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.