Maude Lake proposes new diamond explorer

Having amassed a package of prospective diamond properties in northern Quebec over the last several months, Maude Lake Exploration (MAU-V) plans on creating a new diamond exploration subsidiary.

Under the plan, Maude Lake will transfer its diamond prospects to the new company in exchange for shares. Maude also plans on distributing a certain percentage of the new company’s shares to its shareholders.

The creation of the new company is subject to shareholder and regulatory approval. Shareholders will be asked to vote on the proposal at the company’s general annual and special shareholder meeting slated for June 20, 2002.

Maude Lake plans to seek a Canadian exchange listing for the new company, should the plan get the nod.

Maude Lake says the idea behind the move is to separate its gold assets, which are at an advanced exploration stage from the diamond assets, which are at a “grass root” stage. The company hopes the plan will allow the market to evaluate each asset at its true value.

Maude Lake entered the diamond scene in October of 2001 when it optioned the Fregate diamond prospect. The company can acquire the property by issuing 250,000 shares, paying $50,000 in cash and spending $750,000 on exploration before 2005.

Fregate comprises three claim groups about 350 km north of Matagami. The three groups are situated on the junction of the Wemindji-Caniaspiscau/Wemindji-Baie Sept-Iles and Wemindji- Baie Sept-Iles/Tmiscame Corvette structural corridors. The properties host several diabase dykes and possible circular anomalies.

Earlier this year, the company added, via staking, 70 claims hosting kimberlite prospects in Quebec’s Wemindji-Otish area. The targets lie in the corridor between Wemindji, where Majescor (MAJ-V) identified indicator minerals and the Otish mountains, where Ashton Mining of Canada (ACA-T) and Quebec government-owned Soquem made their discovery of two diamond-bearing kimberlitic bodies. Maude Lake has a program of mostly till sampling aimed at identifying diamond indicator minerals under way.

Just last week, the company inked an option deal to acquire a 65-sq.-km. package of prospective diamond properties in the Otish Mountains area. Under the deal, the company can acquire the properties for 250,000 shares plus $32,505 in cash. Maude must also spend at least $500,000 on exploration before 2005. The deal is subject to regulatory approval.

The properties are host to at least 40 new exploration targets identified by geophysical and geological surveying and satellite imagery. Part of the land package is subject to the approval of the Quebec Department of Natural Resources.

With the latest deal, Maude Lake’s landholdings in the area climbs to about 150 sq. km. The company intends to launch a program focussed mainly on till sampling on the properties over the next few months. The company is also looking at further acquisitions in the region.

Maude Lake’s key gold asset is the 185-claim Comtois gold property, west of Lebel-sur-Quevillon, Que., where late last year, the company earned a half-interest in 130 claims owned by Cameco (CCO-T). Maude got its half-interest after completing two holes at Colline de l’ouest, 1 km west of Comtois. The work brought the company’s expenditures on the Cameco option to $1.3 million.

Gold mineralization at Comtois has been delineated within a 1.2-km-long corridor of felsic volcanic rocks that remains open both to the east and west. Metallurgical tests on the Comtois material indicate gold can be recovered using conventional cyanidation methods, and recovery rates above 95% are anticipated.

Maude Lake also has an option deal to acquire a 95% interest in 15 claims adjoining Comtois to the north from Newmont Mining (NEM-N). To do so, it must spend $200,000 on exploration before February 2005. Government-owned Societe de developpement de la Baie James holds the remaining 5%.