NNSL (Mar 18/98) - Canadian Diamonds International, the firm that is considering establishing a cutting and polishing plant in Yellowknife, is still negotiating with the territorial government.

"No decision has been made but we are continuing to hold talks and discussions with the territorial government," said Myrna Higgs, CDI's vice president of administration and corporate affairs.

CDI was reportedly on the verge of establishing a diamond-cutting and polishing plant in Calgary when it was invited to visit Yellowknife early last month.

Following that visit CDI made a proposal to the territorial government.

Higgs would not say whether CDI is still pursuing an arrangement with the Alberta government.

"At the moment our focus is on Yellowknife. We really don't want to be perceived as playing both ends against the middle."

Last month Higgs said the company hopes to get access to the NWT diamonds. BHP will start producing the first Canadian diamonds later this year.

CDI's interest in setting up in Yellowknife was undoubtedly fuelled by the government's offer to purchase up to 10 per cent of BHP's production. The government made the commitment in an attempt to cultivate secondary diamond industries, such as cutting and polishing, in the North.

Canadian Diamonds principals are Belgians Herman Habraken and Laurent Martens.