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Symbol NDL
Last 0.010
$ Chg even
Date 11-19-2008
Time 14:04
TSX Venture Exchange
15 minute delay

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Kuopio-Kaavi Project

During the 2002 fiscal year, the Company acquired the Kuopio Kaavi Diamond Project in central Finland, wherein the claims contain 18 kimberlite bodies, the majority of which are known to be diamondiferous. Walter Melnyk, P.Eng conducted a re-assessment of the kimberlite bodies and the results proved to be encouraging.

The project area is located in central Finland, near the southwestern extremity of the Karelian craton that is host to the rich Archangelsk diamond field in northwestern Russia. The Company, through its wholly owned subsidiary, holds title to 15 claims, all of which cover diamondiferous kimberlitic bodies. These kimberlites were originally discovered by Ashton Mining in the early 1990s.

In August of 2006, the Company optioned the 17 claims to Sunrise Diamonds Plc ("Sunrise"), an AIM listed company. The agreement allows Sunrise to earn up to a 75% joint venture interest by sole financing exploration expenditures totaling £1,000,000 within four years. There is no fixed expenditure obligation during the initial 12 month period of the agreement other than to pay continuing government claims costs. Sunrise is required to spend a minimum of £150,000 by the end of year two and minimum total of £500,000 by the end of year three after which it will have earned a 51% joint-venture interest.

In November 2007, Sunrise Diamonds Plc. ("Sunrise Diamonds") completed drilling on three priority kimberlites in the Company's Joint Venture claim areas. The drill program, successfully sampled Kimberlites 10, 14 and 17 which were selected following encouraging mineral chemistry results, a reinterpretation of historic exploration results and based on the recommendations of Mineral Services Canada Inc, consultants to Sunrise.

Samples of approximately 200kg have been collected from each kimberlite body and have been sent to SGS Laboratories in South Africa for micro-diamond extraction by caustic dissolution. Dissolution concentrates from these samples will then be sent to Mineral Services Laboratories in South Africa for micro-diamond picking, diamond weighing and characterization and, where possible, grade modeling.

Drilling has also demonstrated a substantial increase in size of Kimberlite 14 as well as the potential for further increases. Although historic drilling did not define the limits of this kimberlite, it has been previously thought to be small as the associated ground magnetic anomaly covered an area of only 0.35ha. However, a step out drill hole completed by Sunrise as part of the recently completed program shows that Kimberlite 14 extends to the north beyond the limits of the associated ground magnetic anomaly. Here the kimberlite has a lower ground magnetic response, appears to be wider and remains open along strike to the north. It also remains open to the south and at depth from historic drilling and is now estimated to have a minimum surface area of 0.65ha. The shape of Kimberlite 14 is consistent with that of a thick dyke suggesting it might have a significant strike length and tonnage potential. If diamond sampling results from this kimberlite are favorable, further drilling will be carried out to fully delineate the body.

Mineral Services has reported the presence of macrodiamonds (stones where at least one dimension exceeds 0.5mm) from each of Pipes 10 and 17 as well as a significant number of larger sized stones and a relatively coarse stone size distribution in the sample from Pipe 17. The diamonds recovered from Pipe 17 have positive value characteristics, most being colourless and of moderate to good quality. Pipe 17 is considered to have further commercial potential and Mineral Services has recommended follow up and larger scale sampling of Pipe 17 to confirm the grade potential.

The primary aim of the 2007 drilling programme was to quantify the microdiamond content of the three kimberlites sampled, to assess the diamond value characteristics of the microdiamonds and, if possible, to undertake modelling of the grade of commercial-sized stones.

Samples of 202.76kg, 209.82kg, and 134.96kg from, respectively, Kimberlites 10, 14 and 17 were subject to caustic fusion at SGS Lakefield Research Africa in Johannesburg. The resulting residues were shipped to Mineral Services laboratory in Cape Town for recovery and description of microdiamonds.

A breakdown of the diamonds recovered from Pipes 10 and 17 (by sieve size) is as follows:

    Sieve size (mm)
Kimberlite
Number
Sample
Weight
(kg)
105 150 212 300 425 600 850 1.180 Total
#10 202.76 4 1 2 2 2 0 0 1 12
#17 134.96 14 4 1 1 3 0 2 0 25

Three macrodiamonds were recovered from Pipe 10 and five from Pipe 17. The size of the macrodiamonds recovered from each pipe is given by screen size in the following table:

Kimberlite
Number
Size
fraction
(μm)
Diamond
Number
Measurements
x (mm)
Measurements
y (mm)
Measurements
z (mm)
#10 425 1 0.99 0.47 0.62
#10 425 2 0.77 0.52 0.62
#10 1180 1 1.70 0.93 1.57
#17 425 1 0.67 0.52 0.55
#17 425 2 0.67 0.50 0.50
#17 425 3 0.75 0.50 0.57
#17 850 1 0.99 0.75 0.99
#17 850 2 1.02 0.75 0.87

Due to the paucity of a statistically reliable number of stones in the larger sieve classes, grade modelling was not possible on these samples. However, the results of an evaluation of the microdiamond populations, in particular the size distribution, and detailed evaluation of the quality of the microdiamonds allowed Mineral Services to draw a number of conclusions regarding the commercial potential of the pipes.

In addition to the positive conclusions reached on Pipe 17 discussed above, the diamonds recovered from the sample from Pipe 17 showed a number of positive features relating to their quality. Several of the larger stones are white (colourless) octahedrons and dodecahedrons with good form and moderate to good clarity.

Kimberlite Pipe 10, a 2 hectare pipe, returned the largest stone from the programme (a 1.7mm x 157mm x 0.93mm fairly good quality white macle). However, this stone is considered by Mineral Services as an outlier and based on very low stone recoveries the grade potential of this body is considered to be low. In addition stone quality overall is poorer than for Pipe 17 and no further work was recommended by Mineral Services on Pipe 10.

The results from Kimberlite 14, believed to be a dyke, are not being reported here as further quality control is needed to categorise the recovered diamonds. However, initial results suggest an unfavourable stone size distribution and no further work is recommended by Mineral Services on Kimberlite 14. Sunrise Diamonds notes, however, that the character of kimberlite dykes is often variable along strike and for that reason considers further work is warranted to follow the kimberlite along strike where it is open.

In addition to continuing its programme aimed at the discovery of new kimberlites, Sunrise Diamonds will now evaluate the tonnage potential of the best of the Kaavi-Kuopio pipes, including Pipe 17, as the first stage in a scoping study to evaluate in more detail the concept for the construction of a central processing plant for development of kimberlites in the Kaavi-Kuopio cluster.

Target 295 sample plan
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