THE DIAMOND PAGE — DHK group raises $7.2 million to explore

As an example of how the diamond frenzy is beginning to rub off on exploration for other minerals, DHK Resources will raise $7.2 million, through private placements, to spend on new projects.

Since Kennecott Canada is funding exploration on the group’s key diamond claims at Lac de Gras, the financing will allow the three juniors which constitute the DHK group to investigate gold and base metal opportunities. Dentonia Resources (VSE) and Kettle River Resources (VSE), for example, plan to spend at least part of their $5.2 million in combined proceeds to resume exploration on their Rainbow/Tam O’Shanter gold project near Greenwood, B.C. Meanwhile, Horseshoe Gold Mining (ASE) will test its wholly owned diamond property northeast of Lac de Gras.

“We are also entertaining joint-venture proposals for diamond, gold and base metal properties,” says Dentonia director Ellen Clements.

The private placements are structured as follows:

— Dentonia: 250,000 units at $8 per unit. Each unit consists of one share and one warrant to buy an additional share at $9.25 per share for a term of one year.

— Horseshoe Gold: 250,000 units at $8 per unit. Each unit consists of one share and one warrant to buy an additional share at $9.25 for a term of one year.

— Kettle River: 125,000 units at $16 per unit. Each unit consists of one share and one warrant to buy an additional share at $18.50 for a term of one year.

Kettle River has also appointed First Marathon Securities as its agent to place an additional 75,000 units at $16 per unit. Each unit consists of one share and one warrant to buy an additional share at $16.

The transactions are expected to close at the end of June. Until then, there will be a freeze on news from the DHK-Kennecott properties, where delineation and reconnaissance drill programs are ongoing.

Elsewhere in the Northwest Territories:

— Bre-X Minerals (ASE) says Kennecott will launch a ground exploration program to follow up airborne anomalies on the junior’s Lac de Gras claims. — Leeward Capital (VSE) has signed a flow-through financing agreement with the Caratax Diamond Exploration Limited Partnership. Under the agreement, Caratax may buy up to 500,000 flow-through shares at $1.60 per share. Caratax will also have the option to provide an additional $800,000 by buying flow-through shares at the prevailing market price.

Proceeds will be used to explore the Dubawnt Lake area, including sampling on known diatreme pipes.

— Lytton Minerals (TSE) has launched a “major integrated exploration program” on its nine million acres of claims. The program will include a 15,000-line-km airborne survey and heavy mineral sampling. About 10,000 reconnaissance and detailed samples will be taken from pre-designated locations.

Bulk-sampling of the Ranch Lake pipe continues.

— Mill City Gold Mining (ASE) has acquired a 25% interest in 100,000 acres from Major General Resources (VSE) and in 200,000 acres from Winslow Gold (VSE) and Northwind Ventures (VSE). Both properties are in the Humpy Lake area.

— Detailed field work and selection of drill targets is under way on the Amad claims, report partners Teryl Resources (VSE) and Calco Resources (VSE). Alta. and Sask.

— Big I Developments (VSE) has entered a joint-venture agreement with Golden Kootenay Resources (ASE) on two properties in the Fort a la Corne-Carrot River area of central Saskatchewan. A ground geophysical program, to follow up a magnetic high on one of the properties (the BGN property), is to begin this month.

— Takla Star Resources (ASE) has signed an agreement with the Caratax fund for a private placement of up to $814,000 by issuing 280,000 flow-through shares at $1.48 per share and warrants to buy additional shares at $1.50. Proceeds will be used to explore for diamonds in Alberta.

Ontario and Quebec

The James Bay joint venture between Ashton Mining and KWG Resources (ME) has been extended to include properties in Quebec. KWG recently acquired more than 70 geophysical targets identified by airborne surveys in the province. In the James Bay lowlands of Ontario, more than 200 geophysical targets have been identified.

— Partners KWG and Regal Goldfields (CDN) have recovered seven macrodiamonds weighing 0.029-0.204 carats from a 123-tonne sample taken on the west side of its C-14 kimberlite pipe near Kirkland Lake, Ont.

The 0.2-carat stone is the largest known diamond ever recovered from a kimberlite pipe in eastern Canada.

“On examination of the small crystals, I am of the opinion that because of the shape, color and clarity of these samples, they represent a diamond-bearing kimberlite pipe that has an excellent prospect of producing commercially viable diamond rough,” says gemmologist Donald Goodger. Regal Chairman Douglas Bannerman says the joint venture will move the percussion drill to the east side of the pipe and take another large sample. The pipe has at least four and perhaps as many as 10 phases. Overseas

— Diamond Fields Resources (VSE) has acquired Angra Pequena Diamond (which owns a Namibian diamond producer) for 366,666 shares and US$3.3 million. Diamond Fields is also negotiating to take over Exdiam Corp., owner of a one-third interest in Arkansas Diamond Development.

— Under an agreement in principle, Vector Industries International (VSE) will acquire Toronto-listed Hillsborough Resources’ option on the Rio de Sono property in Minas Gerais State, Brazil. Vector is a subsidiary of Hillsborough.

— Gold Standard (NASDAQ) has acquired 5,275 acres of mineral rights in the Coromandel alluvial diamond district of Brazil. The fifth-largest diamond in the world, “The President Vargas” was found about one mile downstream from the properties, which lie on the San Antonio River. Gold Standard plans to investigate both the kimberlite and alluvial deposits.