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# Wed Dec 3, 2003
Summary Report of Third Quarter


Vancouver, December 3rd, 2003 -- Diamonds North Resources Ltd. (DDN-TSX Venture) has released its B.C. Form 51-901F third quarter report containing financial statements in Canadian funds, prepared without audit, for the nine months ended September 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 ( and has mailed it to shareholders whose names appear on the Company's supplemental list.

Diamonds North Resources Ltd. ("the Company") is a development stage company engaged in the acquisition and exploration of diamond properties in Canada. The Company is currently focusing it's exploration activities on Victoria Island, which covers part of Nunavut ("NU") and the Northwest Territories ("NWT").

Blue Ice Project, Victoria Island
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.

Management of the Company prepared a $3.0 million 2003 field exploration program designed to collect larger samples from kimberlite bodies discovered in 2002 and to tests other targets along the Galaxy structure. The drill and trenching programs were designed to collect up to 3,000 kgs of kimberlite. In addition, a detailed heli-borne geophysical survey was flown over 75% of the Blue Ice property that had not been previously flown with detailed geophysics.

The drill program completed 1,833 of the budgeted 3,325 drill metres. The cost per metre drilled is $300 more than the budgeted $500 per metre. Cost overruns were do to excessive overburden on the Carina and Centaurus drill targets; bad weather and other drill related problems which resulted in standby charges and high salt consumption. This year, the Company utilized a larger 2 ¼ diameter NTW drill which resulted in higher than budgeted salt consumption. An additional 1,200 bags of salt were purchased for an all-in cost of $105 per bag.

The Company collected approximately 4,000 kgs of kimberlite (based on field weight) from drilling and trenching which is 1,000 kgs more than budgeted. The combined cost of the drill and trenching programs was $89,543 under budget. By September, over half of the kimberlite samples had been sent to SGS Lakefield Research for processing. SGS Lakefield utilizes a standard caustic fusion diamond recovery method. Lab results can take two to three months due to lab wait times and processing.

The heli-borne geophysics survey completed 11,360 of the budgeted 13,630 line kilometres ("lkms"). The survey was performed by Fugro Airborne Survey Corp. The budgeted and estimated cost of the heli-borne program is $40 per lkm. The Company has received preliminary data and is waiting for the final maps and report from the heli-borne survey program. Interpretation is expected to start in late December.

The Company completed an additional 99 lkms over the budgeted 192 lkms for a total of 291lkms of ground geophysics. The ground geophysics program was budgeted at $900 per lkms and the estimated cost is $650 per lkms. The lower than expected cost per lkms was due to the close proximity between grids.

During the quarter only lab assays for SLT 4 had been received and subsequent to September 30, 2003, more exploration results from the drill and trenching program were released. Please see the new releases dated on October 7th #03-37, October 28th #03-38 and November 3rd #03-39 for diamond results and sieve size distribution data.

Hadley Bay Project, Victoria Island
The Hadley Bay Project (located immediately northeast of the Blue Ice Project) is 100% owned by the Company. The 2003 exploration program was designed to follow up on the 2002 exploration results on the King Eider kimberlite structure. Management of the Company prepared a 250 metre drill program to test two targets, Jaeger and Meister and a 900 lkms heli-borne geophysical survey over the Turnstone-Jaeger targets and the Apollo trend.

The drill program completed 204 of the budgeted 250 drill metres. The estimated cost per metre drilled is $100 more than the budgeted $700 per metre. Cost overruns were do to higher than expected drill labour and two bad weather days. The drill program intersected kimberlite on both drill targets and samples have been sent to SGS Lakefield Research.

The heli-borne geophysical survey completed 963 lkms and was performed by Fugro Airborne Survey Corp. The estimated cost of the heli-borne program is $41 per lkm. The preliminary interpretation portion of the heli-borne geophysics data has been included under ground geophysics. The Company has received preliminary data and is waiting for the final maps and report from the heli-borne survey program.

Geological prospecting along a geophysical anomaly generated by a 2002 airborne survey resulted in the discovery of kimberlite in several trenches confirming the presence of kimberlite. This discovery potentially increases the King Eider kimberlite structure by 10 km and provides the Company with higher confidence to drill test several possible kimberlite pipe / blow like anomalies along the trend.

Holman Project, Victoria Island
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 terms of the option and in consideration, the Company received 100,000 common shares of Serengeti a value equal to the geophysical survey cost for the Mon 76 claim.

Subsequent to September 30, 2003, the Company negotiated a settlement to settle the balance of the outstanding 2003 exploration costs and a deferral of $200,000 of the required 2003 expenditure requirements until February 28, 2004. In consideration, the Company will receive $10,000 in cash and 355,000 common shares of Serengeti a value equal to the settled balance of the outstanding exploration cost. This settlement is subject to regulatory approval.

Management of the Company proposed a heli-borne geophysical survey on 23 of 47 widely distributed geophysical targets. The objective was to identify magnetic anomalies highly suggestive of kimberlites which would warrant immediate follow-up with ground geophysical surveys to establish drill targets. A drill program was designed to test one of the two targets on the Mon 76 claim. The two strong magnetic anomalies on the Mon 76 claim were identified through airborne and ground geophysical surveys.

The drill program completed 155 metres of drilling and experienced $82,493 in cost overruns largely due to fog/bad weather and the distance from the camp to the drill site. Nine out of the nineteen drill shifts were hampered or canceled as the helicopter was unable to fly to the drill site. The drill program did not intersect any kimberlite and no further work has been proposed on Mon 76.

The heli-borne geophysical survey completed 654 lkms and was performed by Fugro Airborne Survey Corp. The estimated cost of the heli-borne program is $58 per lkm. The cost of heli-borne program was higher than the other two projects due to the smaller size of the surveys and the distance between surveys. Based on preliminary data from the heli-borne survey, the project's geophysical consultant has reported that no further work is recommended on six of the targets and no first order kimberlite targets were identified on the other seventeen targets.

Kidme Project, NWT
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 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.

General and Administrative Operations
For the nine months ended September 30, 2003, the Company incurred a loss of $840,967 or a $0.05 loss per share. General and administrative expenses for the period were $619,070. Other income included interest income earned on deposits of $45,943 and mineral property transactions earned on operating exploration projects of $17,107. Other expenses included property investigation of $44,707 incurred for the evaluation of un-staked land, $74,443 in stock-based compensation expense relating to stock options granted to non-employees and $19,750 in write downs on the carrying value of marketable securities. During the period, management of the Company determined that grass roots properties in Alberta and Quebec did not warrant further exploration and accordingly $146,047 in deferred exploration cost were written off.

For the three months ended September 30, 2003, the Company's general and administrative expenses were $162,672 compared to $250,001 from the previous quarter. The decrease is largely due to declines in consulting fees, legal fees, and wages and benefits. Consulting fees were $Nil compared to the previous quarters expense of $14,597 which reflected the Company's efforts to expand financial markets ($8,996) and improve it's financial systems ($1,500). Legal fees were $1,567 compared to the previous quarter expense of $22,505 which reflected the involvement of the Company's lawyer in the participation agreement with Teck Cominco Ltd. for the Blue Ice project ($17,733). Wages and benefits expense has increased over last year expense as the Company has employed the services of a full-time project exploration manager, a geologist and a part-time controller. However, wages and benefits expense for the current quarter of $48,195 represent a $22,851 decrease from the previous quarter's expense of $71,046 as a portion of the cost for the full-time project exploration manager and geologist has been capitalized to exploration projects.

For the nine months ended September 30, 2003, mineral property expenditures include acquisition costs of $356,144 and exploration costs of $4,475,539. 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 $2,461,652 in drilling, $594,253 in airborne and $476,159 geophysics. Mineral properties recoveries for the period from project partners were of $2,292,889. Option payments received totaled $64,000 paid through the receipt of 325,000 common shares at prices ranging $0.13 to $0.28 per share.

As at September 30, 2003, the Company had working capital of $4,612,632 which is sufficient to achieve the Company's planned business objectives for fiscal 2003 and the proposed spring 2004 exploration program.

Janice Davies
Corporate Secretary

For further information, please contact:
Corporate Communications: Nancy Curry
Diamonds North Resources Ltd.

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