NO HEADLINE (July 26, 1993)

Despite a flurry of exploration in the Northwest Territories, where an estimated 30 exploration camps and several drills are active, the speculative diamond market is in the doldrums.

The shares of many of the main players, including flagship Dia Met Minerals (TSE) (floundering at the $40 level after hitting $66 in mid-June) have taken a beating on Canadian markets since Dia Met released positive bulk-sample results on June 21.

But observers contend that the market plunge has more to do with a traditional summer slowdown, lack of news and an all-encompassing sell recommendation from “cranky gold bug” Paul Sarnoff than any change in the play itself. In an article entitled “Canadian Diamond Stocks Can Be Dangerous to Your Wealth”, Sarnoff’s Gold Stock Advisory newsletter says the play lacks the evidence to be considered credible and advises investors to bail out. In other diamond developments in the Northwest Territories:

* The Caratax Diamond Exploration Limited Partnership has agreed to buy a maximum of one million shares of Adex Mining (TSE) to help finance the junior’s exploration program.

* The three companies that make up the DHK group have each completed a $20-million private placement of shares and warrants with Kennecott Canada. The funds will be added to general working capital and used for investment and exploration opportunities.

The senior has subscribed for 250,000 units each of Dentonia Resources (VSE) and Horseshoe Gold Mining (ASE) at $8. Each unit consists of one share and one warrant to buy an additional share at $9.25. The Kettle River Resources (VSE) placement consists of 125,000 units at $16 per unit and an exercise price of $18.50.

Kennecott has agreed to vote its shares with management until it either obtains 20% in each company or makes a production decision on the DHK properties at Lac de Gras.

* Caratax has agreed to fund Barexor Minerals (ME) to the tune of $350,000 for exploration on its Aylmer Lake project.

Barexor is conducting a ground geophysical survey on its 34,000 acres of ground and says it shortly will announce a drilling program. The junior has optioned a 50% interest in almost half its ground to Consolidated Cove Resources (VSE) and Nevsun Resources (VSE). * Caledonia Mining (TSE) plans to spend $1 million exploring 525,000 acres of coastal and river claim blocks in the Coppermine, Tree River and Bathurst Inlet areas.

Six exploration teams equipped with two helicopters will take samples from the estuaries of 12 major rivers, 100 minor rivers and several ancient raised beaches.

The samples will be tested for the presence of alluvial micro- diamonds and macrodiamonds.

Caledonia says drilling and sampling have begun on its 23,000-acre Dunvegan claims in the Winter Lake area, west of Lac de Gras.

* A 6-man team has been mobilized to Brodeur Peninsula on Baffin Island, reports Lumina Investment (VSE). More than 40 potential kimberlite targets have been identified on the 803,000-acre property, where Lumina is earning a 75% interest. The targets will be followed up with geochemical sampling over the summer.

Further south, an airborne survey over Lumina’s Lac de Gras area properties is almost complete.

Directing Lumina’s exploration program is Ian Mason, former head of worldwide diamond exploration for Cominco.

* Jerez Investment (ASE) and Tyler Resources (TSE) have entered agreements jointly to fund diamond exploration and development in the Lac de Gras area. Under the deal, Tyler will acquire a 50% interest in Jerez’ Humpy Lake north property and Jerex will take a 33.3% interest in Tyler’s Carat property. To date, Tyler has spent $346,000 completing airborne and ground geophysical surveys and heavy mineral-sampling. Detailed surveys will be completed later this summer.

Tyler says exploration on the Humpy Lake North property, where no work has yet been done, will be fast-tracked this summer in an attempt to outline drill targets as soon as possible.

* Lytton Minerals has acquired the right to earn a 60% interest in about 25,000 acres held by Canuc Resources (CDN) in the Coronation Gulf area. Under the agreement, Lytton must spend $450,000 on the properties by July, 1997 ($40,000 by this October), and make payments of $50,000 by next July. * Optical Data Systems (ASE) has obtained the right to earn a 50% interest in 25,843 acres held by Anvil Resources (ASE) in the Mackenzie mining district. Proceeds of a 590,000-share private placement will be used to finance an initial work commitment of $200,000.

* The Slave diamond syndicate, consisting of Tenajon Resources (VSE), Norcal Resources (VSE), Gerle Gold (VSE) and Westley Technologies (VSE), has completed an airborne survey covering 1.23 million acres of the Slave province. The syndicate has identified 40 anomalies, staked 34,000 acres to cover the anomalies and increased its exploration budget to $600,000. Alberta and Saskatchewan

* Rich Minerals (ASE) plans to spend $3.2 million exploring its claims in the southeast corner of Alberta after signing a joint-venture agreement with a large Italian conglomerate, Societa Italiana Per Condotte D’Acqua SpA. The subsidiary of the Italian company has agreed to put up US$11.5 million for diamond exploration in exchange for a 50% interest in the project. It is also negotiating with Rich to form additional non-mining joint ventures. * A drilling program supervised by joint-venture partner Consolidated Pine Channel (VSE) is progressing, reports Golden Marlin Resources (ASE). A float sample found down-ice from the drilling area returned abundant indicator minerals, including G-9s and G-10s, as well as three small diamonds reported to be of gem quality.

Ontario and Quebec

* Eastern Stone Products (ASE) will launch an exploration program on its properties in the Le Tac Twp. area of Quebec in early August. The program will include geophysical surveys and geological mapping as well as drilling. * Strike Minerals (CDN) says a diamond drill hole on its AM-47 property 10 miles northeast of Kirkland Lake, Ont., has intersected 316 ft. of kimberlite. A 5,000-ft. program designed to test for indicator minerals and diamonds will begin shortly.

Meanwhile, at the Ile Bizard project west of Montreal, Que., Strike’s joint-venture partner, Yanks Peak Resources (VSE), has launched the first phase of a 3-phase program which will include shallow drilling and bulk-sampling on kimberlite targets.