BHP Billiton To Purchase 20% Interest in Aviat Joint Venture - Empire and Stornoway Waive Right of First Refusal


Northern Empire Minerals Ltd. (NEM) and Stornoway Ventures Ltd. (SWV) announce that, further to their joint press release of May 5th, they have come to an agreement with BHP Billiton Diamonds Inc ("BHPB") to waive their respective rights of first refusal with regards to the sale of Hunter Exploration Group's ("Hunter") minority, 20% participating interests in the Aviat Project to BHPB. BHPB brings a wealth of northern diamond exploration and operating experience, including the successful development of Ekati, Canada's first diamond mine. Their high level of interest and willingness to make a minority investment in the Aviat Project at this early stage is a strong endorsement of the Project's potential.

As previously announced, BHPB agreed to purchase the following interests in the Aviat Joint Venture from Hunter for $7,125,000 Cdn in cash:

  1. a 20% fully participating interest in the Aviat North, Aviat South, Foxe, Tuktu and
    Lyon properties (the "Aviat Properties"); and
  2. marketing rights to the 10% carried interest retained by Hunter in the Aviat Properties.

Under the agreement with NEM and SWV, BHPB has agreed to, among other things, the following in exchange for NEM and SWV waiving their rights of first refusal:

  • BHPB has agreed to standstill agreements under which BHPB agrees not to take certain specified actions to acquire or otherwise take control of NEM or SWV for a period of four years. This restriction terminates in certain specified events, including a third party making an offer for either company.
  • BHPB will pay 100% of the collection and processing costs of the first 200 tonnes of kimberlite bulk samples taken from the Aviat Properties.
  • BHPB, with Hunter's agreement, will waive the provision in the Aviat and Aviat Regional option agreements requiring NEM and SWV to incur a total of $4 million in exploration expenditures to exercise such options. Upon BHPB purchasing the 20% interest in the Aviat Properties from Hunter, NEM and SWV will have been deemed to have earned their collective 70% interest in the Aviat Project and the Aviat Joint Venture will be formed.

In addition, Hunter has agreed to an amendment to the joint venture agreement that will govern the Aviat North and Aviat South properties under which Hunter foregoes 90% of the proceeds attributable to its retained 10% interest in the Aviat North and Aviat South properties until all other parties have been reimbursed for their exploration, development and mine construction costs.

Aviat represents one of Canada's largest diamond exploration projects and was established as a joint venture between Northern Empire, Stornoway and Hunter in 2002 to explore the Melville Peninsula region of Nunavut for diamonds. The partners are optimistic that exploration at Aviat may result in the discovery of an entirely new kimberlite field and welcome the opportunity to work closely with BHPB to realize this objective.

On May 20, 2003 Stornoway and Northern Empire announced that they have entered into an agreement to combine their respective businesses. If successful, the combined company will hold a 70% majority interest in the Aviat Project and varying interests in more than 11 million acres of prospective diamond holdings across Canada.

On behalf of the Board

/s/ "D. Bruce McLeod"
D. Bruce McLeod, P. Eng
Vice President

For further information, please contact the
Company at 604-331-2267 or (888) 338-2200

On behalf of the Board

/s/ "Eira Thomas"
Eira M. Thomas
Chief Executive Officer

For further information, please contact the
Company at 604-687-7545 or (888) 338-2200


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