Terry Halifax
Northern News Services

Inuvik (Apr 05/02) - The president of one of the Delta's richest resources is holding his cards before making his next big bet.

Leon La Prairie of Darnley Bay Resources says he's going to hold off on any further development until he secures enough working capital for a two-year push on the platinum/palladium/diamond discovery near Paulatuk.

La Prairie is looking to raise a minimum of $7 million before going back to the bay. He says they are seeking a broader base of investors by registering on the US exchange.

Two months ago, Darley Bay made application for qualification with the U.S. Securities Exchange Commission to sell shares in the U.S.

Darnley Bay has issued 26 million shares and is currently trading around 16 cents a share. La Prairie says 98 per cent of the company's share holders are Canadians who don't always hold onto the stock.

"You can always get financing through flow through share in Canada, but as soon as people do that, the shares come right back into the market," he said. "As soon as they get the credit for income taxes, the can sell the shares the next day."

He said they have spent $16 million on the project so far and need a minimum of $7 million for the next phase, which he plans to make a long-term commitment.

"We've been going out there and spending a million dollars and keep going back to the pot, but we don't want to do that anymore," he said. "We want to make sure that when we get up there, we're there for two-and-a-half years."

"Otherwise, you're mobilizing and demobilizing and a third of the money goes down the drain, just through the shortness," he said.

The resource is described by the Geological Survey of Canada as the strongest isolated gravity anomaly in North America.

The gravitational pull is four times stronger than the nickel-copper sulphides in the Sudbury basin and twice as strong as the Bushveld Complex in South Africa, which holds 70 per cent of the world's platinum and palladium.

He said this is the very early stages of a long project and is very confident in the discovery.

"I don't think you'll see another project with the merits of this one anywhere in the world," La Prairie said.

Last year, Darnley Bay surveyed 91 potential targets from the air and narrowed that to 41 targets following ground geophysics surveys. Of those 41, 28 were selected as drill targets. From the 12 that have been drilled so far La Prairie says nine were kimberlite pipes and of those, six were diamond-bearing kimberlites.

"I don't think there's another diamond project in Canada that has that record," he said, adding that of the samples the diamonds were plentiful, but relatively small, measuring 1/2 millimetre to 1 millimetre. He's confident there are bigger diamonds in the ore, but the drilling has been limited to one hole per target.

South African-based diamond giant DeBeers felt confident enough in the discovery to buy 500,000 shares of Darnley Bay and has agreed to do all the analysis of all ore samples. La Prairie says that alone has saved the company over $4 million.

He's had some offers towards financing the project, but is still seeking the right investors.

"Once we raise that $20 million, we'll be up there for two-and-a-half years and there'll be no stopping the program," he said.