Diamond prospecting in Victor's shadow.

Two signed agreements between Attawapiskat First Nation and De Beers Canada has given Quebec-based KWG Resources license to continue diamond exploration on treaty lands next door to the Victor project.

The contract calls for the preservation of land, water, wildlife and buriel grounds and to keep the community abreast on exploration matters.

"There is some compensation for some of the areas we have to disturb in the course of the (exploration) process," Smeenk president and CEO of KWG says.

Sub contractors and employees will utilize community equipment and services such as lodging, while a new agreement with De Beers Canada will provide workers with contracted equipment on standby.

De Beers Canda has agreed to give permission for KWG to utilize the road, which extends from Mossenee to Fort Albany and up to Attawapiskat. With the advent of the diamond deposit it has now extended west along the Coast of James Bay to the Victor Mine.

In return, KWG has allowed De Beers to establish a water line and a service road through their property.

"They would have a right-of way across our claims, subject to certain conditions, in exchange for all of their infrastructure," Smeenk says.

Historically, KWG has been known to be the financial arm for Spider Resources. Under the new joint venture agreement, they have taken a step back on some of the properties, redirecting its resources in search of diamond bearing pipes, while Spider continues with base metals prospecting.

A $1.5 million exploration budget in 2007 will allow workers to take up to 3,000-pounds of bulk kimberlite from each of the five targets in the McFadyen property, which butts against the De Beers Victor project.

Originally the intent was to sample these kimberlites last years, however training field workers from the community and signing the De Beers' agreement slowed progress.

Smeenk expects by summer's end to have results from drill projects that are starting any day. If good fortune reigns, the junior will then raise capital for a 200-tonne sample from each pipe.

"We are budgeting for about 17,000 pds. of bulk kimberlite for testing in the lab."

The diamonds counts coming from the Victor mine are unique in that there are few microdiamonds, but more than average larger stones.

"The other thing that makes them unique is the quality and clarity of them. These things sparkle like no other diamond anywhere else in the world," Smeenk says.

Early inidcations suggest the erogeny of the McFadgen pipes are similar in time and chemistry. A further examination will determine if this is true.

By KELLY LOUISEIZE

Northern Ontario Business