DIAMOND NEWS ROUNDUP — Diamond discovery throws spotlight on

Partners KWG Resources (TSE) and Spider Resources (ASE) have released results from a vertical hole drilled to test the Kyle Lake intrusive, discovered just over a year ago in the James Bay Lowlands of Ontario.

As previously reported, the discovery hole yielded 31 macrodiamonds and 88 micros in a 151.4-kg sample. The most recent hole, 95-26, entered a hypabyssal phase of “complex kimberlite diatreme” at 130 metres vertical depth, which contains numerous xenoliths of the surrounding gneisses (which have been variably digested by the “kimberlite”). The hole encountered five key sections of the intrusive and returned results from each of these sections listed in the table below.

Of the 370 diamonds recovered to date, 79 are macro in size; 21 of these have a dimension exceeding 0.8 mm, including two which exceed 2 mm. Ashton Mining of Canada (TSE), which has rights to a 51% interest in this and other prospects held by the KWG-Spider joint venture, has extracted 2.7 tonnes of material from Kyle Lake. This material is being analyzed.

Neil Novak, exploration manager of the James Bay Lowlands joint venture, says more studies are required in order to determine a final classification of the Kyle Lake occurrence. The intrusive has atypical geochemistry and unique mineralogy, and Novak says it appears to be much older than other kimberlites previously identified in the Lowlands.

“We expect it is in the Proterozoic-age category,” Novak explains. “Some view it as a complex kimberlite with a multitude of intrusions, some of which are diamondiferous and some of which are not.”

Kyle Lake appears to have attracted academic interest, and there is speculation that it may be an ultramafic lamrophyre, or an alnoite. In the meantime, however, the joint venture has discovered another body believed to be similar to Kyle Lake, only closer to surface. This target is being drill-tested.

Geophysical methods are used to find these targets, as Kyle Lake has no indicator minerals. The intrusive is highly metamorphosed, and it is speculated that indicator minerals were altered and only diamonds survived this process.

Northwest Territories

* Renewed interest in diamond issues continues to build, following the release of macro and micro counts from the AK property in the Northwest Territories.

The property is held 50% by Mountain Province Mining (VSE), 40% by Glenmore Highlands (ASE) and 10% by Camphor Ventures (VSE).

Diamond counts from 63.35 kg of core, taken from the discovery hole on the 5034 kimberlite pipe, totalled 176 macrodiamonds and 810 micros, or more than 155 diamonds per 10 kg. The core sent for analysis was selected from varying intervals along the hole, and a full analysis of the core has not been completed.

The results compare well with micro and macro counts released on other high-profile projects in the Territories. For example, the discovery hole on the 154 pipe, which is being evaluated by Aber Resources and Kennecott near Lac de Gras, returned 1,296 diamonds from 750.8 kg of core.

The discovery hole on the Point Lake pipe at the Diamonds project of BHP and Dia Met Minerals (not part of current development plans) returned 16 macros and 65 micros from 59 kg of core. In 1992, drilling on other pipes on the Diamonds project returned counts of up to 55 macros and 132 micros from 122.4 kg of core.

Some members of the investment community have expressed concern that the AK sample may represent only the higher-grade portions of the core. Dorothy Atkinson, mining analyst at Pacific International, admits the sample is small, but she believes it is nevertheless representative of the hole. Furthermore, she adds, it is unlikely one would be able to identify high-grade portions of core simply by eyeballing.

A drill program on the AK property, which is about 150 km south of Lac de Gras, is attempting to define the 5034 pipe further. Drilling will also test several nearby targets prior to spring breakup.

* The International Diamond Syndicate (IDS) is holding discussions with several companies (including one major) regarding its claims, a large portion of which adjoins the AK property.

Six to eight drill targets were identified last year, based on geophysics and till sampling.

The IDS group includes 40% owner Calco Resources (VSE), 40% owner Teryl Resources (VSE) and 20% owner Agate Bay Resources (VSE). The group holds a 16% interest in the so-called IDS claims, with the balance held by Major General Resources (VSE) and SouthernEra Resources (TSE).

* Ateba Mines (CDN) anticipates further work on its ground to the east of the AK discovery. The West Hill-based junior optioned a 60% interest in the property from Noront Resources (VSE). Pure Gold Resources (TSE) can earn a 40% pro-rated interest, while Ashton Mining of Canada, the operator, can earn a 50% pro-rated interest by completing an 18-tonne bulk sample on any kimberlite discovered.

Diadem Resources (ME) also holds ground on the eastern boundary of the AK discovery under an identical agreement with Noront, Pure Gold and Ashton. Meanwhile, exploration plans are being worked out for the Clinton property, situated northeast of the AK discovery. Ashton optioned the property from Winslow Gold (VSE) and has collected some 300 samples in total from four properties.

* West of the AK is the Camsell Lake joint venture where 10 targets are expected to be drilled this spring. The joint venture is owned 40% by Aber Resources (TSE), 30% by Winspear Resources (VSE), 20% by Amarado Resources (VSE) and 10% by Consolidated Newgate Resources (VSE). Drilling on the CL-25 pipe last year returned 7 macrodiamonds and 156 micros from 238.8 kg of core in hole 1. A second hole returned 2 macros and 56 micros from 111.6 kg. * Kalahari Resources (VSE) holds ground to the north of the AK discovery, in a joint venture with Kennecott and SouthernEra Resources. The partners spent about $1 million on the MacKay Lake-Back Lake property last year and drill-tested eight priority targets out of a total of 150 targets identified by geophysics and sampling. Upon completion of last year’s program, the joint venture said it expected to drill-test four to eight targets this spring. * Under a loan agreement, Kennecott will lend the DHK group all the funds required for ongoing diamond exploration on its joint venture in the Territories. The group includes Dentonia Resources (VSE), Kettle River Resources (VSE) and Horseshoe Gold Mining (ASE).

DHK is under no obligation to repay the funds until the start of commercial diamond production. Kennecott has, to date, advanced $6 million to the group for its portion of costs, and the company is preparing a budget for this year’s program.

Kennecott will conduct further drilling on the WO and DHK claim groups this year, pending the receipt of results from previous till sampling. * Interest in the Drybones Bay area near Yellowknife, N.W.T., remains heated, with investors awaiting further results from analysis of core from the Drybones pipe.

Tradewinds Resources (VSE) is earning an 80% interest from a private group. Core from three holes is now at Lakefield Research and full results are pending. Lakefield previously reported that partial results confirm the presence of micro and macrodiamonds.

From-to Length Weight Diamonds Macros Micros

(metres) (Kg)

146-164 17.6 7.96 20 4 16

290-302 12.0 20.11 24 6 18

314-320 6.0 10.66 38 9 29

356-362 6.0 9.95 85 10 75

417-429 12.0 21.96 63 23 40