Joint Venture Acquisition

14 Aug 2006 07:30

Sunrise Diamonds PLC14 August 2006 www.sunrisediamonds.com 14 August 2006 JOINT VENTURE AGREEMENT SIGNED OVER 16 KIMBERLITES IN FINLAND'S KARELIAN CRATON • Most Of Kimberlites In Kaavi-Kuopio Area Are Diamondiferous • Several Pipes Already Targeted For Further Sampling • Synergy With BHP-Billiton Diamond Exploration Database_______________________________________________________________________ Sunrise Diamonds plc ("Sunrise" or "the Company") is pleased to announce that ithas signed a farm-in and joint venture agreement with Canada's Nordic DiamondsLtd ("Nordic") under which Sunrise may earn up to a 75% joint venture interestin claims covering 16 of the 20 known kimberlite pipes in the Kaavi-Kuopio areaof south-central Finland, most of which are diamondiferous. Sunrise already holds claim applications over two of the other four pipes inthis cluster and had previously identified a number of the pipes covered by theNordic agreement as targets for further sampling. The 16 pipes range in size upto 2.2 hectares and were discovered by Ashton Mining and its joint venturepartners in the period prior to that company's takeover by Rio Tinto in 2000,when the emphasis of diamond exploration switched to Canada. Recent work by Nordic on the joint venture claims focused on data compilationand also on drilling two of the previously discovered pipes (Pipes 12 and 21),with the intent of re-evaluating diamond content and kimberlite geology. Nordicdrill core samples from Pipe 21 (reported area approximately 1.3 hectares)returned high micro-diamond counts of up to 1.84 micro-diamonds/kg of kimberlitesupporting the results of a 16.6 tonne mini-bulk sample previously taken byAshton Mining in 1995, which returned a reported grade of 26.7 carats perhundred tonnes including a stone of 1.13 carats. Approximately 79% of themicro-diamonds recovered by Nordic were reported to be white and 91%transparent. The joint venture claims also include three kimberlite pipes lying within fivekilometres of the Lahtojoki kimberlite (Pipe 7), currently being bulk-sampled byEuropean Diamonds plc. They also cover a number of kimberlite targets such asthe high priority "Target 295" kimberlite indicator mineral anomaly wherenumerous G10 garnets, kimberlitic ilmenites and kimberlitic rock fragments werefound. The agreement with Nordic allows Sunrise to earn up to a 75% Joint VentureInterest by sole funding exploration expenditure totalling Euros 1,000,000within 4 years There is no fixed expenditure obligation during the initial 12month period of the agreement other than to pay ongoing government claim costs.The Company is required to spend a minimum of Euros 150,000 by the end of yeartwo and a minimum total of Euros 500,000 by the end of year three, after whichit will have earned an initial 51% Joint Venture Interest. The new joint venture area supplements the Company's ongoing exploration of itsnewly discovered Kuusamo kimberlite cluster in northern Finland and complementsthe acquisition last December of rights to the BHP Billiton diamond explorationdatabase for Finland. The latter includes extensive exploration data on theKaavi-Kuopio area collected by BHP Billiton subsidiary Diamet and its formerjoint venture partner Ashton Mining. "This agreement is another piece of the diamond exploration jigsaw we areassembling in Finland", said Sunrise chairman, Mr Patrick Cheetham. "It willincrease the number of diamondiferous kimberlites under evaluation and take usfurther down the road towards a commercial discovery". Further Info: Patrick Cheetham, Sunrise Diamonds plc. Tel: +44 (0)1625-505947. Mob: +44 (0)7767-458751 John Greenhalgh/Ron Marshman, City of London PR Ltd. Tel: +44 ( 0)20-7628-5518 The information in this release has been compiled and reviewed by Mr. PatrickCheetham (MIMMM, MAusIMM) who is a qualified person for the purposes of the AIMGuidance Note for Mining Oil & Gas Companies issued on March 16, 2006. MrCheetham is a Member of the Institute of Materials, Minerals & Mining and also amember of the Australasian Institute of Mining & Metallurgy. This information is provided by RNS The company news service from the London Stock Exchange