THE DIAMOND PAGE — DHK group in merger discussions,

Although it is only a matter of months before Kennecott Canada releases results from its bulk sampling program on the Tli Kwi Cho (DO-27) kimberlite, several of the major’s junior partners are continuing merger discussions. These talks were motivated by the fragmented ownership of the WO claim block where the most advanced pipes are located.

Mining analysts are generally supportive of the initiative to create a larger public company with a significant interest in the second most advanced diamond play in the Lac de Gras region of the Northwest Territories. The merger is also expected to provide improved shareholder liquidity by way of an increased market float as well as a more attractive investment vehicle for institutional investors.

Aber Resources (TSE) is preparing documentation for its share exchange take-over bid of Dentonia Resources (VSE). Aber has already completed its merger with Commonwealth Resources, thereby increasing to 15% its interest in the Tli Kwi Cho pipe and WO claims.

But Dentonia views the Aber offer (two shares for each Dentonia share) as inadequate, and plans instead to merge with Horseshoe Gold Mining (ASE). The combined Dentonia-Horseshoe would then have a 23.3% interest in the project, which would be increased to almost 35% if Kettle River Resources (VSE) accepts an invitation to join in the merger of Dentonia and Horseshoe, on an equivalent basis.

But Kettle River has not yet decided what course of action it will take, and has retained legal and financial advisers to assist in the matter. In the meantime, rumors are surfacing that yet another partner, SouthernEra Resources (TSE), is mulling ways to increase its interest through either take-over bids or merger plans.

“We are going ahead with our plans,” said Aber President Gren Thomas. “But it is getting close to the wire, and becoming more doubtful that there is enough time left for (all) the players to complete their merger plans before the bulk sample results are released.”

(At press-time SouthernEra announced it was planning to merge with Horseshoe and Dentonia,)

So far, over 4,000 tonnes of kimberlite material from DO-27 has been extracted and trucked to Yellowknife for processing. Ellen Clements of Kettle River says results will be released at one time for the entire bulk sample, including valuations of the diamonds, rather than on a piece-meal basis. * Another junior active in the Northwest Territories, Gerle Gold (VSE), drill-tested two targets on the Teck/Cominco/Gerle Doyle Lake option. No kimberlites were encountered. Gerle is continuing exploration in the N.W.T., and is planning more drilling.

Elsewhere in the Northwest Territories

* Calco Resources (VSE) announced results from the initial drilling on the Amad claims in the Lac de Gras region. The program testing three geophysical targets did not encounter kimberlites.

* Calco also reported on its Saskatchewan joint venture (Agate Bay/Sentinel/Montello), where ten holes were drilled in four different areas. None of these holes encountered kimberlite, but more ground geophysics in the Molanosa Arch, Montreal Lake and Candle Lake clams are being evaluated. Drilling will resume after this evaluation is completed.

* A 1,500 metre drill program is set to begin on Tyler Resources’ (TSE) GEM property near Alymer Lake. The 28,219 hectare property contains seven combined magnetic/resistivity anomalies thought to represent kimberlites. Each of the geophysical targets has a coincident indicator mineral anomaly. * Ateba Mines (CDN) has farmed out a minority interest in its 40,470 hectare Lac de Gras area property to Pure Gold Resources (TSE). Pure Gold has agreed to purchase 40% of Ateba’s 60% interest in consideration for 30,000 Pure Gold shares on signing and 30,000 shares before Feb. 12, 1996. Pure Gold also has the option to incur aggregate expenditures of $500,000 before Feb. 12, 1996. Pure Gold and Ateba have also entered into an agreement with Ashton Mining of Canada (TSE) whereby Ashton can earn a 50% interest in the project by reimbursing Ateba’s acquisition costs and completing a feasibility study. A program to evaluate five magnetic targets is scheduled to begin shortly. * Processing of till samples from Aaron Oil’s (ASE) Humpy Lake property has been completed. Based on geochemical and geophysical survey results, 12 targets have been outlined and prioritized for drilling later this month. The project is a joint venture between Aaron, Garden Lake Resources (VSE), RJK Explorations (CDN) and SouthernEra Resources.

Saskatchewan

* Ashton Mining of Canada (TSE) has taken an interest in diamond exploration activity taking place in the Candle Lake region of this province. The company entered into an agreement to earn a 51% interest in certain claims located near the kimberlite discoveries reported by two VSE-listed juniors, War Eagle Mining and Great Western Gold. Ashton’s junior partners will be VSE-listed Winslow Gold, Island-Arc Resources and Falcon Ventures.

Alaska

* A drill program by Verdstone Gold (VSE) will begin in mid-May on the Crazy-8 “potential lamproite anomaly” in Alaska’s Circle Mining district. The company said the target was identified during the 1993 exploration program, through sampling and infrared studies. The company’s interest in the region was triggered by reports of diamonds ranging from 0.1 to 0.6 carats recovered from placer gold mines near the Crazy-8 structure.

Overseas

* Partners United Reef (TSE) and Ateba Mines have granted Belore Mines (ASE) an option to earn a 40% interest in a 147 sq. km exploration permit in the Central African Republic. The property is about 200 km southeast of the Bamingui-Bangoran diamond property which is being actively explored and developed by United Reef.

Belore can earn its interest by making expenditures of $425,000 by June 30, 1995. United Reef will be project operator and has designed a preliminary program to confirm the geology and existence of diamond bearing gravels on the property. Belore has advanced $100,000 to United Reef to fund the initial program which is expected to be completed by June 30, 1994.

United Reef has also negotiated a $600,000 private placement, subject to regulatory approval with Canhorn Mining (TSE) at 70 cents per share. This placement will increase Canhorn’s holdings in United Reef to 1,653,344 shares from 796,201.

* Namibian Minerals (VSE) reports that it has concluded a geophysical and sediment sampling program on its Namibian and South African marine diamond concessions.

The 94 day survey of the 1,035 sq. km concession areas produced 6,569 line kilometres of geophysical data, and 199 vibrocore sea bed sediment samples. Detailed interpretation of the survey data is underway, and a bulk sampling program is being planned to establish diamond reserves and grades. On one of the Namibian concessions, a promising zone 15 km long, 2.5-5 km wide, and containing up to 5 metres of sediment has been outlined. This bedrock depression coincides with the trend of basins onland that have yielded rich aeolian diamond deposits.

* Reunion Mining, a 46% owned subsidiary of Caledonia Mining (TSE), has discovered three new kimberlites in the Katete region of Zimbabwe. This brings the company’s total kimberlite discoveries within the Zimbabwe license to eight.

Reunion currently holds or has applied for licenses covering more than two million hectares, which contain 18 kimberlites, including 10 that were discovered by previous operators.

The company has recently completed airborne magnetic surveys over four kimberlite indicator mineral anomalies, three of which are thought to represent kimberlite clusters. The airborne surveys have yielded over 80 targets which will undergo further evaluation.

The Zimbabwe projects are a joint venture between Reunion and Argosy Mining (VSE).

* Diamond Fields Resources (VSE) has closed its acquisition of a 100% interest in the Loxton Dal and Frank Smith diamond mines in South Africa. The company is carrying out a program to upgrade the mines, in order to increase production. Diamond Fields in also involved in a marine diamond project in southwestern Africa, and recently took on a diamond project in Sierra Leone, Africa.

Diamond Fields will acquire all the outstanding shares of a Sierra Leonean subsidiary of Sunshine Mining (NYSE), the holder of a mining lease of kimberlite diamond deposits in Sierra Leone. The US$8 million agreement will be payable in common shares of Diamond Fields.