MMG must spend C$6 million within 4 years of signing the formal agreement and completing a pre-feasibility study on any base metal deposit that might be identified on Amaruk. The Australia-based major also must complete and deliver to Diamonds North, a scoping study and a pre-feasibility study on one project area within the property within 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 million during years 9 and 10 on the property to maintain its right to earn the 75 percent 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 Diamonds North dilutes to 10 percent or less, such interest shall convert to a 2 percent net smelter royalty where 1/2 of the NSR may be purchased for C$500,000.

MMG and Diamonds North have 45 days to complete a formal agreement.

The companies’ projected budget for 2010 is estimated between C$2 million and C$2.5 million. MMG and Diamonds North plan to mobilize crews into the Amaruk camp in mid-March.

The 2010 exploration plan includes a 40+ kilometer Crone pulse EM survey over the Tunerq prospect, up to 1,500 meters of NQ core drilling, regional prospecting to identify additional mafic and ultra-mafic bodies, and 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,” said Diamonds North President and CEO Mark Kolebaba.

MMG is major producer of zinc, copper, lead, gold and silver with operations in Australia and Southeast Asia. It has an international portfolio of exploration and development opportunities, including the High Lake and Izok Lake deposits in Nunavut. MMG has shown interest in the Amaruk nickel project since the Tunerq prospect was discovered in 2007. Diamonds North discovered the high-grade nickel prospect while prospecting for diamonds.

Drilling of the Tunerq nickel prospect by Diamonds North has intersected nickel-copper sulfides yielding 2.49 percent nickel, 0.56 percent copper and 0.05 percent cobalt over a 9.1-meter zone within a 34.6-meter zone containing 1.05 percent nickel, 0.26 percent copper and 0.02 percent cobalt. In addition to Tunerq, more than 30 ultramafic and mafic targets have been identified on the property.