp at the Jericho site and other equipment.

The data management system will handle Lytton's geological and geophysical data base resulting from the company's five-year diamond exploration program in the North.

Total consideration, made up of shares and a small amount of cash, for the lab, exploration assets and data systems was $1.5 million which includes $100,000 cash and 909,500 Lytton shares at $1.50 each.

The acquisition is subject to regulatory approval.

"The acquisition of a diamond mineral laboratory, exploration assets and data management systems is a further step in the progress of Lytton to establish itself as an independent integrated diamond exploration and development company," the company said.

Lytton is currently exploring in the NWT and Alberta for its own account. The company also has joint ventures with Kennecott Canada Exploration Inc. and Ashton Mining Inc.