Diamonds North Positions Uranium North in Athabasca, Thelon and Hornby Bay
These properties are to be transferred to its wholly owned subsidiary, Uranium North Resources Corp., increasing Diamonds North's uranium land holdings from 3.7 million acres to over 4 million acres. This distinguishes Uranium North as the only junior uranium explorer with significant and prospective land holdings in the Athabasca, Thelon and Hornby Bay Basins. The company believes these basins are the three most prospective areas in Canada for high grade, unconformity-vein type uranium deposits.
The Athabasca Basin in Saskatchewan is one of the world's most prolific environments for uranium mineralization. It currently hosts the two largest high grade uranium deposits in the world: McArthur River and Cigar Lake, plus numerous other economic deposits. The Thelon and Hornby Bay Basins are geologically similar to the Athabasca Basin and, in relation, are largely under-explored. Uranium North's strategy is to target the under-explored opportunities of the Thelon and Hornby Bay Basins as well as the high potential of the proven Athabasca Basin. Some of the highlights for the new properties are listed below:
Amer Lake - Thelon Region -- Potential Resource Identified
• Uranium North can earn 100% interest in the permits;
• Numerous targets over 125,000 acres in geological setting similar to the Kiggavik deposit;
• Main and Faucon showings -- A reference to a historic uranium resource has been identified on the property (noncompliant with NI 43-101 -- "indicated resource"* of 3.1 million tonnes grading at an average of 0.07% U3O8, and "inferred resource"* of 1.2 million tonnes at 0.07% U3O8) in an area with boulders yielding up to 5.4% and 8.8% U3O8;
• Horned Lake - U3O8 in boulders up to 5%, bedrock source(s) may not be fully explained;
• Split Lake -- Uranium bearing boulders and bedrock samples up to 1.5% U3O8;
• Uranerz Grid 1 - Radioactive boulders and bedrock samples up to 1.9% U3O8;
• Showing B - Approximately 50 boulders identified assays as high as 0.7% U3O8.
Carswell East - Athabasca Basin -- Near Cluff Lake Mine
• Uranium North will hold 100% interest in claims;
• 168,000 acres over east side of the uranium bearing Carwell structure;
• 20 kilometres from the previously producing Cluff Lake Mine;
• Geophysical interpretation indicates possible basement highs on the property;
• Major structural lineaments transecting the property, which could be favourable for uranium mineralization, were interpreted from regional geophysics.
Beatty River - Athabasca Basin -- Near Shea Creek Property
• Uranium North will hold 100% interest in claims;
• 37,000 acres over major northeast trending fault that could control mineralization in the area;
• Geophysical interpretation indicates basement highs on the property;
• 20 kilometres east of the Shea Creek Uranium Property held by Cogema Resources Inc. and UEX Corp (drill core returned 27% U3O8 over 8.8 metres).
Detailed summary of the properties
The Thelon Area - Amer Lake Property
The Amer Lake Property, in the Thelon region, comprises four prospecting permits near Amer Lake that have been optioned by the Company. Under the terms of the option agreement with MPH Consulting Limited, by assignment from Diamonds North, Uranium North will hold the right to earn a 100% interest in the Amer Lake permits by paying MPH a total of $350,000 in two payments of which $100,000 is in cash and $250,000 is in shares. To maintain the option in good standing, the cash payments are required to be made as follows: $50,000 on or before the date the shares of Uranium North commence trading on the TSX Venture Exchange ("the Listing Date") and the $50,000 balance within 6 months thereafter. The $250,000 in shares of Uranium North are required to be issued as follows: $125,000 worth of shares are to be issued prior to the Listing Date and shall be valued at the prospectus offering price. The balance of $125,000 in shares is to be issued within 6 months of the Listing Date and shall be valued at the market price of Uranium North's shares as of the date of issue. MPH will retain a 3% royalty on uranium, which can be bought down to 1% for $1 million per percentage point.
The primary exploration target on the property is a basement-hosted uranium deposit comparable to the Kiggavik/Sissons Schultz deposits (resource of ~150 million lbs U3O8, reported by Areva) located in a similar geologic setting approximately 90 kilometres southeast of the Amer Lake property.
This permit block encompasses numerous historic uranium occurrences in outcrop, drill core and boulders. One of the highlights is a boulder discovered by Uranerz Exploration and Mining which assayed 8.8% U3O8 in the vicinity of a uranium resource defined by Aquitaine Company of Canada. The Amer Lake rocks are interpreted to be geologic equivalents of the Wollaston Fold Belt that underlies portions of the Athabasca Basin.
Initial review by MPH of historic exploration on the property identified five priority targets for follow-up on the permit block (see website for a map of the property http://www.diamondsnorth.com/s/AmerLake.asp
• Main and Faucon Showings: Located in the central portion of the permit block, assessment reports indicate a historical resource and boulders with assays as high as 8.8% U3O8 in the area of the Faucon showing and 5.4% U3O8 in the area of the Main showing. Other highlights from the area (showing B) include U3O8 values from boulders up to 0.63% and 1.7% in bedrock.
The Faucon Showing was originally held by Aquitaine with Cominco Ltd. as an option partner. Both companies reportedly drilled several holes in the area intersecting several 1 to 2.5 metre intercepts with U3O8 ranging from 0.1 to 0.18%. Reference to an "ore reserve summary" for the Main Zone uranium occurrence in a 1978 assessment report by Cominco Ltd was identified during data compilation. The summary was prepared by Aquitaine in 1969-70 based on approximately 30 drill holes totalling 6280 metres of drilling. The drilling was referenced by Cominco as yielding "a moderately regular array of intersections." Some details of the "ore reserve summary" have been located and a comprehensive review will be undertaken to better understand the data. Previous drilling has been reported to outline estimated "indicated resource"* of 3.1 million tonnes averaging 0.07% U3O8, with zones up to 0.15% U3O8. This equates to approximately 4.8 million pounds of U3O8. Additional "inferred resource"* of 1.2 million tonnes grading 0.07% U3O8 were also reported, equating to approximately 1.9 million additional pounds of U3O8. The zone was reported as being open in both directions along strike and to the south down dip. (This resource estimate is not compliant with NI 43-101 and should not be relied upon as insufficient qualifying exploration has been carried out to delineate a NI 43-101 compliant mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource).
The priority for this showing is to confirm the historic uranium resource on the property as reported by Cominco and to locate the bedrock sources of the boulders that returned 8.8% and 5.4% U3O8 to a bedrock source.
• Horned Lake Boulder Field: Approximately 500 uranium bearing boulders extending for about 3 kilometres in a northwest-southeast direction was delineated by Uranerz in the late 1970's. Assays of 52 boulder samples from the area averaged 0.53% U3O8 with individual assays up to 5.1% U3O8. It is not clear that the bedrock source(s) of the boulders has been fully explained.
• Split Lake Showing: A separate and parallel boulder field associated with uranium showings in bedrock was identified one kilometre north of the Horned Lake Boulder Field. Bedrock grab samples from the area have returned assays up to 1.5% U3O8. It does not appear that a bedrock source for these boulders was ever identified.
• Garry Lake Boulder Field: Aquitaine and Uranerz discovered boulders grading to 0.5% U3O8 along the north shore of Garry Lake extending for about 1.5 kilometres. According to assessment reports, the source of these boulders has not been found.
• Uranerz Grid 1: Numerous uranium bearing boulders and bedrock uranium occurrences have been located at this site with grab samples of outcrop returning up to 1.9% U3O8. No record of any drilling was identified in the assessment reports.
Athabasca - Carswell East and the Beatty River Blocks
MPH assisted Diamonds North in identifying and acquiring two claim blocks in Saskatchewan in the Athabasca Basin; the Carswell East and the Beatty River blocks. The Carswell East block straddles the eastern portion of the uranium-bearing Carswell Structure, which contains the past-producing Cluff Lake Mine. The claim block, approximately 20 kilometres from the Cluff Lake Mine, is surrounded by claims held by Areva Resources Canada Ltd. (Cogema) and other uranium explorers.
The Beatty River block overlaps the Beatty River Fault Zone, a northeast-southwest trending zone which may have controlled uranium mineralization in the area. This block is approximately 20 kilometres east of the Collette deposit on the Shea Creek property where Areva Resources Canada Ltd. (Cogema) and UEX reported drill core assays up to 27.4% U3O8 over 8.8 metres and more recently 12.57% U3O8 over 11.9 metres and 27.35% U3O8 over 4.2 metres.
Preliminary interpretation of regional magnetic data over the two areas suggests the presence of basement highs, and other structural features which are known to be associated with uranium mineralization elsewhere in the Athabasca Basin. The Company is planning a detailed geophysical survey over these project areas to identify exploration targets.
The claims are currently owned 100% by Diamonds North and will be transferred to Uranium North. Under the terms of a Staking Agreement with MPH, Uranium North will pay MPH a total of $125,000 in shares for its role in identifying the project area and assisting in the staking of claims. The foregoing shares shall be valued at the prospectus offering price and are required to be issued prior to the Listing Date. MPH will retain a 2% uranium royalty. One percent of the MPH royalty may be purchased for $1 million.
Assignment Terms
Diamonds North, for arranging these transactions and transferring its 100% equity interest in the properties to Uranium North, will receive out of the Uranium North prospectus proceeds, reimbursement of the approximate $175,000 costs associated with staking, 2,000,000 shares of Uranium North, a 2% net smelter royalty on all metals excluding uranium and a 2% and 3% gross overriding royalty on uranium on the Amer Lake property and the Athabasca properties respectively. Diamonds North reserves the rights to the MPH royalty buy downs.
General Information
These properties were generated through an alliance with MPH and this alliance allowed Diamonds North to maintain its diamond focus while strategically expanding its uranium portfolio.
The information and data pertaining to these properties is from assessment reports filed by previous exploration companies or regional government datasets and is not compliant with National instrument 43-101. W.E. Brereton (P. Eng), a Qualified Person under NI 43-101, has reviewed and summarized the data. The historic resource summary was also reviewed by Graham Gill, P.Geo, a Qualified Person under NI 43-101. Since it is historic, the complete and accurate nature of the data cannot be verified. The uranium showings will be further investigated in the field during Uranium North's initial exploration program.
Diamonds North now hold over 4 million acres of uranium prospective land in the, Thelon, Hornby and Athabasca Basins which are considered the three most prospective areas in Canada for high grade uranium deposits. Under a plan of arrangement Diamonds North is currently in the process of transferring these assets to the wholly owned subsidiary Uranium North Resources Corp. Once this transaction is completed Diamonds North shareholders will receive 1 share of Uranium North for every 6 shares of Diamonds North held. Uranium North will operate independently of Diamonds North with its own management team, financial structure and exploration strategy.
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 & CEO
For further information, please contact:
Corporate Communications: Nancy Curry
Diamonds North Resources Ltd.
Telephone:
Facsimile:
Website: www.diamondsnorth.com
Email:
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
* In the historical reports the "indicated resources" and the "inferred resources" were reported as "indicated reserves and "inferred reserves" respectively.