Tahera completed the sample extraction portion of its Muskox evaluation program during the second quarter. This bulk sample program was completed based on results obtained from a sample and caustic fusion program completed in 2005. Approximately 928 dry tonnes of material were collected utilizing large diameter reverse circulation drilling (“LDD”). The Muskox Kimberlite is believed to contain two distinct geological units, the MKU-A unit, which is a magmatic phase of kimberlite and the MKU-B unit, which is a volcaniclastic kimberlite breccia. The MKU-A unit is believed to be relatively internally homogeneous, representing approximately 47% of the pipe tonnage, with the MKU-B unit accounting for the remaining 53%.

During the third quarter of 2006, the bulk sample was processed in a 10-tonne-per-hour dense media separation (“DMS”) plant with a bottom cut-off of 1.0 millimetre (square mesh) at the Rio Tinto Thunder Bay laboratory. The ore was transported to the laboratory during May and June of 2006. Processing began in early July and ended in late October. Kimberlite material representing approximately 865 dry tonnes from the MKU-A unit and 63 dry tonnes from the MKU-B unit were collected. All drill cuttings, kimberlite material totalling 928 dry tonnes, were passed over a 0.85 mm square mesh screen, with larger particles retained in one tonne tote bags. The larger particles totalling 605 tonnes were processed, inferring an average drill recovery of 65%. In total eight drill holes were completed with seven holes intersecting the MKU-A unit and one hole intersected the MKU-B unit. Results are as follows.

Table 1 – Recovered Carats, Diamonds and Carats per Tonne per Kimberlite Phase

Kimberlite Phase	Sample Dry Tonnes	Carats Recovered (+0.85 mm)	Diamonds Recovered (+0.85 mm)	Carats Per Tonne
MKU-A	864.8	455.3	13,890	0.53
MKU-B	63.1	21.8	692	0.35

Table 2 - Recovered Carats, Diamonds and Carats per Tonne per Drill Hole

Drill Hole  ID	Kimberlite Phase	Sample Dry Tonnes	Carats Recovered	Diamonds Recovered	Carats Per Tonne
RC-2006-MOX-101	MKU-A	130.8	60.0	1,884	0.46
RC-2006-MOX-103	MKU-A	124.6	58.7	1,810	0.47
RC-2006-MOX-104	MKU-A	120.9	74.4	2,144	0.62
RC-2006-MOX-107	MKU-A	116.4	69.1	2,019	0.59
RC-2006-MOX-108	MKU-A	120.1	72.6	2,076	0.60
RC-2006-MOX-109	MKU-A	123.5	60.6	2,013	0.49
RC-2006-MOX-110	MKU-A	128.5	59.9	1,944	0.47
RC-2006-MOX-106	MKU-B	63.1	21.8	692	0.35
Total		927.9	477.1	14,582	0.51

All diamonds and diamond weights shown in the charts above are >0.85mm. Stones recovered smaller than 0.85 mm have not been included.

The goal of the bulk sample program was to develop an initial grade estimate, to further the understanding of the characteristics of the diamonds present in the kimberlite, and to collect a sufficient number of carats for the purpose of estimating the value potential of the diamonds contained in the deposit and thus begin to develop a resource model. The 2005 caustic fusion program and related grade modeling performed by Mineral Services Canada Inc. implied a grade range of 0.82 to 1.65 carats per tonne for the MKU-A unit and 0.28 to 0.52 carats per tonne for the MKU-B unit. The above bulk sample results for the MKU-B unit are consistent with the grade modelling performed in 2005; however the MKU-A unit results fall below the range indicated by Mineral Services.

Seven LDD drill holes are spread over an area of only 0.5 hectares near the centre of the MKU-A unit and therefore these results may not necessarily accurately represent the entire unit. Only one of the eight LDD holes targeted the larger MKU-B unit. In addition, low internal grade variability is expected in the magmatic MKU-A unit based on geology and current emplacement model, whereas the MKU-B unit may have higher internal grade variability, which is more common in volcaniclastic kimberlite. Batch sample grades varied from 0.36 to 1.10 carats per tonne for the MKU-A unit and from 0.30 to 0.45 carats per tonne in the MKU-B unit. No commercial grade modelling has yet been undertaken from these sample results.
 
The results of the 2006 Muskox bulk sample are higher than previous results obtained by De Beers Canada Inc. in 1996 and 1997. The combined De Beers samples recovered 16.8 carats from 47.0 tonnes, inferring an average grade of 0.36 carats per tonne. The De Beers sample was made up of both kimberlite units, and estimated to be 75% MKU-A and 25% MKU-B. At this ratio, the 2006 results are 35% higher than the previous results.

The bulk sample was collected using a large diameter reverse circulation drill rig utilising 17.5” holes. All drill holes extended to 305 metres depth below surface, except for the MKU-B hole which was stopped at a depth of 217.5 metres. Each drill hole was made up of approximately 5 batches of 61 metre intervals. The MKU-A sample consisted of 34 batches, while the MKU-B sample was composed of only three batches. Batch sizes ranged from 13 to 37 tonnes and averaged 25.1 tonnes. The drilling was completed by North West Sequoia Drilling of Calgary. Volume measurements were made using a down-hole caliper in all drill holes for accuracy of sampled volume. Specific Gravity (“SG”) and moisture content analyses were completed throughout the kimberlite with 196 external laboratory measurements and 739 in-house SG measurements. These measurements were used to convert volumes to dry densities associated with each batch. The typical density for MKU-B is 2.43 g/cm3 and for the MKU-A unit this figure is 2.76 g/cm3. In-house SG analysis correlated very well with the independent laboratory analysis.

The DMS processing flow sheet was designed for maximum liberation of diamonds >0.85 mm and not necessarily to simulate current commercial production methods. All feed material >1 mm and <16 mm was processed through the DMS, with larger material crushed to 12 mm before processing. A re-crush circuit for DMS tailings was set-up at 4 mm to further liberate diamonds. The recovery circuit included an X-ray recovery system, with a secondary Eriez magnetic concentration system to create a diamond concentrate for picking. Re-crushing of X-ray rejects was completed at 8 mm and then at 4 mm to maximize liberation and these fractions were passed back through the X-ray sorter. Concentrate and X-ray fractions were commonly large and therefore some fractions were reduced using caustic fusion to reduce picking time. All process plant bottom cut-off screens were 1mm square mesh.

The processing and security of the bulk sample was audited at many stages and followed a rigorous quality control program. Diamond spiking used marked natural stones to test recovery of both the processing plant and the recovery circuit. Spiking was completed by the laboratory and averaged more than 99% recovery of spikes. Tahera implemented a random spiking program that was “blind” to the laboratory and recovery of these marked diamonds was 98.2%. DMS processing density and cut-point were strictly controlled and monitored, with independent checks by Tahera. Selections of recovery fractions will be tested for significant diamond loss using total dissolution techniques. DMS tailings (floats) from two batches are being re-processed to confirm proper diamond liberation and recovery. Processing of many of the audits will be completed over the next few months. To date, no significant quality control issues have been found and results of additional audits will be released as they are available. The Thunder Bay DMS process is not an ISO accredited process.

Strict security procedures and industry standard chain-of-custody records were maintained at all times during sample shipping, receiving and processing. All bags were sealed at the collection site and the seals were checked at all stages. The processing facility was equipped with a robust camera and monitoring system and staffed by an independent security company. No significant security or chain-of-custody issues occurred during the collection, shipping, receiving or processing of the bulk sample.

The Muskox kimberlite is situated on the Polar group of claims which is subject to a joint venture with De Beers Canada Inc. The kimberlite is a three hectare body located 14 kilometres west-southwest of Tahera’s Jericho Diamond Mine in Nunavut, Canada. It is located below a small lake with overburden thickness averaging approximately 35 metres. The Company earned a 50% interest in the Polar Project by surpassing the cumulative spending threshold of $11 million on the property in 2006 and is currently the operator of the project. Each of the joint venture partners must contribute their pro-rata share of expenditures or dilute their interest.

(See press release dated April 12, 2006, second quarter report dated August 3, 2006, press release dated November 2, 2006 third quarter report dated November 2, 2006 and second quarter dated August 7, 2007) 

Based on the most recent results, no further work is currently planned on the Muskox Pipe.

Note that the potential quantity and grade that may be inferred from the data is conceptual in nature and readers are reminded that there has been insufficient exploration to define a mineral resource for the Muskox kimberlite. It is uncertain if further exploration of the Muskox kimberlite will result in the delineation of a Mineral Resource.