Diamonds North Resources Ltd.

Diamonds North Resources Ltd.

March 09, 2010 07:00 ET

Diamonds North Signs Letter of Intent With MMG on Amaruk Nickel

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 9, 2010) - Diamonds North Resources Ltd. (TSX VENTURE:DDN) announces that it has signed a Letter of Intent with Minerals and Metals Group ("MMG") whereby MMG may earn 75% of the Nickel and other base metals on the Amaruk Property in Nunavut, Canada, by spending C$6,000,000 and completing a pre-feasibility study on any base metal deposit that might be identified on Amaruk.

The projected budget for 2010 is estimated between C$2 to $2.5 million. MMG and Diamonds North plan to mobilize crews into the Amaruk camp mid-March, 2010. Included in this year's exploration plan is:

  • A +40 kilometre Crone pulse EM survey over the Tunerq prospect
  • Up to 1500 metres of NQ core drilling
  • Regional prospecting to identify additional mafic and ultra-mafic bodies
  • Detailed mapping of other mafic and ultra-mafic bodies across the property

"Nickel exploration by Diamonds North has demonstrated Amaruk as a significant early stage nickel discovery with district potential. We are very excited to continue advancing this extensive project in partnership with MMG as they bring nickel expertise, financial strength and a strong commitment to developing mining projects in Nunavut," says Mark Kolebaba President and CEO of Diamonds North.

MMG is an Australian headquartered major producer of zinc, copper, lead, gold and silver through its operations in Australia and South-East Asia. MMG has an international portfolio of exploration and development opportunities, including the High Lake and Izok Lake deposits in Nunavut, Canada. MMG has shown interest in the Amaruk nickel project since the announcement of Tunerq.

Drilling of the Tunerq nickel prospect by Diamonds North intersected Ni-Cu sulfides yielding 2.49% Ni, 0.56% Cu and 0.05% Co over a 9.1 metre zone within a 34.6 metre zone containing 1.05% Ni, 0.26% Cu and 0.02% Co (see News Release NR08-22, dated June 13th, 2008). In addition to Tunerq, more than 30 ultramafic and mafic targets have been identified on the property. The abundance of mafic and ultramafic intrusive bodies on Amaruk and the nickel grades of Tunerq demonstrate Amaruk as a prime target area for nickel exploration.

Details of the material terms of the Letter of Intent.

In order for MMG to earn a seventy-five (75%) per cent interest in the nickel and base metals on the Property, MMG must:

  1. incur C$6,000,000 in expenditures on the Property within 4 years of signing the formal agreement. MMG shall incur no less than C$750,000 per year until the C$6,000,000 threshold is reached. Exploration costs in excess of minimum obligations incurred in any year may be carried over to subsequent years.
  2. complete and deliver to DDN, a Scoping Study and a Pre-Feasibility Study on one project area within the Property within ten (10) years of execution of the Formal Agreement.

Until earn-in conditions are satisfied, MMG shall have exploration expense obligations of at least C$750,000 per year for years 5 through 8 and C$1,000,000 during years 9 and 10 on the Property to maintain its right to earn the MMG Mineral Interest:

At any time during years 5 through 8 MMG shall have the option, at its sole discretion, to suspend, on a one time basis only, exploration expenditures for a particular year as long as the minimum expenditures are met to maintain claims in good standing.

In the event that DDN dilutes to 10% or less, such interest shall convert to a 2% NSR where 1/2 of the NSR may be purchased for $500,000.

MMG and DDN have 45 days to complete a formal agreement.

Bruce Kienlen (P.Geol) and Graham Gill (P. Geo) are Diamonds North's qualified persons reviewing this project.

About Diamonds North

Diamonds North uniquely maximizes value through innovative & cost effective exploration methods, plus leveraging commodity and business opportunities derived from its vast land holdings in Canada's under explored north.

About MMG

MMG owns and operates a portfolio of base metal mining operations, development projects and exploration fields. The group is a substantial producer of zinc, copper, lead, gold and silver with mining operations located in Australia and Asia and a large portfolio of advanced and early stage exploration projects through Australia, Asia and North America. Current mining operations include the Century, Golden Grove and Rosebery mines in Australia and the Sepon mine in Laos, South-East Asia.

On behalf of Diamonds North Resources Ltd.

Mark Kolebaba, President & CEO

Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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