DIAMOND PAGE — Ashton budgets for Alberta diamond hunt

The Buffalo Hills joint venture has approved a 1999 budget of $7.4 million for diamond exploration in north-central Alberta.

Ashton Mining of Canada (ACA-T) and Alberta Energy (AEC-T) will share all costs equally, while Pure Gold Minerals (PUG-T) has elected not to participate in the upcoming program, thereby diluting its interest in the various joint-venture land holdings.

On completion of the 1999 program, Ashton and Alberta Energy will each hold a 45% interest in the central 1.4-million-acre Buffalo Hills core group of claims, plus an additional 4.1 million acres of surrounding ground, including the Birch Mountain, Loon Lake, Rabbit Lake and Muddy River properties. Pure Gold will hold the remaining 10%.

Within the project area, Ashton and Alberta Energy will each own a 43% interest in the K-14 kimberlite complex, with Pure Gold holding the balance.

The broader, 22.7-million-acre Cayo package will be held 35% by Ashton, 35% by Alberta Energy and 30% by Pure Gold. Under certain circumstances, Pure Gold could elect to restore its original interest by paying a penalty for exploration costs incurred on its behalf in any one of the three project areas, provided notice is given to the joint-venture partners.

Ashton, which is the operator of the Buffalo Hills project, will resume follow-up ground and airborne geophysical surveys this month, followed by drilling of new targets in early February.

Prior to the Christmas holidays, Ashton discovered a third kimberlite while conducting drilling in the Buffalo Hills region. The new kimberlite, dubbed BM-3, was found on the Birch Mountain property under 117 metres of overburden, 13 km southeast of the K-11 kimberlite.

BM-3 brings to 26 the number of kimberlites thus far uncovered by Ashton in the Buffalo Hills area. Of these, 16 are confirmed as diamondiferous, while four — K-14, K-91, K-5 and K-6 — have undergone mini-bulk sampling, yielding disappointing grades. In the meantime, the processing of a 17-tonne mini-bulk drill sample from kimberlite K-11 is continuing at Ashton’s laboratory in North Vancouver.