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October 08 www. bus- ex. com 101 " So we explored over 300 million acres in the north, and out of that we acquired 27 million acres. That made us the second- largest landholder in Canada, the fi rst being De Beers." Kolebaba is a great believer in experimenting and developing new technology. " Once we had acquired the ground, we took a very rapid and systematic approach to exploring. The team we created has the ability to be comfortable with trying new techniques. Sometimes we've been wrong, but we've been very successful in coming up with new techniques that make exploration cheaper and faster." Where most of its competitors use traditional geophysical techniques to collect data and analyze the rock composition on their land, Diamonds North identifi ed new airborne systems that could provide better data at higher sensitivity. " Where a commercial surveyor may give you 10 readings per second, the system we're using gives you 500 readings per second. We fl y that equipment and use it religiously, and it's given us a huge ability to fi nd more targets." Having identifi ed the most promising areas of land, the next step in exploration is to test drill and look for kimberlite, the rock in which diamonds are found. The company has looked far and wide for technology to speed this up. " In diamond exploration you learn very early on never to use percussion, because percussion hammering will break diamonds, and it's very destructive. In gold mining, however, hammering is not a problem because gold is malleable. We had a project up in the north that had 500 targets. To do all this— using a conventional core drill at $ 150,000 a drill hole and taking three to four days per drill hole— would probably have taken us six to seven years to complete at a cost of about $ 10 million." The answer Diamonds North identifi ed went against all the conventional wisdom of the industry, but it worked extremely well. " We found a percussion drill that was never used in diamond exploration. Although it could potentially destroy diamonds, we needed that speed to fi nd kimberlite. Now, once we've found kimberlite we can drill with a conventional core rig." This process is about six times faster and fi ve times cheaper than the traditional drilling method, and it has enabled the company to drill 60 targets in a year rather than fi ve or ten. Exploration so far has narrowed down the original 27 million acres of land to less than 8 million, and Diamonds North is now involved in three key projects, Amaruk, Hepburn and Banks Island. " The most advanced is Amaruk, where we've discovered 25 kimberlites, and that number may change shortly. We have also taken bulk samples from two areas that have demonstrated quite high diamond content— a 20- tonne and a 15- tonne from Tuktu and Qavvik— to see if they have commercial-sized stones," Kolebaba says. What they are looking for are large gemstones rather than small industrial stones, and he points out that there can be no more than two or three projects worldwide that have reached this stage of development. During the course of the exploration the company has also identifi ed 3– 4 million acres of land with uranium potential and a nickel prospect at its Amaruk site. Diamonds North is determined to capture value from all resource potential associated with its large land package. However, it intends to remain focused on diamond exploration and to do what it does best. " The team that we have is also taking the long- term approach," Kolebaba says. " Where people are jumping from one company to the next looking for the highest pay, we have the same employees that we had on day one, and that's rare in this business. We want to make a discovery in diamonds; that's what it's all about." Times must be pretty tense in Vancouver as team members wind down their fi eld operations for the winter and await results from the lab to indicate whether they have achieved their aim or will be continuing the search in six months' time for Canada's next big diamond mine. The Saskatchewan Research Council's Geoanalytical Laboratories have been providing high quality analysis to the exploration and mining industry for more than 35 years. We offer a diverse range of analytical mineral exploration packages for diamonds, kimberlite, uranium, potash and rare earth elements. As an ISO 17025 accredited lab, we offer secure, timely, confi dential and cost-effective services. Our most recent diamond processing expansion includes new services such as dense media separation, twin stage x- ray recovery, grease table recovery, and hands- off/ glove box fi nal sorting. Serving customers from across Canada and around the world, we can assist you at every stage of your exploration program. Saskatchewan Research Council Northspan Explorations Ltd is an exploration drilling company specializing in portable exploration drill systems. Northspan offers both heli- portable and land based RC drills with coring attachments available for both. Our drilling systems can be found working around the globe including Kimberlite exploration in the remote Arctic and gold exploration deep in the Amazon basin of South America. Northspan Explorations Diamonds North

102 www. bus- ex. com October 08 Newfound