• The 2003 Program will be jointly funded as a firm commitment of Diamonds North and Teck Cominco as to $1,500,000 each. Diamonds North will be the operator of the 2003 Program.

• On completion of the 2003 Program, Teck Cominco will have the option to earn an initial 30% interest in the Blue Ice Project by exercising the Warrants for a price of $500,000 and by incurring an additional $9,500,000 in expenditures over 3 years as follows:

  (a) by December 31, 2004, - a minimum of $2,000,000 in expenditures;
  (b) by December 31, 2005, - a minimum of $5,000,000 in expenditures in the aggregate; and
  (c) by December 31, 2006, - a minimum of $9,500,000 in expenditures in the aggregate.
  

  Teck Cominco shall have a one time right to extend the above dates for completion of expenditures by one year by making a cash payment to Diamonds North of $200,000 and maintaining assessment on the claims.

• If Teck Cominco earns a 30% interest in the Blue Ice Project, Teck Cominco may increase its interest to an aggregate 50% interest by incurring an additional $5,000,000 in expenditures, (of which $2,000,000 would be a guaranteed commitment) by the end of the year subsequent to that in which Teck Cominco earned the initial 30% interest.

• If Teck Cominco earns the additional 20% (for an aggregate 50% interest), Teck Cominco may increase its interest to an aggregate 65% interest by funding all continuing exploration expenditures to the completion of a Feasibility Study with respect to developing a mine on the Blue Ice Project.

• If Teck Cominco has not commenced a Feasibility Study within three years of electing to earn the additional 15% interest, Teck Cominco may either:

  (a) extend the period for commencing a Feasibility Study by three years by committing to incurring $6,000,000 in expenditures over such three year period; or

  (b) give Diamonds North the right to terminate Teck Cominco's right to earn the additional 15% interest by paying Teck Cominco 35% of the expenditures incurred from Teck Cominco's election to earn the additional 15% interest, at which time a joint venture would be formed with Diamonds North acting as operator. Diamonds North may elect to exercise this right or grant Teck Cominco an extension of three years to commence a Feasibility Study with no minimum yearly expenditure requirements.

• Upon earning a 65% interest, Teck Cominco may earn an additional 5% interest in the Blue Ice Project by arranging or providing all project financing. In consideration for the financing, Diamonds North shall also provide Teck Cominco with the right (but not the obligation) to market Diamonds North's share of production until one year after the payback of the initial development cost.

• Once Teck Cominco has ceased to solely fund expenditures as above, the parties shall operate the Blue Ice Project on a joint venture basis. Except as noted above, assuming Teck Cominco holds a minimum 50% interest at the commencement of the joint venture, Teck Cominco shall be the operator.

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