Diamonds North Unveils Uranium Portfolio
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News Release: 06-12
VANCOUVER, May 4, 2006 - Diamonds North Resources Ltd. (TSX-V: DDN) releases a detailed summary of its uranium properties in Nunavut and the Northwest Territories. A NI 43-101 report prepared by an independent qualified geoscientist has recently been received and is in final review before filing with Sedar. Based on the report, the company provides a brief description of each property.
Under a plan of arrangement (see news release NR06-08, dated March 16th, 2006), Diamonds North plans to transfer the uranium properties to its wholly owned subsidiary, Uranium North Resources Corp. Shareholders of Diamonds North on the effective date of completion of the plan of arrangement will receive 1 share of Uranium North for each 6 shares of Diamonds North held. The uranium assets have not been a focus for Diamonds North and have contributed minimal market value to the Company. By transferring the uranium assets into a new company, management believes shareholders can capture additional value without dilution to Diamonds North and without diverting Diamonds North's attention from key diamond projects such as Amaruk and Hepburn.
More than 3.7 million acres of uranium prospective lands have been described in the report. All of the properties are within or adjacent to Proterozoic sedimentary basins and have potential for unconformity and vein type uranium deposits.
With the rapid increase of the spot price for uranium, the demand for uranium prospective land has increased dramatically over the last year. Diamonds North's uranium assets were developed from the Company's diamond exploration activities on its existing properties that were acquired prior to the recent land rush for uranium.
Currently, the main properties in the uranium portfolio include the Thelon JV, South Baker-Thelon and Hepburn properties. Several historic uranium showings have been identified on these properties from the evaluation of assessment reports and through the Northern Mineral Database. Other properties with uranium potential within the uranium portfolio include the Amer, Tasiq and Kazan properties.
Exploration programs and budgets are currently being planned for each property and will include phase I and phase II programs. Phase I will be designed to confirm the locations of the reported prospects, verify the historic data and develop drill targets through prospecting, airborne surveying and ground geophysics over and around the known prospects. Phase II programs will focus on drill testing targets and trenching surface showings.
Highlights
The Company's uranium property portfolio offers investors numerous uranium opportunities within and around the Thelon and Hornby Bay Basins, which are among Canada's most prospective target regions for uranium.
Confirmation of these uranium prospects could potentially move the Hepburn and South Baker - Thelon properties to drill ready status well before the end of 2006. Unverified historic data published by the Geological Survey of Canada on the UO and GP prospects (described below) indicate the presence of significant uranium grades over minable widths extending for half a kilometre each. These prospects are important as they could lead to the development of resource estimates in the short term.
Some of the portfolio highlights are listed below:
Hepburn Property
- Numerous uranium showings near or at surface
- 2.73% and 1.67% U3O8 over 0.5 metres and 2 metres widths respectively reported to extend along strike for approximately 500 metres at the UO prospect
- 0.64% U3O8 over 10 metres extending for nearly 500 metres at the GP prospect
- 1.06% U3O8 from grab sample from 10m wide structurally controlled zone at the BP prospect
- Several other bedrock showings and boulder occurrences with elevated U3O8 on the property.
- Numerous showings with uranium mineralization at surface
- Greater than 4% and 5% U3O8 from boulders at Kam Showing
- 0.89% U3O8 over 2.5 metres and 0.4% U3O8 over 4.5 metres at L-1 Showing
- grab sample yielded 1.17% U3O8 in outcrop at Block 24
- Several boulder trains with 0.2 to 2.5% U3O8 at other locations on the property
- Largest land holdings in the Thelon Basin
- Thelon JV represents 1.2 million acres and a 20% carried interest to completed feasibility (see news release NR06-11, April 20th, 2006)
- Comprehensive EM survey planned for the property in 2006
- Numerous uranium enriched boulders identified
- Phase I budget planning is underway
Hepburn Property - 100% owned
The Hepburn property overlies segments of the Hornby Bay Basin. This basin offers unconformity type uranium deposit potential and is relatively under explored in relation to the Athabasca Basin. Other uranium deposit type potential for the property include IOCG deposits and vein type deposits. Uranium exploration activity in the Hornby Bay Basin has recently increased dramatically by several uranium explorers including Cameco Corporation. The prospect descriptions provided below cover three regions on the property and are based on historical reports that have not yet been verified by the Company.
Southern Hepburn - This area comprises two known prospects, the UO and GP prospects, which are located approximately 1 kilometre apart. These prospects provide the company with potential early drill ready opportunities. The potential concentration, widths and extent of the uranium mineralization at the UO and GP Prospects represent significant opportunity. Exploration plans will be finalized upon the completion of a successful site visit to confirm the historic data. The plans for this year will include prospecting, airborne surveying, ground geophysics and drilling over and between the prospects to determine the full extent of the uranium mineralization.
Central Hepburn - Several known prospects including the BP, HP Lake, Bonana Lake, St. Germain and Comur Prospects were discovered along a 30 kilometre north-south trending portion of Hornby Bay Basin sediments. In addition, the basement rocks in the area are overlain by rocks of the McTavish Group, which are also highly prospective for uranium. The Central Hepburn region represents over 1125 square kilometres with known prospects and remains under-explored.
Northern Hepburn -Diamonds North holds 50% interest on 5 of the BB block claims in the northern part of the Hepburn property. Six uranium occurrences with up to 0.82% U3O8 have been identified by Aramis Ventures. At BB Lake, lake sediments have returned uranium values ranging from 23.7 ppm to 115ppm U3O8. This is reported as the highest known uranium concentration in a lake sediment sample in region.
South Baker-Thelon Properties - 100% owned- UO Prospect - The Geological Survey of Canada reports that the Ridley Mines Holding Company found 2.73% U3O8 over 0.5 metres and 1.67% U3O8 over approximately 2 metres width within a dacite porphyry fault breccia at the UO Prospect. The total width of the zone is estimated at 3 to 5 metres extending for about 500 metres.
- GP Prospect - Moresby Mines reported assays of up to 0.64% U3O8 from a radioactive zone measuring 10 metres wide and extending for approximately 500 metres in a brecciated dacitic porphyry at the GP Prospect.
Central Hepburn - Several known prospects including the BP, HP Lake, Bonana Lake, St. Germain and Comur Prospects were discovered along a 30 kilometre north-south trending portion of Hornby Bay Basin sediments. In addition, the basement rocks in the area are overlain by rocks of the McTavish Group, which are also highly prospective for uranium. The Central Hepburn region represents over 1125 square kilometres with known prospects and remains under-explored.
- BP Prospect - During a prospecting program, BP Minerals Canada collected a grab sample of foliated granite from a 10 metres wide shear zone. The sample returned 1.06% U3O8. No record of a follow-up program has been identified.
- HP Lake Prospect - A grab sample from a sedimentary/volcanic rock contact returned values up to 1% U3O8.
- Bonana Lake - Bedrock samples recovered from trenches by Cominco returned assays of 0.1 to 1% U3O8.
- St. Germain and Comur Showings - Several uranium occurrences of about 0.025% U3O8 have been identified in outcrop and in drill core by Cominco. These anomalous uranium concentrations may represent potential for higher U3O8 concentrations and require further exploration.
Northern Hepburn -Diamonds North holds 50% interest on 5 of the BB block claims in the northern part of the Hepburn property. Six uranium occurrences with up to 0.82% U3O8 have been identified by Aramis Ventures. At BB Lake, lake sediments have returned uranium values ranging from 23.7 ppm to 115ppm U3O8. This is reported as the highest known uranium concentration in a lake sediment sample in region.
The South Baker-Thelon properties comprise approximately 1.2 million acres of permits. The region was explored in the 1970's by several companies and has remained unexplored over the last two decades while uranium prices were at much lower levels. A recent review of historic data over the region by Diamonds North has identified numerous areas with known uranium mineralization. The prospect descriptions provided below are based on historical reports and have not yet been verified by the Company.
Kam Prospect - Uranium enriched boulders were discovered by Urangesellschaft over several hundreds of metres. Eleven grab samples from the northern Kam area have returned U3O8 values ranging from 0.19% to greater than 5% U3O8 with an average of 2.04% U3O8. Assays from 18 grab samples collected along the southern part of the prospect have yielded values ranging from 0.03 to 4.03 % U3O8 with an average of 0.69% U3O8. Boulders from this area have been traced for 1600 metres. Limited drilling on the Southern Kam area has intersected 0.44% U3O8 over 1 metre.
L-1 Prospect - Uraniferous boulders yielding up to 2.3% U3O8 have been identified by AGIP over an area covering 550 x 60 metres. Bedrock samples have returned 0.89% U3O8 over 2.5 metres in trenches and 0.4% U3O8 over 4.5 metres in drill core.
Block 24 Prospect - Shell discovered uranium in outcrop up to 1.17% U3O8. The mineralization is reported to be structurally controlled within volcanic rocks.
Art Occurrence - AGIP discovered uranium enriched boulders that they believed to be locally derived. Boulders with up to 2.5% U3O8 have been traced for more than 500 metres. A bedrock source of the boulders has not yet been located.
Windy Inlet Occurrence - Uranium rich boulders with up to 1.37% U3O8 were discovered by Noranda Inc at Windy Inlet. The mineralization is associated with 5 to 25% pyrite and 3 to 10% magnetite. The bedrock source for these boulders has not been found, however, the abundance of magnetite will assist detection using geophysics.
Shell Boulder Occurrence - At this location Shell and Urangesellschaft discovered boulders with uranium values ranging from 0.24% to 0.42% U3O8. A bedrock source was not reported.
E & B Prospect - Radioactive supracrustal and basement boulders have been identified by E & B Exploration. Narrow uranium enriched fractures in outcrop were also found at the E & B site. The U3O8 values in the boulders range from 0.05% to 0.35%.
Developing ProjectsL-1 Prospect - Uraniferous boulders yielding up to 2.3% U3O8 have been identified by AGIP over an area covering 550 x 60 metres. Bedrock samples have returned 0.89% U3O8 over 2.5 metres in trenches and 0.4% U3O8 over 4.5 metres in drill core.
Block 24 Prospect - Shell discovered uranium in outcrop up to 1.17% U3O8. The mineralization is reported to be structurally controlled within volcanic rocks.
Art Occurrence - AGIP discovered uranium enriched boulders that they believed to be locally derived. Boulders with up to 2.5% U3O8 have been traced for more than 500 metres. A bedrock source of the boulders has not yet been located.
Windy Inlet Occurrence - Uranium rich boulders with up to 1.37% U3O8 were discovered by Noranda Inc at Windy Inlet. The mineralization is associated with 5 to 25% pyrite and 3 to 10% magnetite. The bedrock source for these boulders has not been found, however, the abundance of magnetite will assist detection using geophysics.
Shell Boulder Occurrence - At this location Shell and Urangesellschaft discovered boulders with uranium values ranging from 0.24% to 0.42% U3O8. A bedrock source was not reported.
E & B Prospect - Radioactive supracrustal and basement boulders have been identified by E & B Exploration. Narrow uranium enriched fractures in outcrop were also found at the E & B site. The U3O8 values in the boulders range from 0.05% to 0.35%.
The Amer, Tasiq and Kazan properties each have been identified as prospective for uranium. Anomalous U3O8 values from till samples collected by Diamonds North in areas with prospective geological formations have been targeted. No record of previous exploration for uranium on these properties has been identified, however till geochemistry and geology suggests good uranium potential on the projects.
The NI 43-101 report was completed by L. Lebel (P. Geo) an independent qualified person. Bruce Kienlen (P.Geol) and Graham Gill (P. Geo) are Diamonds North's qualified persons reviewing the data for these projects.
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.
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