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Gold/Mining/Energy : A CANADIAN DIAMOND HUNT -- Ignore unavailable to you. Want to Upgrade?

To: Famularo who wrote (149)	1/20/1998 5:04:00 PM
From: John Fairchild	Read Replies (2) \| Respond to of 930

More join the hunt in Alberta BIRCH MOUNTAIN AND LYTTON MINERALS-NEW INDIGO RESOURCES TO EXPLORE FOR ALBERTA DIAMONDS CALGARY, Jan. 20 /CNW/ - Birch Mountain Resources Ltd. (ASE:BMD) announced today that the company has entered into a letter agreement with Lytton Minerals Limited (TSE:LTL) and New Indigo Resources Inc. (ASE:NDR) to explore jointly for diamonds on Birch Mountain's 775,000 hectare (1.9 million acre) property in northeast Alberta. Under terms of the letter agreement, Lytton may earn up to a 60% interest in the diamond rights on the properties by making a payment of $390,000 to Birch Mountain to acquire certain exploration data from Birch Mountain, and by spending $4.5 million dollars on exploration within 4 years. At this point, Lytton will have the option to carry the project forward through completion of a bankable feasibility study to earn an additional 15% in the diamond rights. Birch Mountain will retain either 40% or 25% in the diamond rights on the properties. Birch Mountain's properties include the Caribou Mountains, Birch Mountains and Athabasca permits illustrated in the accompanying map. In 1997, a 23,000 line kilometer high resolution airborne magnetic survey was conducted over the northern portion of the Athabasca permits. Independent analyses of these data resulted in the identification of a number of distinct anomalies which exhibit size, depth and magnetic characteristics similar to other Alberta kimberlites recently discovered by Ashton Mining and others. Michael Dufresne of APEX Geoscience Ltd. concluded that ''the potential for the discovery of kimberlites is moderate to high within the block surveyed due to the nature of the magnetic anomalies, the position of the block relative to the Peace River Arch and the earlier discovery by the Alberta Geological Survey of diamond stability field indicator minerals within or in a down-ice direction of the block''. Drilling of these targets is expected to commence during the first quarter of this year. ''This is an exciting time for Birch Mountain,'' stated Doug Rowe, President and CEO, ''not only have we identified potential kimberlite targets on our ground in Athabasca, our partnership with Lytton and New Indigo provides the technical expertise and financial resources to test these targets this spring. This allows us to add shareholder value by developing the combined precious metal and diamond potential of our Alberta properties.'' The Alberta Stock Exchange has neither approved nor disapproved the information contained herein. NOTE TO EDITORS: A map accompanies this release. For a copy of this map please contact Canada NewsWire at (403) 269-7605. %SEDAR: 00003909E -30-