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DIAMOND EXPLORATION NEWS Diamonds North, BHP Billiton Join Forces

NUNAVUT DIAMOND NORTH RESOURCES and BHP BILLITON DIAMONDS have joined forces to hunt for diamonds on an area cove...


NUNAVUT DIAMOND NORTH RESOURCES and BHP BILLITON DIAMONDS have joined forces to hunt for diamonds on an area covering 7 million acres around the town of Kugaaruk. This joint venture includes land owned 100% by Diamonds North including the 418,000-acre Amaruk project, over 3 million acres held jointly by the two companies, and about 3.5 million acres of land held by BHP Billiton.

Both partners now hold a 50% interest in the project. BHP Billiton will earn an additional 10% interest by funding a completed feasibility study within seven years. Then BHP Billiton may earn an additional 5% by arranging Diamonds North’s portion of financing to production.

As part of the agreement, BHP Billiton will reimburse Diamonds North both the $500,000 for land costs incurred to date and the costs associated with a geophysical survey currently underway (approximately $500,000). In addition, BHP Billiton will subscribe for $500,000 in Diamonds North shares at $1.40 per share. At Diamonds North’s election, BHP Billiton will for each of the next three years subscribe for shares up to $1,000,000 per year at a 20% premium to the market price.

The eastern Arctic project area covers more than 10 separate kimberlite indicator mineral occurrences. A map of the project area is available at www.DiamondsNorthResources.com; click on Projects, then Amaruk Project. This year’s project budget is set at $4 million to cover detailed sampling, airborne geophysics, and possible drilling.


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