Feb 15, 2007 : New Diamond Discoveries on Amaruk more...
Jan 10, 2007 : Diamonds North and Majescor Identify High Priority Drill Targets on Ba... more...
Jan 08, 2007 : Amaruk Project Update Diamond Results Pending for Five Kimberlites - P... more...
Dec 04, 2006 : Uranium North Set To Close Financing And Commence To Trade more...
Nov 16, 2006 : Diamonds North Announces Closing of $7 Million Private Placement more...
Oct 26, 2006 : $6 Million "Bought Deal" Financing more...
Oct 12, 2006 : Diamonds North and Arctic Star to Explore in Canada's Newest Kimberlit... more...
Oct 05, 2006 : 19 New Kimberlite Float Occurrences on Amaruk Further Demonstrates the... more...
Sep 27, 2006 : Drill Targets Identified on the Ualliq property more...
Sep 20, 2006 : Diamonds North Increases Kimberlite Tally to Five Demonstrating Amaruk... more...
Aug 23, 2006 : Target Testing Underway at Amaruk -- New Kimberlite Discovered more...
Aug 15, 2006 : Shear Minerals and Diamonds North to Explore the Sakari property more...
Aug 02, 2006 : Diamonds North and International Samuel to Explore the Ualliq property more...
Aug 01, 2006 : Diamonds North Closes Plan of Arrangement for Shareholders to Receive ... more...
Jul 19, 2006 : Diamonds North sets Effective Date for Shareholders to Receive Uranium... more...
Jul 17, 2006 : Pathfinder Starts Major Airborne Geophysical Survey at Thelon Basin Ur... more...
Jul 14, 2006 : Diamonds North Grants Options more...
Jul 13, 2006 : Diamonds North To Drill The Amaruk Project more...
2006 | 2005 | 2004 | 2003 | 2002
Fri Aug 29, 2003
Summary Report of Second Quarter
Vancouver, August 29, 2003 -- Diamonds North Resources Ltd. (DDN-TSX Venture) has released its B.C. Form 51-901F second quarter report containing financial statements in Canadian funds, prepared without audit, for the six months ended June 30, 2003. Pursuant to the requirements of National Instrument 54-102, this news release provides a reasonable summary of the information contained in the quarterly report. Concurrently with this news release the Company is filing the quarterly report with the regulatory authorities through SEDAR (www.sedar.com) and has mailed it to shareholders whose names appear on the Company's supplemental list.
The Blue Ice Project is located 240 kilometres west-northwest of Cambridge Bay in the Central portion of Victoria Island and is 100% owned by the Company. On June 18, 2003, the Company entered into a participation agreement with Teck Cominco Limited ("Teck Cominco") where under Teck Cominco completed a $1.0 million dollar private placement for 909,091 units at $1.10 per unit with each unit consisting of one common share and one half warrant and by funding 50% of the $3.0 million 2003 exploration program. On completion of the 2003 exploration program, Teck Cominco shall have the right to elect to earn the following interest in the Blue Ice Project:
- an initial 30% interest by exercising the warrants for a price of $500,000 and by incurring an additional $9.5 million in expenditures over 3 years;
- on earning a 30% interest, an additional 20% (for an aggregate 50% interest) by incurring an additional $5.0 million in exploration;
- on earning a 50% interest, an additional 15% (for an aggregate of 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; and
- on earning a 65% interest, an additional 5% (for an aggregate of 70% interest) by arranging or providing all financing for a mine on the Blue Ice Project.
This is an exempt transaction under the policies of the TSX Venture Exchange.
The proposed $3.0 million 2003 field exploration program will run from June to September and consists of the following three phases:
- Phase 1 will focus on drilling kimberlite along the SE or Nunavut portion of the Galaxy Structure to acquire larger volumes of kimberlite from bodies that yielded high diamonds counts in the 2002 exploration program. The phase 1 drill program is underway.
- Phase 2 will focus on drilling larger kimberlite targets within the NWT portion of the Galaxy Structure. These targets were not drilled in 2002 as the land use permit application for NWT was still in progress. Land use permits have been granted and phase 2 drilling will commence in early August.
- Phase 3 will be a detailed heli-borne geophysical survey over the remaining 75% of the Blue Ice property that has not been flown with detailed geophysics or sampled for heavy minerals. The heli-borne geophysical survey will commence in early August.
Additional ground geophysics and trenching programs will support phase 1 and 2 exploration. The exploration program was prepared by the Company's management and in consultation with the project partner. The fieldwork is supervised by David Kelsch, the Victoria Island project manager who is the Qualified Person on the property.
The phase 1 drill program commenced on June 26th and at June 30th, the Company had completed two drill holes totaling 164.6 metres. It is too early in the program for any meaningful variance interpretation. Included in the $668,261 are fuel and salt supplies for the entire drill and the cost mobilizing these and other supplies to Victoria Island.
The airborne geophysics program will commence in August and will cover approximately 75% of the property that has not been previously flown. The $200,000 in expenditures includes fuel and other supplies and the cost of mobilizing theses supplies to Victoria Island.
The ground geophysics program commenced on June 8th and at June 30th, the Company had completed 209.1 line kilometres ("lkms"). The ground geophysics program unit cost per lkms was budgeted at $900 per lkms and the estimated cost is $650 per lkms. The lower than expected cost per lkms is due to the close proximity between grids.
The ground geophysical program was used to identify targets and spot drill holes. The geophysical data was interpreted by LithoQuest International Mineral Exploration Services. Drilling commenced on June 26th and the first series of core samples was submitted to SGS Lakefield Research in July. SGS Lakefield's standard caustic fusion diamond recovery method will be utilized for all samples. Exploration results are anticipated in the third quarter.
The Company would like to make a correction to News Release #10-02 distributed September 5, 2002. Survey crews have discovered the drill hole reported as the Gosling kimberlite was actually drilled 250 metres to the southeast and puts the drill hole into the western portion of the Snow Goose kimberlite. The discrepancy is due to the use of different NAD (National American Datum) co-ordinates by the previous operator. The Gosling remains a magnetic anomaly and is planned to be drill tested in the future.
Management is pleased with the current progress to date but acknowledges that it is still in the early stages of the 2003 exploration program. The drill and airborne programs should be completed by September. The first series of exploration results is anticipated in the third quarter and will continue through to the first quarter of 2004.
The Wellington Project is located immediately east of the Blue Ice Project and is under a letter agreement with Majescor Resources Inc., who can earn a 50% interest in the project by spending $2.25 million before December 31, 2005. During the 2002 exploration program, airborne geophysical surveys identified six pipe-like and six dyke-like anomalies, which have magnetic signatures similar to known kimberlites on Victoria Island.
The proposed 2003 exploration program consisted of a 500 metre drill program to test four to five targets identified in 2002 which will be first verified using ground geophysics. The exploration program was prepared by management and in consultation with the project partner. The fieldwork was supervised by David Kelsch, the Victoria Island project manager who is the Qualified Person on the property.
The ground geophysics program commenced on June 2nd and was completed on June 12th. The Company completed 64.3 lkms. The ground geophysical program was used to identify targets and spot drill holes. The drill program commenced on June 11th and was completed on June 25th. The Company completed four drill holes totaling 349.5 metres over three anomalies. The drill program encountered several problems including two bad weather days, high salt consumption, the breaking and loss of drill rods in holes one and two, and increased drill labour charges associated with the fore mentioned. The drilling and geophysical programs include fuel and other supplies and the cost of mobilizing theses supplies to Victoria Island. A final accounting of the supplies will be conducted at the end of the Victoria field exploration programs and programs will be adjusted accordingly. No kimberlite was intersected by the drill program.
Further work is planned this summer to isolate a source for the known kimberlite indicator minerals on the Wellington property by prospecting on other geophysical targets and till sampling. In addition, trenching on a known kimberlite dyke identified in 2002 is planned to collect a large enough sample for analysis. No work was performed last year on this kimberlite dyke due to permafrost.
The Hadley Bay Project is 100% owned by the Company and the project is located immediately northeast of the Blue Ice Project. By a letter agreement, an option was granted to Canabrava Diamond Corporation ("Canabrava"), whereby Canabrava could earn a 50% interest by expending $5,000,000 on the property and issuing 250,000 common shares to the Company by May 2006. On May 2, 2003, Canabrava notified the Company that it has terminated the letter agreement.
The Company holds a 90% interest in the Yankee Project and the project is located 215 kilometres west-northwest of Cambridge Bay. By a letter agreement dated April 25, 2003, the Company and Hawkeye Gold & Diamonds Inc. ("Hawkeye") agreed to settle property interest, debt and all other outstanding issues relating to the Yankee Project by Hawkeye agreeing to reduce its interest from 33 1/3% to a 10% carried interest until May 31, 2004. On June 1, 2004, the carried interest is automatically converted to a 10% working interest which is subject to dilution.
The Holman Project is located immediately west of the Blue Ice Project area on the NWT portion of Victoria Island. The Company holds a 100% interest in the Holman Project and an option has been granted to Serengeti Resources Inc. ("Serengeti"), whereby Serengeti may earn a 50% interest in the property in consideration of a cash payment of $50,000, expending $2,050,000 on the property and issuing 200,000 common shares to the Company by June 30, 2005. On June 19, 2003, the two companies amended the original letter agreement and the amendments have been approved by regulatory authorities as follows:
- the Company has added the Mon 76 claim and eight additional claims to the Holman Project in consideration for 100,000 common shares of Serengeti (received) and three claims being returned to the Company;
- an additional 100,000 commons shares of Serengeti will be issued to the Company, if the two circular geophysical targets on the Mon 76 claim are proven to contain kimberlite via drill testing and;
- a one month extension to July 31st, 2003 for Serengeti's funding commitments for 2003.
The Company has a 40% interest in the 71,000 acre Misty Lake Project located 270 kilometres east of Yellowknife. The Misty Lake Project is adjacent to the south west boundary of De Beers/Mountain Province Diamond's Kennady Lake project, where more than $ 3 billion worth of diamonds have been outlined in pre-feasibility. The Company and joint venture partner SouthernEra Resources Ltd. completed drilling of five geophysical targets on the Misty claims and no kimberlite was intersected.
The four GTEN claims are located close to the large Drybones Bay kimberlite, 40 kilometres southeast of Yellowknife, N.W.T. and cover 2,169 acres. The Company holds a 50% interest and an option has been granted to Snowfield Development Corp. ("Snowfield"), whereby Snowfield may earn a 50% interest in the Company's interest in the project by expending $950,000 on the claims by 2004 and issuing 250,000 common shares (received) to the Company over two years. The Company and Snowfield completed a 9 hole drill program and no kimberlite was intersected.
The Company owns 40% of the 90,000 acre Kidme Project situated adjacent to the eastern border of the Misty Lake property and to the south of the Kennady Lake project. The Kidme claims were awarded to the Company and SouthernEra Resources Ltd. On May 2, 2003, Indian and Northern Affairs Canada released the findings of a federally appointed tribunal established to review a seven year mineral claim dispute in the Northwest Territories whereby the Tribunal upheld a decision made by the Supervising Mining Recorder in May 1996, thereby awarding the Doyle Lake claims to GGL Diamond Corporation and the Kidme claims to the Company and SouthernEra. The decision was subject to a 30 day appeal by the contesting party which passed on June 1, 2003.
On July 11, 2003, the Company reported that the Company and De Beers Canada have amended the Victoria Island Mon Claim Sales Agreement. The original agreement provided the Company with 100% ownership of the isolated claims with De Beers Canada holding the right to market diamond production from the Mon claims. In the amended agreement, De Beers Canada retains the right to market 35% of any production from the Mon claims. De Beers Canada continues to hold a Royalty of 1.5% payable on any production from these claims. Five of the Mon claims are located on the Blue Ice Project, sixteen are on the Hadley Bay Project and one is on the Holman Project.
For the six months ended June 30, 2003, the Company incurred a loss of $491,878 or a $0.04 loss per share. General and administrative expenses for the period were $456,398. Other income included interest income earned on deposits of $23,272 and mineral property transactions earned on operating exploration projects of $80,657. Other expenses included property investigation of $41,760 incurred for the evaluation of un-staked land and $74,443 in stock-based compensation expense relating to stock options granted to non-employees. During the quarter, management of the Company determined that a grass roots property in Alberta did not warrant further exploration and accordingly the $23,206 in deferred exploration cost was written off.
For the three months ended June 30, 2003, the Company general and administrative expenses were $250,001 compared to $206,397 from the previous quarter. Significant changes include consulting fees, legal fees, rent and wages and benefits. Consulting fees for the current quarter of $14,597 reflects the Company's efforts to expand financial markets ($8,996) and improve its financial systems ($1,500). Legal fees for the current quarter of $22,505 reflect the involvement of the Company's lawyer in the participation agreement with Teck Cominco Ltd. for the Blue Ice project ($17,733). Rent expense has increased slightly compared to last year as a result of the Company acquiring more office space to accommodate the increase in employees. The Company entered into a lease agreement for additional office space commencing on May 1, 2003 to February 29, 2004. Wages and benefits expense of $71,046 includes the addition of an exploration manager, geologist and part-time controller.
For the six months ended June 30, 2003, mineral property expenditures include acquisition costs of $356,360 and exploration costs of $1,903,850. In February and March, the Company staked approximately 449,000 acres of new land on Victoria Island bring the Company's land position to 2.0 million acres. The largest exploration expenditures are drilling ($1,055,101) and geophysics ($476,317) which both include supplies and transportation cost of supplies for programs that will run from June to September. Mineral properties recoveries for the period were $959,665 which includes project partner's recoveries of $893,459 and $43,000 in option payments paid through the receipt of 250,000 common shares at deemed prices $0.13 to $0.20 per share.
At June 30, 2003, the Company had working capital of $2,448,810 which is sufficient to achieve the Company's planned business objectives for fiscal 2003. Subsequent to June 30, 2003, the Company received $1,174,083 from the exercise of 2,007,375 share purchase warrants and along with the private placement completed below will provide the Company with sufficient funds to fiscal 2004.
Subsequent to the end of the period, on August 22, 2003, the Company completed a private placement of 2,921,625 flow-through common shares at a price of $0.80 per share. Finder's fees aggregating $138,390 were paid in cash and an option to purchase common shares at a price of $0.80 for a period of one year was granted to each of the following agents: Dundee Securities Corp. as to 77,250 warrants, First Associates Investments as to 750 warrants, Canaccord Capital Corporation as to 37,987 warrants, Haywood Securities Inc. as to 3,750 warrants and Dominick & Dominick as to 37,500 warrants.
Subsequent to June 30, 2003, the Company commenced an action against Canabrava Diamond Corporation to recover an outstanding receivable.
For further information, please contact:
Corporate Communications: Nancy Curry
Diamonds North Resources Ltd.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release
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