Untitled Document

...A search for diamonds in the wilderness of West Quebec is set to begin in a few months.
...A group of Ottawa venture capitalists plans to raise money to finance the search. The group says it was encouraged by a geologist's report that found signs that diamonds might exist near the Coulonge River in the Pontiac, a two-hour drive northwest of Ottawa.
...A company is being formed to conduct the search, and though as-yet unnamed, it expects its shares to trade on the TSX Venture Exchange by the end of this year.
...Initially, the company will raise $200,000 to do a survey and some drilling. If it finds signs diamonds might be found, it will conduct a search that could cost millions of dollars, those forming the company say.
...The support of t the group of venture capitalists is a boost for Desmond Burke, 49, who says he's been convinced for years that there are diamonds below ground in West Quebec.
...Mr. Burke will be a director of the company being formed to conduct the search. An earlier attempt by Mr. Burke to find diamonds in West Quebec failed in 1995 when a company he had formed to do the search went bankrupt, leaving debts of $437,000.
...At that time, a bankruptcy trustee found that the company formed by Mr. Burke "never produced anything that was a viable produce."
...This time, Mr. Burke says, "I have the backing of a group of experienced, talented business people who will provide me with the funding and technical ability to prove whether there are diamonds there, and whether it would be economic to mine them.
...Venture capitalist Brian Penny, experienced in operating and investing in technology companies, said he "nearly fell down laughing" when Mr. Burke approached him last fall seeking help to search for diamonds in West Quebec.
...Mr. Penny, chairman of Leitrim Group Inc., which identifies and invests in promising technology companies, said he became convinced Mr. Burke might be onto something.
..."I briefed my colleagues, and they all laughed at me." But, eventually, they came around to joining the search, he said.
...Despite the 1995 bankruptcy, Mr. Burke said he's never stopped looking for signs of diamonds in West Quebec. He owns mineral rights over scattered tracts totaling about 500 square kilometres northwest of Fort Coulonge, across the Ottawa River from Pembroke.
...In recent years, Mr. Burke said, he hasn't had a regular job, but has consulted for Russian mining interests.
...Leitrim Group Inc., whose shares trade on the

TSX Venture Exchange, is merging with a company owned by Mr. Burke to create a new entity to conduct the search. Prior to the merger, the Leitrim group and the TSX venture exchange required an independent geological study of evidence that diamonds might exist in the area.
...The study, paid for by Mr. Burke, was done by Gregory Zale Mosher, a consulting geologist who has specialized in mineral exploration for almost thirty years. In his report, completed in April, he concluded that there was a "reasonable possibility" that diamond bearing rocks might be found in the area. "The apparent geological merit" of the area "is considered sufficient to warrant further exploration."
...Mr. Mosher recommended spending as much as $201,000 surveying the area and doing limited drilling. If the initial study justified further exploration. Mr. Penny said, "industry practice" suggested it might be necessary to spend "several million dollars" on a thorough search.
...If diamonds were found, it would have to be determined whether they were of sufficient quality and quantity to be mined, he said.
...In the event that diamonds could be mined profitably, Mr. Penny said, the concession might be sold to a mining company.
...A diamond mine now operating in Canada's Northwest Territories cost $1 billion, Mr. Penny said.
...Mr. Burke said: "Searching for diamonds is my life's passion. I believe the potential exists to find diamonds in west Quebec. And if we do, it will change the whole economy of the region."