DIAMOND UPDATE — Diamonds spur world-wide activity

Canadian companies continue to explore for diamonds both in Canada and abroad:

Northwest Territories: — Fortune Minerals (CDN) has acquired a 50% interest in 20,144 acres in the Lac La Martre area, near Aur’s McConnell project. The junior has also increased its landholdings in the Russell Lake area.

— Geomaque Explorations (CDN) has contracted Dighem to fly a detailed aeromagnetic survey over its Healey Lake properties, east of Lac de Gras. Kennecott Canada has dropped its option on Geomaque’s MacKay Lake properties. — Geonex (NASDAQ), a Florida-based geophysical company, has received contracts worth about $2 million for diamond exploration in the Territories. The company recently

established an office in Yellowknife where it can process data and produce maps.

— The Vancouver Stock Exchange has accepted a filing for a private placement of one million shares of Kalahari Resources (VSE) at $2 per share. Each share carries a warrant exercisable at $2.25, good for one year. Kalahari will use the proceeds to explore 3.4 million acres of claims in the Lac de Gras area. The company says 139 high-priority geophysical targets have been outlined on the Mackay and Back Lake projects.

— Tyler Resources (TSE) has entered into a 50-50 joint venture with Adex Mining (TSE) to drill a high-priority geophysical anomaly on the western boundary of Tyler’s Crystal property.

Alberta and Saskatchewan:

— Mill City Gold Mining (ASE) has acquired a 100% interest in 400,000 acres, for which Rhonda Mining (ASE) has applied, around the Prince Albert diamond play in Saskatchewan.

— Rhonda and its partners are planning to launch an accelerated geophysical and drilling program this year on 3.2 million acres near Prince Albert, Sask. The work will focus on magnetic anomalies in the Fort a la Corne region. — Rich Minerals (ASE) has acquired another 600,000 acres in southeastern Alberta, northwest of Medicine Hat. Mapping and sampling have begun on nearby ground.

Ontario and Quebec:

— Diamond exploration recently moved into the Beardmore-Geraldton gold camp in northern Ontario following an agreement among Founder Resources (VSE), a numbered Ontario company and Westcap Enterprises. Supervised by Harry Hodge, 1012458 Ontario must spend $150,000, including line-cutting, ground geophysics and drilling, on the Clist Lake property in the first year. A further $400,000 will be spent to earn a 50% interest in the diamond rights. Founder will earn a 20% interest.

— More than half of the 83 holes drilled for gold and copper on Exploration Orbite’s (ME) Le Tac mining claims, in northwestern Quebec, contain sections of kimberlite, the company reports. Microprobe analysis is under way on the diamond indicator minerals.

— Societe Miniere Ecudor (ME) has acquired an option to earn a 75% interest in the Lac Castignon property, 200 km northwest of Shefferville, Que. The company says more than a dozen kimberlite pipes, as well as 15 dykes and sills, outcrop on the property.

Overseas:

— Aabbax International Financial (VSE) has agreed to buy up to four diamond and gold-bearing placer concessions in Africa in exchange for five million voting shares and a warrant for a further one million shares. Aabbax must also raise US$2 million to complete property payments and develop the properties.

— Canadian Overseas Exploration (VSE) has agreed to sell, by way of private placement, 250,000 shares, at 27 cents per share, to director James Stephenson. He will also be granted warrants to buy an additional 250,000 shares. Proceeds will be used to fund the company’s offshore diamond activities, including a joint venture with Benguela Concessions in Namibia. — Shareholders of Redaurum Red Lake Mines (TSE) have approved the acquisition of Cornerstone Investments in exchange for 20.5 million shares. Cornerstone has a 50% interest in a producing diamond property and exploration leases in Zimbabwe.

— United Reef Petroleums (TSE) is ready to begin mechanized washing of samples at the Bamingui-Bangoran project in the Central African Republic. The first 16 pits completed during sampling have yielded 27 gem-quality diamonds.