Hardcastle

With the successful completion of the Company's work at So Ver, the Company focus changed to identifying projects which demonstrated the potential for near-term production with suitable resources for sustained long term production. Diamcor's wholly-owned subsidiary, DMI Diamonds South Africa (Pty) Ltd. ("DMI Diamonds"), acquired an option to secure a 24% interest in the privately held South African company, Nerikets Properties (Pty) Ltd. ("Nerikets"). In the process, DMI Diamonds has also secured an exclusive option to acquire the remaining 76% interest in Nerikets, which held the Prospecting Rights Permit for diamond exploration over a 3,606.44 hectare area of the Farm Hardcastle 366, located on the north bank of the Middle Orange River (see Location Map).

Although the Hardcastle Alluvial Project was a "grassroots" exploration target, with no proven resources at the time, it was situated in a very prospective area. The Middle Orange River is host to a number of highly productive alluvial operations (Wouterspan, Saxendrift, etc.), with grades in the order of 0.5 cpht and values in the $1,000 USD to $1,200 USD per carat. Some of the highest grades of gravel deposits are found in the "Upper Terrace" deposits that are found as much as 100 meters above the present day valley floor. The eastern two-thirds of the Hardcastle project area fell within this elevation range.

Several targets were defined from satellite imagery interpretation (see ASTER Interpretation), and a reconnaissance drill program was designed to test these targets as part of the acquisition evaluation process.

The drill program at Hardcastle was designed to test the satellite imagery interpretation targets and the rest of the prospective area of the property for alluvial gravel deposits. A portion of the initial planned drilling program was completed in 2007, with further drilling being delayed due to the fact the Company encountered a fine sand overburden not suitable for access with the typical drilling rig employed.  Due to the costs associated with securing a suitable drilling rig, the Company elected to postpone further drilling until such time as it could review the initial results from the work completed.  During this evaluation period, the Company was presented with the current opportunity to acquire the much more advanced and desirable project at Krone-Endora, and thus, the Company elected to focus a majority of its efforts on Krone-Endora.