Drill set for Groundhog

Vancouver – Partners Canabrava Diamond (CNB-V) and Paramount Ventures & Finance (PVF-V) are gearing up to drill test their promising diamond projects in north-central Ontario.

The drill rig, slated to start turning next week, will start testing geophysical anomalies on the Groundhog property before moving over to the Rocky Lake project and the Pivot Lake claims sometime in the first quarter of next year.

At their equally owned Groundhog property, the partners have followed-up on a number of discrete kimberlite indicator mineral anomalies located within a 600-sq-km area. A total of 250 till samples were collected and about half have been analyzed. The balance are expected by year-end. Based on microscope identification, significant kimberlite indicator mineral grains have been recovered. The partners have also identified 20 priority airborne geophysical anomalies that are currently undergoing ground geophysics.

The Groundhog property lies between the new and old areas of interest of the Kennecott joint venture agreement, where the three companies have been pursuing the discovery of additional diamond-bearing kimberlitic boulder trains, following-up numerous geophysical anomalies, and collecting 118 till samples. Based on the results received to date, the parties inked an option agreement with MacGillivary Holdings over a discrete geophysical target identified from the Canabrava airborne survey. Canabrava can earn a 100% interest in the property by making cash payments of $100,000 and issuing 100,000 shares over a three-year period. MacGillivray retains a 2.5% gross overriding royalty on production. Ground geophysical surveys will be conducted over this and other high priority targets identified from the survey during December and January, followed by drilling in February 2002.

Canabrava holds a 75% interest in the Ontario JV and Paramount owns the remaining 25%. Kennecott, a division of Rio Tinto (RTP-N) has the right to earn a 60% interest in the project by spending $25 million before June 2006 or by making a production decision.