Yellowknife (Oct 08/03) - There's another player in the ever-growing NWT mining industry.

Tyhee Development Corp. is in the gold business but knows that diamonds may be lurking beneath its property, the old Discovery Mine and the neighbouring Nicholas Lake.

"We've been aware of this for a while. We wrestled with the idea of exploring for diamonds ourselves but rather than being all things to all people we decided to bring someone else in," Tyhee president David Webb said Monday from his office in Vancouver.

Enter Jacques Letendre, head of Majescor Resources and a former director of exploration with Monopros Ltd., a Canadian subsidiary of De Beers.

"He's a mining guy. He knows the area. He knows the people and likes the area. That's why we brought them in. We wanted to deal with pros," Webb said of Letendre.

Majescor and Tyhee reached an agreement on Sept. 25, just days after getting in touch.

"We didn't want to get beyond our capabilities. We are a gold company. We wanted to bring in someone else who can do it," Webb said.

The two companies are optimistic at the chances of finding diamonds.

"There's been a lot of activity from other diamond companies in the area. The Tyhee land is surrounded by BHP (Billiton Diamonds) property and they've been active," said Letendre from his office in Montreal.

Win-win partnership

Through their agreement, Majescor can reap 100 per cent of Tyhee's rights and interests in diamonds, with Tyhee retaining a four per cent gross overriding royalty.

"It's a good deal for Tyhee. They don't want to get involved in diamonds. If we do find something they will benefit," said Letendre .

Webb said the deal affects Majescor much more.

"They get 100 per cent rights and interests. It won't hurt us though. There are other advantages with spinoffs. When you dig for diamonds, gold is often found," said Webb, who was employed at Con Mine and junior companies before starting Tyhee almost 10 years ago.

Tyhee will also have access to the exploration data Majescor uncovers.

It was unclear whether Majescor had started drilling on the property yet.

Letendre said this was one small project in their portfolio and wasn't sure if drilling had started yet.

Webb thought drilling had started and was hoping to hear some news in the coming weeks.

Is there gold?

While Majescor is looking for diamonds, Tyhee just finished their own drilling for gold and are awaiting news on their samples.

"Our samples are being processed and shipped to the south. We expect to have news in about three weeks," said Webb.

Webb is confident they will have a hit. "We were looking at a low risk target. We know that back in the 50s Discovery Mine had three drill holes. We drilled in between those so we are reasonably confident we will hit," Webb said.

"The old adage is go look to the old mines if you want to find a new one," Webb said.