Horton River Project

 Talmora Diamond Inc. has acquired twelve prospecting permits (2827, 2828, 2829, 7305,   

 7306, 7307,  7308, 7309, 7310, 7311, 7312 and 7313) covering 645,718 acres in the Horton   

 River area of the Northwest Territories. The Horton River Diamond Project is 100-200   

 kilometers south of Paulatuk, a village located on the arctic coast, and about 400 kilometers   

 east of Inuvik. It is located on Crown Land and is surrounded by permits and claims held by   

 Sanatana Diamonds Inc.

 Three permits are valid until January 31, 2008, six are valid until January 31, 2010 and three are

 valid until January 31, 2012. Performance deposits have been posted on the permits but will be  

 refunded if approved work is subsequently performed. Claims may be staked within the permit  

 areas before they expire.

 
 Three original permits were acquired as a diamond prospect on the basis of anomalous stream

 sediment samples and because they lie on a zone of diabase dykes along which Darnley Bay   

 has discovered 10 kimberlite pipes (6 known to be diamondiferous). The remaining permits   

 were acquired to cover the up-ice projection of the anomalous samples. 

 Talmora believes that its permits lie on a favorable trend that is the northern projection of the   

 Slave Diamond Corridor displaced to the west on a pre-Paleozoic fault running along the north  

 shore of Great Bear Lake and through Coronation Gulf. The Slave Diamond Corridor includes   

 the Diavik, Ekati and Jericho diamond mines and the Snap Lake, and Kennady Lake deposits  

 being permitted for production.

 
 Diamondex Resources Ltd. acquired 6 million acres (known as the West Lena project) in 2003  

 about 175 kilometers west of the Talmora permits and has reported significant results in press  

 releases. In 2004 a record number of permits were awarded for diamond exploration in the   

 Horton River – West Lena area including those of Sanatana that surround the Talmora permits.

 Sanatana collected till samples in 2004 at a density of 1 per 14,000 acres over their entire block

 of 18.2 million acres. Their indicator mineral map shows a concentration of anomalous samples  

 down-ice of the Talmora permits. There is a good chance that some of the indicator minerals   

 may originate from a source up-ice on the Talmora permits.

 Most permits south of 68°N have expired but areas with kimberlite potential have been staked   

 by the previous permit holders. Sanatana have staked a large block of claims on the SSE   

 projection of the favorable trend of diabase dykes adjoining the SE corner of the Talmora   

 property.

  Talmora Diamond spent approximately $150,000 on an orientation sampling survey of its   

 original three permits in the fall of 2004. The work included the collection of 127 till and stream   

 samples of ten litres each and examination of the –1.00mm to +0.30mm concentrate fractions.  

 This confirmed the presence of anomalous numbers of kimberlite indicator minerals and   

 produced a guide for further sampling.

 Follow-up work planned for 2007 is aimed at producing drill targets and includes examination of

 the –0.3mm to +0.25mm fractions of the 2004 orientation samples in order to define indicator   

 mineral trains, more detailed stream and till sampling and an airborne magnetic survey. A   

 second phase of further sampling and ground magnetic surveys to define drill targets is   

 dependent on the results of the first phase.  Continuing positive results would lead to drill testing  

 of 3 to 4 targets. The first phase is estimated to cost $0.5 million and the total cost is estimated  

 at $1.4 million.

 Mr. Alan W. Davies, P.Eng., P.G. is the “qualified person” for the purposes of the above   

 technical information pursuant to National Instrument 43-101.