LAC DE GRAS PROJECT, Northwest Territories

(22,407 hectares, 11 properties, diamonds)

Acquisition:

Thelon owns seven claim groups D, J, K, L. Oki, Thon and the Afridi mineral claims in the Lac De Gras area which has an east-west extent of about 76 km. The company also staked additional ground in 2002 when ground began to come available following the major staking rush precipitated some 10 years before by the first discovery of diamonds in the area. Thelon has an agreement with Peregrine Diamonds (PGD) whereby Peregrine can earn a 65% interest by spending $4.1 million in exploration and underlying land payments over 5 years. Under this agreement with Peregrine Diamonds, Thelon receives a 1% GOR on an additional 60,762 Hectare's held by Peregrine.

The Area & Work History:

These properties are located about 300 kilometers northeast of Yellowknife, NWT and access is by air or, during winter, by winter ice road that services the nearby Ekati and Diavik mine sites.

When Diamet announced the discovery of diamonds and began the acquisition of large parcels of land near Lac de Gras in 1991, the largest staking rush in Canadian mining history commenced. Ultimately, two world class diamond mines went into production with more under development.

BHP's Ekati Mine, which commenced production in 1998 at a rate of 2.5 million carats per year after an initial investment of $1 billion, and

The Rio Tinto / Aber Diavik Mine, which recently began operations (capital cost of $1.3 billion).

Each of these operations, which are about 40 km apart, depend on ore from numerous diamondiferous kimberlite pipes discovered since 1991.

At one time, Kennecott Canada Inc. explored much of the area currently comprising Thelon⮮s properties. Kennecott conducted extensive airborne geophysics and till sampling followed up by selective ground geophysics and diamond drilling. After acquiring the property, Thelon commissioned a 559.6 Km line survey flown by Fugro Airborne Surveys Corp. which was completed in mid 2003 on portions of the D, J, K, Oki and Thon claims and, as a result of this survey, eleven high priority targets were confirmed and recommended for follow-up exploratory work.

Thelon's J.V. partner, Peregrine Diamonds Ltd., holds a majority interest in the DO- 27 kimberlite property which lies adjacent or contiguous to several of the Thelon properties. During 2005, Peregrine completed six large diameter drill holes at DO-27. Two different primary pyroclastic kimberlite phases were intersected. Based on these results, Peregrine has begun a large bulk sampling program for 2006.

Peregrine Diamonds has taken a direct position in Thelon Ventures by purchasing 10% of a recent share offering. Thelon's President, Jason Walsh, noted, Peregrine, being the operator of the DO-27 exploration program, is involved in a project that shows considerable promise. We at Thelon are looking forward to the direct involvement of Peregrine in the continued exploration and development of the Lac De Gras diamond properties, and we welcome Peregrine as a significant stakeholder in our company.

The entire Lac De Gras area is immensely attractive as evidenced by the participation by such giants as DeBeers, BHP Billiton Kennecott/Southern Era, and well financed juniors such as Strongbow / Stornoway, GGL Diamonds, Diamondex, and Shear International in addition to Thelon and Peregrine

Maps:

East Zone Kimerlite Indicator Map:



West Zone Kimerlite Indicator Map

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