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[Ed Monton]

Diamonds North finds potential kimberlite district

2004-02-16 15:21 ET - News Release

Mr. Mark Kolebaba reports

DIAMONDS NORTH DISCOVERS NEW POTENTIAL DIAMOND DISTRICT IN NUNAVUT

Diamonds North Resources has a potential new kimberlite district discovery through its regional exploration programs. On receipt of very positive indicator mineral results, the company staked a large block of claims last fall covering over 418,000 acres near Kugaaruk, Nunavut, formerly known as Pelly Bay. The company owns these claims 100 per cent.

The company recently acquired an interest in an additional 3.3 million acres of land. The 3.3 million acres surrounds the 100 per cent Diamonds North claim block and was acquired jointly with BHP Billiton Diamonds Inc., through permitting and staking to cover several kimberlite indicator mineral anomalies. This large land position places Diamonds North in the centre of this developing diamond play where more than 13 million acres have been acquired. Other landholders in the area include De Beers Canada Exploration Inc., BHP Billiton Diamond Inc., Kennecott Canada Exploration Inc. and other diamond exploration companies. A map of the area is available on Diamonds North's Web site: http://www.diamondsnorthresources.com/s/Property_Portfolio.asp.

Diamonds North 100 per cent claims

Diamonds North's 100-per-cent-owned central 418,365-acre claim block consists of 162 contiguous claims, located 45 kilometres south of Kugaaruk and 320 kilometres west of Stornoway's Aviat kimberlite discovery. The property was staked by Diamonds North to secure several anomalous kimberlite indicator mineral occurrences discovered by regional sampling.

Multiple samples collected from the property contain abundant kimberlite indicator minerals. One sample in particular contains more than 1,350 kimberlite indicator mineral grains including peridotitic and eclogitic garnet, chromite, chrome diopside and ilmenite.

"These are tremendously high counts for regional samples. This indicates to us that we are close to a kimberlite source," stated Mark Kolebaba, president of Diamonds North.

Based on the sample distribution and indicator minerals recovered, the company anticipates the potential for two to four kimberlite clusters on the property.

Planning for an aggressive exploration program is under way. An airborne geophysical survey is planned to begin in March to identify possible drill targets over high priority areas of the claim block. A detailed sampling and prospecting program will be undertaken between July and August.

Diamonds North -- BHP Billiton Diamonds Inc. joint venture

Diamonds North Resources and BHP Billiton Diamonds have entered into an agreement on lands surrounding the 100-per-cent-owned Diamonds North claims. The agreement covers 34 exploration permits totalling 2,142,745 acres and approximately 464 recently staked claims, totalling 1,198,280 acres. Although the total number of granted claims is not yet known, the total estimated land position under the joint venture is approximately 3,341,000 acres.

Under the terms of the agreement, Diamonds North Resources and BHP Billiton Diamonds will each hold an initial 50-per-cent interest in the lands and each of the parties will contribute 50 per cent of the staking and exploration costs. BHP Billiton may elect to earn an additional 5-per-cent, 10-per-cent or 15-per-cent equity position in the property by sole financing the first 200-tonne, 1,000-tonne and 3,000-tonne bulk samples, respectively.

Mr. Kolebaba stated, "BHP Billiton is a great partner for this project; they are successful explorers and we feel they have a strong commitment to grow their Canadian diamond business."

The land within the joint venture area is highly prospective for diamonds. Several kimberlite indicator mineral anomalies have been discovered by regional till sampling programs conducted independently by Diamonds North and BHP Billiton. These indicator mineral occurrences will be followed up jointly during the 2004 field season with BHP Billiton as the project operator.

G. Gill, PGeo, and B. Kienlen, PGeol, BSc, are qualified persons as defined by National Instrument 43-101 for Diamonds North Resources.