DIAMOND PAGE — Lytton to merge with New Indigo

Shareholders of Lytton Minerals (LTL-T) and New Indigo Resources (NDR-A) have agreed to amalgamate under the new name, Tahera (TAH-T).

Lytton shareholders will receive one share in the new company on a 1-for-1 basis, whereas shareholders in New Indigo will receive 2.4 shares of Tahera in exchange for each share held.

The Toronto Stock Exchange has conditionally approved the listing of Tahera shares in place of Lytton shares, effective March 1, subject to court approval and regulatory filings. Tahera will have 154.3 million shares outstanding, or 166.8 million fully diluted.

The new company will hold varying interests in 2.9 million acres in the Northwest Territories, including a 100% interest in the Jericho diamond project, 400 km northeast of Yellowknife. The project centres on the JD-01 and 03 pipes, plus the newly discovered Contwoyto-1 kimberlite, all of which lie within a 30-km radius of the Lupin gold mine.

A land-based pipe, the JD-01 kimberlite contain a resource of about 6 million tonnes grading 0.93 carat per tonne. A prefeasibility study by Steffen, Robertson & Kirsten determined a potential minable open-pit resource of 3.8 million tonnes grading 1.01 carats, with a projected stripping ratio of 4.2-to-1. The JD-01 diamonds are reported to be worth an average of US$60-70 per carat.

The JD-03 pipe lies under a small lake 7 km west of JD-01 and is estimated to contain a preliminary resource of 10.5 million tonnes to a depth of 300 metres. Three test samples weighing a total of 47.3 tonnes have yielded 16.9 carats of diamonds, for an overall grade of 0.36 carat per tonne.

The Contwoyto-1 kimberlite was discovered in the fall of 1998, about 30 km east of the Jericho pipes in the vicinity of an indicator mineral train where diamondiferous float was found. Caustic fusion analysis of 48.7 kg of float material yielded 123 diamonds above a 100-mesh cutoff. Seven of the stones were larger than 0.5 mm in two dimensions.

A 90.2-kg sample of drill core returned 169 stones. Twenty-six of the diamonds exceed 0.5 mm in one dimension, 12 are greater than 0.5 mm in two dimensions, and one measures more than 1 mm in two dimensions.

Preliminary estimates of the size of Contwoyto-1 suggest the pipe is in the range of 3-4 million tonnes.

In late February, operators will begin a 1,200-metre program of delineation drilling on Contwoyto-1, followed by the drill-testing of eight additional priority targets nearby. Also, ground geophysical surveys will attempt to define targets in the Jericho area, where about 10 high-priority targets will be drilled.

Roughly 800,000 ha of Tahera’s holdings, excluding the Jericho project, are subject to a joint-venture agreement with Kennecott Canada Exploration, a division of London-based Rio Tinto (RTP-N). Kennecott can earn a 51% interest in the properties by spending $50 million over eight years. After a 2-year period of geophysical and geochemical surveys, Kennecott is to launch a $4.1-million drill program on the Ice, Rockinghorse and Hood River properties. About 30-35 targets will be tested.