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Ashton Mining is well
positioned to make a significant contribution to Canada's expanding role as a major
supplier of diamonds to world markets
Ashton Mining of Canada Inc.
Unit 116-980 West 1st Street
North Vancouver, B.C. V7P 3N4
Robert T. Boyd
President and CEO
Lynn Fosse, Senior Editor
June 16, 2005
Bio of CEO,
Robert T. Boyd
President and Chief Executive Officer
Mr. Boyd is a mining executive with more than 28 years experience in exploration,
executive-level management and corporate finance. He was previously with a financial
advisory firm where he was a founding principal and majority shareholder. Prior to that,
Mr. Boyd was Vice President Exploration for Homestake Canada Limited, where he was
responsible for Homestake's Canadian exploration, financial and administrative groups. Mr.
Boyd presently serves as a Director of the Prospectors & Developers Association of
Canada, the BC & Yukon Chamber of Mines, and the Pacific Mineral Museum. He is a
registered Professional Geoscientist in British Columbia.
Ashton Mining of Canada Inc. ("Ashton") is a leading diamond exploration
company. Since 1993, Ashton has been instrumental in the discovery of three new diamond
districts in Canada.
Ashton is dedicated to
discovering or acquiring diamond prospects capable of rapid advancement to development and
CEOCFO: Mr. Boyd, will
you tell us about your background with Ashton and your vision for the company?
Mr. Boyd: I joined Ashton five years ago as President
and CEO. I am an exploration geologist by training; I moved up through management early in
my career to oversee the Canadian gold exploration activities for Homestake Mining Company
as their Vice President, Exploration for Canada. Following that I was in the investment
banking for about six or seven years before I joined Ashton. My expertise is in the
business of exploration and related corporate finance. My vision for Ashton is to continue
to advance the company towards our prime objective of discovering, developing or acquiring
a diamond deposit capable of rapid advancement toward production. Ashtons ongoing
exploration programs over the past 12 years have been dedicated to that ultimate
CEOCFO: What are your
geographical areas of focus?
Mr. Boyd: The Company is primarily focused in Canada
but we have done some diamond exploration in the United States. Our three key areas in
Canada are in Nunavut, Alberta and Quebec, with the majority of our more recent activity
in Quebec. In Nunavut, Ashton has helped identify a new diamond province called the
Coronation Gulf in the west Kitikmeot region. In Alberta we, together with our joint
venture partners, control the only significant diamondiferous kimberlite cluster in that
province. In Quebec, we and our joint venture partner have discovered a cluster of ten
kimberlitic bodies that have promising economic potential based on initial sample results.
CEOCFO: Will you tell us
about your project in the Quebec area?
Mr. Boyd: We have had significant success in Quebec. In
our 120 acre Core Area, we have identified a concentration of six kimberlitic
bodies, five of which have yielded large diamonds from relatively small samples. In 2004
we completed a 600 tonne bulk sample from four of these bodies. That sample yielded a
parcel of about 470 carats of diamonds, which were the subject of a valuation exercise
last month. We reported a valuation of $88.00 U.S. per carat for the diamonds from those
four bodies, which is well in excess of world average price for rough diamonds produced
from existing mines.
CEOCFO: What further
steps are needed in this area?
Mr. Boyd: That valuation exercise is a preliminary
indication of the value of the diamonds based on a relatively small parcel. In fact, it is
a modeled number, or in other words, the anticipated value of the diamonds from a
potential mining scenario. In order to increase our understanding of the Quebec project
and our confidence in the diamond values, the next logical step is to conduct a larger
bulk sample program. This will give us a more accurate determination of the grade of each
of the bodies we have discovered and a more accurate diamond valuation. This larger bulk
sample involves a significant expense. In order to justify it, our first step this year is
to analyze a number of preliminary mining scenarios to understand their associated capital
and operating costs, and use this information as the basis for determining our plans to
proceed. That analysis will be conducted in conjunction with additional exploration to
expand tonnage in the Core Area and discover new kimberlitic bodies on the property. We
will be working quite closely with our Quebec joint venture partner to finalize our plans.
Our partner is SOQUEM INC. a parastatal Quebec corporation.
CEOCFO: Is it usual for
the government to be a partner?
Mr. Boyd: Its not very common any longer in
Canada, but SOQUEM has been a very good partner for us. They have participated in the
high-risk stages of exploration in Quebec from day one. We are pleased to have them
working with us.
CEOCFO: Quebec is very
favorable to mining, is it not?
Mr. Boyd: Yes it is. We are pleased to be working there
and we know that if the economics justify it, subject to the proper baseline studies and
environmental safeguards, there should be no barriers to advancing our project forward. It
is also important that we make sure that we continue to involve the local community as our
project moves forwards, to ensure that we continue to maintain the positive relationship
we have developed to date.
CEOCFO: Will you tell us
about your funding for all of your projects?
Mr. Boyd: We are currently in diamond exploration, not
mining, and as such we do not have any earnings. Because we are publicly listed, we access
funding through the equity markets. The incentive for investors is a significant potential
capital gain once the discovery of an economic diamond deposit can be demonstrated. Our
largest shareholder is the Rio Tinto Group, one of the worlds largest mining
companies and the third largest diamond producing company in the world. They have been
supportive of our funding activities and have invested $18 million into our treasury over
the last several years.
CEOCFO: How does the
expertise among your team add to Ashton?
Mr. Boyd: Diamond exploration is a risky business. As
of twelve years ago there was not any significant diamond exploration conducted in Canada.
We had to start with a grass roots diamond exploration approach, which led to our
discovery of three new diamond districts in Canada.
There is also lot of science involved in diamond
exploration. There is a science in identifying and separating indicator minerals from
exploration samples and using this information to locate diamondiferous kimberlites.
Kimberlites are rock types that have the potential to host large diamond deposits. There
is also significant expertise to successfully extract material from large samples to test
for diamonds. Once we make a kimberlite discovery, we test it for diamonds through various
laboratory processes. Through caustic dissolution, we can dissolve the entire kimberlite
rock sample and recover diamonds down to 0.1 millimeter in size. This enables us to
determine if a body is diamond-bearing. If this initial test justifies, we can collect a
much larger sample and then process material through our dense media separation (or DMS)
plant where we recover commercial size diamonds.
Ashton has a dedicated and skilled exploration and
laboratory team that is one of the finest in the country. Ashton has an exploration
advantage with our own fully dedicated in-house exploration laboratory, where highly
trained personnel do all the science, exploration, extraction and observing work.
CEOCFO: Are all of your
projects joint ventured?
Mr. Boyd: That is the approach we undertook when the
company first started. It enabled us to share the cost of high-risk, early stage of
diamond exploration. We continue to utilize this approach today. Presently, we have both
wholly-owned and joint venture activities in Nunavut, and our key projects in Alberta and
Quebec are joint ventures.
CEOCFO: Are you
constantly looking for new projects?
Mr. Boyd: I think the nature of exploration is to
continue to search for and identify new opportunities. We conduct grassroots exploration
programs throughout Canada to look for new diamond districts, but we do not spend much
time talking about these activities publicly because of the competitive nature of diamond
CEOCFO: What activities
do you see in the near future for the company?
Mr. Boyd: Our next big step will be in our Quebec
project, when we make the decision on whether a larger bulk sample is justified by the
results of a mining scenario analysis. We expect to make this decision later this year or
early next year. We are also continuing with our programs in Alberta and we expect to be
drilling some kimberlite targets this year. We discovered another kimberlite in Nunavut
this past spring and we will continue to discover new kimberlites in our exploration
target areas. In fact, we have discovered 71 kimberlites in our eleven-year history of
activity in Canada, of which more than 70 percent are diamond-bearing. Ashton is dedicated
to finding a diamond mine and being a company that continues to deliver shareholder value.
CEOCFO: Why should
potential investors be interested and what should they know that perhaps they do not
realize when they first look at the company?
Mr. Boyd: Ashton has perhaps the most experienced
diamond exploration team in Canada, especially among public companies, with a combined
excess of 150 years of diamond exploration and mining industry expertise. That is backed
up by an excellent track record of success as evidenced by our project in Quebec, which is
one of the few projects in Canada that is yielding diamonds larger than 5 carats in size.
We have the track record, the people and the projects to demonstrate our capabilities and
the ability to deliver long term shareholder value.
CEOCFO: Final thoughts
for our readers?
Mr. Boyd: I think it is important to see that the
project that we have in Quebec is outstanding and has the potential to develop into a
mine. Canada is now a major diamond producer and is ranked the third largest diamond
producing country in the world by revenue. There are two new mines under construction, one
in Nunavut, and one in the Northwest Territories. Canada represents the future of the
diamond industry and we at Ashton represent the next phase of growth in that future.
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