Hello Rory
***OFF THE WIRE***
Summary Report of Third Quarter
Vancouver, November 29, 2002 – Diamonds North Resources Ltd. (DDN-TSX Venture) has released its B.C. Form
51-901F third quarter report containing financial statements in Canadian funds, prepared without audit, for the nine
months ended September 30, 2002. Pursuant to the requirements of National Instrument 54-102, this news release
provides a reasonable summary of the information contained in the quarterly report. Concurrently with this news
release the Company is filing the quarterly report with the regulatory authorities through SEDAR (www.sedar.com)
and has mailed it to shareholders whose names appear on the Company’s supplemental list
Blue Ice, Victoria Island, Nunavut
The 2002 Victoria Island exploration program was designed to discover and recover samples of kimberlite to assess
the diamond potential of each kimberlite. To increase the company’s rate of success, high priority geophysical
anomalies with high interest mineral chemistry were targeted for drilling. Also, four previously discovered
kimberlites were retested on the basis that the mineral chemistry indicated higher diamond potential than first
reported.
The Blue Ice Project is wholly owned and operated by Diamonds North. Six new kimberlite bodies were discovered
in the 2002 exploration program; Virgo, Vega, Sculptor, Pegasus, Zeta and Carina. Additional testing was also done
on the Sand Piper and Snow Bunting kimberlites. A total of 217 kg of kimberlite was sampled by splitting drill core
plus an additional 750 kg of kimberlite was collected from sub crop from three separate discrete kimberlites. All of
these kimberlite bodies occur along the 20 km long Galaxy Structure located on the Blue Ice property. To date the
Company has only tested the Nunavut portion of the Galaxy Structure.
Encouraging diamond results have been received for Sand Piper, Snow Bunting, Vega and Carina.
Laboratory results are pending for Zeta, Sculptor, Virgo and Pegasus.
Hadley Bay, Victoria Island, Nunavut
Diamonds North, project operator with partner Canabrava, discovered five new kimberlite bodies during the 2002
exploration drill program. A new cluster, named Apollo was discovered and includes the Apollo, Neptune, Diana
and Pluto kimberlites. The fifth kimberlite discovered, Juno, is located near the King Eider kimberlite. The King
Eider kimberlite pipe was drilled to evaluate its large geophysical signature and three new phases of kimberlite were
discovered. In addition to drilling, a 20 kg sample of sub crop exposure was taken from the Turnstone kimberlite.
A total of 1,000 kg of kimberlite from the Hadley Bay Project has been sent to SGS Lakefield for analysis.
Encouraging diamond results have been received for King Eider. Samples from Pluto, Apollo and Diana kimberlites
produced no diamonds. Results are pending for additional samples of the Apollo and Diana kimberlites and for
Turnstone, Juno and Neptune.
Yankee, Victoria Island, Nunavut
5 drill holes have been completed with no kimberlite intersections. Further work on the southern part of the
property is required.
Wellington, Victoria Island, Nunavut
Ground and airborne geophysical surveys were completed in 2002. Several geophysical anomalies have been
identified for follow-up work.
Washburn, Victoria Island, Nunavut
Six geophysical anomalies remain to be drilled and several kimberlite dykes require trenching and sampling 2003.
Holman, Victoria Island, Northwest Territories
A helicopter-borne geophysical survey for 25 exploration targets is planned for 2003.
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Misty Lake, Northwest Territories
Several kimberlite targets on the property require ground confirmation and potential drilling in March 2003. Gten, Northwest Territories Helicopter-borne magnetics and an EM survey have been completed. Targets will be identified for an anticipated drill program in 2003.
For the period ended September 30, 2002, the Company had a net loss of $409,975. General and administrative
expenses for the period were $348,698. Debt financing costs includes the issuance of 890,000 common shares
valued at $445,000 to Commander in consideration of a working capital loan. Legal fees of $35,029 were mainly
due to the structuring of the Company. Investor relations expenditures for the period were $105,403.
The Company has incurred acquisition costs on its mineral properties in the aggregate of $1,770,345, which includes
the issue of 4,951,032 common shares issued to Commander valued at $1,484,840. The remaining $285,505 of
acquisition costs was incurred in connection with the staking of additional claims primarily on Victoria Island,
which covers part of Nunavut and the Northwest Territories. The Company has incurred a total of $985,335, net of
recoveries and option payments of $1,861,724, in exploration expenditures during the period. The majority of
exploration expenditures consisted of drilling costs of $1,475,720 incurred on the Blue Ice, Hadley Bay and Yankee
properties and geophysical costs of $858,933 incurred primarily on the Blue Ice, Hadley Bay properties. As at
September 30, 2002, the Company had working capital of $594,429. The Company has sufficient working capital
on hand to meet its ongoing obligations as they come due.
On July 15, 2002, the common shares of the Company were listed for trading on the TSX Venture Exchange.
On May 31, 2002, the Company issued 1,000,000 special warrants for net proceeds of $462,500, net of issue costs,
pursuant to a private placement. The special warrants were convertible without additional consideration into
1,000,000 common shares and 500,000 share purchase warrants which are exercisable to acquire up to an additional
500,000 common shares at a price of $0.60 per share until July 15, 2003. The special warrants were automatically
converted on July 15, 2002.
On July 15, 2002, the Company completed, with Haywood Securities Inc. (the “Agent”) an initial public offering
(the “Public Offering”) of 3,000,000 units at $0.50 per unit for net proceeds of $1,291,082, net of Agent’s
commission and other share issue costs. Each unit consists of one common share and one-half of one nontransferable
share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share
exercisable at a price of $0.60 per share until July 15, 2003.
In connection with the Public Offering, the Agent sponsored the Company’s listing on the Exchange. The Agent
received, as additional consideration, 500,000 share purchase warrants (the “Agent’s Warrants”). The Agent’s
Warrants entitles the holder to acquire one common share exercisable at a price of $0.50 per share until July 15,
2003. In addition, the Agent received 100,000 common shares in the capital of the Company as a corporate finance
fee.
On September 19, 2002, the Company granted stock options to acquire 100,000 common shares at $0.50 per share,
exercisable up to September 18, 2007, to an employee of the Company.
On October 30, 2002, the Company completed a non-brokered private placement of 111,000 units at $0.55 per unit
for proceeds of $52,644, net of a finder’s fee of $1,650 and other share issue costs of $6,756. Each unit consists of
one flow-through common share and one-half of one non-transferable share purchase warrant. Each whole warrant
entitles the holder to acquire one additional flow-through common share exercisable at a price of $0.60 per share
until October 29, 2003.
On November 6, 2002, the Company entered into an agreement with Dundee Securities Corporation and Haywood
Securities Inc. (collectively the “Agents”), on a best effort basis, for a private placement of up to 3,575,000 units at
$0.70 per unit for estimated gross proceeds of $2,502,500.
If completed, each unit will consist of one flow-through common share and one-half of a non-transferable common
share purchase warrant. Each whole warrant will entitle the holder to purchase one non flow-through common share
at a price of $0.80 per share for a period of twelve months after the closing date of the private placement.
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The Agents will be paid a cash fee equal to 7.5% of the gross proceeds raised in the Offering. The Agents will also
receive broker warrants (the "Broker Warrants") entitling them to purchase that number of common shares which is
equal to 10% of the number of units sold. The Broker Warrants are exercisable at a price of $0.70 per share and will
expire twelve months after the closing date.
Mark Kolebaba,
President
For further information, please contact: Corporate Communications: Nancy Curry
Diamonds North Resources Ltd.
Telephone: (604) 689-2010
Facsimile: (604) 685-2814
Website: www.diamondsnorthresources.com
Email: info@diamondsnorthresources.com
From what I hear out of Ottawa a final ruling on the Kidme claims is anticipated early 2003. There are several good indicator mineral trains leading off those claims south of Kenady Lake's pipes and terminating on those claims. So 2003 is shaping up to be an interesting year for DDN.
Regards
Vaughn |
