KUGAARUK/PELLY BAY - Two years ago, just weeks before the economic slowdown sent junior exploration companies into hiding, Diamonds North Resources spent more than $10 million looking for diamonds at its Amaruk project south of Kugaaruk, creating work for about 20 people from Kugaaruk and Repulse Bay.

John Sivanertok of Repulse Bay readies core boxes at the Amaruk exploration project, located approximately 40 km south of Kugaaruk. Amaruk, owned by Diamonds North Resources, is seeing reduced activity on-site for the second year in a row, with fewer jobs available for local residents. Promising gold and diamond showings could boost activity again, says the president of Diamonds North. - photo courtesy of Diamonds North Resources

Last year – as happened with many other companies – Diamonds North clamped down on spending, devoting only $1.5 million to its summer work.

This year's budget is on par with last year's, with four to six people from Kugaaruk and Repulse Bay working amidst a total workforce of 17 – and many locals submitting their resumes, according to Mark Kolebaba, president and CEO of Diamonds North.

"They're helping with the exploration side of things and management of the camp," said Kolebaba of those currently employed. "We've got guys who've been working here for a number of years."

In addition to purchasing supplies from the Koomiut Co-op in Kugaaruk, Diamonds North often asks the hamlet to recruit workers to help offload supply planes landing in the community.

But overall, the amount of available work is small. Residents might wonder: what will it take to drive activity back to the levels seen in 2008?

Kolebaba has an answer: Beluga 3.

Referring to the most promising deposit discovered at Amaruk thus far, Kolebaba said, "If we come up with coarse diamonds (there), we're going to be going big again."

Prior work at Amaruk suggests Beluga 3 contains larger, commercially viable diamonds, whereas 90 per cent of the kimberlites discovered so far on-site are fine (read: not big enough to bother with).

To confirm Beluga 3's promise, the company is extracting a 25-tonne bulk sample for analysis.

Besides that, promising gold showings could also spur more activity at Amaruk, added Kolebaba.

"Our overall focus is still diamonds, but we are looking at these other commodities because we've

got them," he said.

Diamonds North isn't the only company exploring at the Amaruk site. In March, the company formed a joint-venture with MMG Resources Inc.. MMG, another player in the Nunavut exploration industry, is developping the Izok Lake zinc-copper-lead-silver project at the opposite end of the Kitikmeot region, approximately 245 km from Kugluktuk.

The agreement allows MMG to stage its own nickel exploration program at the Amaruk site; the company is spending $2.2 million in its first year.

Canute Krejunark, former mayor of Kugaaruk, said that while the community remains concerned about possible environmental contamination resulting from exploration or mining work, it is nevertheless glad to see some of its residents receive employment at projects at Amaruk, temporary as it is.

"We don't have a lot of jobs here, especially for the young people," he said.