Diamonds North Merges Properties in Nunavut with BHP Billiton
Located in eastern Nunavut around the town of Kugaaruk, the project covers an area with dimensions of approximately 270 kilometres by 180 kilometres. The area comprises land owned 100% by Diamonds North including the 418,000 acre Amaruk project, more than 3.0 million acres held jointly by Diamonds North and BHP Billiton and approximately 3.5 million acres of land held by BHP Billiton.
Diamonds North and BHP Billiton will now each hold a 50% interest in the consolidated 7 million acre project. BHP Billiton has initiated an option to earn an additional 10% joint venture interest by sole funding the project to a completed feasibility study within seven years. BHP Billiton thereafter may earn an additional 5% by arranging Diamonds North's portion of financing to production.
As part of the agreement, BHP Billiton will reimburse Diamonds North both the $500,000 for land costs incurred to date and for costs associated with a geophysical survey currently underway (approximately $500,000). In addition, BHP Billiton will subscribe for $500,000 in Diamonds North shares at $1.40 per share. At Diamonds North's election BHP Billiton will for each of the next three years subscribe for shares up to $1,000,000 per year at a 20% premium to the market price.
This transaction has a major impact on Diamonds North as it greatly increases the Company's land position in the eastern Arctic. It also guarantees financing ability to production on this project, minimizes shareholder dilution and achieves the Company's goal of owning a 30-40% interest in a diamond mine, should an economic deposit be found. In addition to strengthening the Company's treasury (to over $4.4 million), this agreement frees up exploration funds and personnel to develop other projects and opportunities.
At this time, the eastern Arctic project area covers more than 10 separate kimberlite indicator mineral occurrences throughout the project area indicating the high prospectivity of the property. The expected budget for the 2004 exploration program on the property is estimated at $4 million and will include detailed sampling, airborne geophysics and possible drilling.
Diamonds North is a dynamic successful exploration team focused on strategically advancing diamond opportunities and is determined to discover Canada's next diamond mine.
On behalf of Diamonds North Resources Ltd.
Mark Kolebaba, President
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FOR FURTHER INFORMATION PLEASE CONTACT:
Diamonds North Resources Ltd.
Nancy Curry
Corporate Communications
(FAX)
Email:
Website: diamondsnorthresources.com
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