DIAMOND PAGE — SouthernEra options Yamba Lake

Work program slated to begin after data compilation

A preliminary agreement with three junior companies sets the stage for SouthernEra Resources (SUF-T) to acquire a 51% interest in the Yamba Lake diamond project in Canada’s Northwest Territories.

Partners Tanqueray Resources (TGY-A) and Mill City Gold International (MIY-V) had previously optioned their project to Cypango Ventures (CAV-V). However, Cypango has now agreed to terminate its option in return for an 11% undivided interest, pending regulatory approvals. The current agreement also allows Cypango the right to acquire an additional 2.5% interest by paying Tanqueray and Mill City $2.5 million for each additional 1% undivided interest.

Once SouthernEra earns its 51% stake, Mill City and Tanqueray will own a 19% undivided interest in the Yamba Lake claims, which are situated adjacent to the northern boundary of the BHP Diamonds/Dia Met Minerals project.

To earn its interest, SouthernEra must spend $10 million on exploration by late 2002, which includes a $250,000 work commitment for this year. The company plans to review data from previous work on the claims and then begin a further sampling program.

Yamba Lake was previously optioned to a unit of De Beers Consolidated Mines, which carried out a mini-bulk-sampling program meant to confirm encouraging drilling results reported by Tanqueray and Mill City. Only 19 diamonds weighing an aggregate 0.635 carat were recovered from the 24.5-tonne sample testing the Torrie pipe, while no diamonds were recovered from the Ptarmigan pipe. The property was returned to the junior companies.