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For immediate release
September 20, 2002

VICTOR PROJECT WINTER PROGRAMME ON HOLD

Toronto, September 20,2002 — Discussions between De Beers Canada and the Attawapiskat First Nation on the future of the Victor diamond project resumed and concluded today without agreement being reached. The project has been on hold for two months while the First Nation conducted an internal review of the project.

"De Beers is committed to on-going negotiations with the First Nation," said Richard Molyneux, President and CEO of De Beers Canada. "In March of this year De Beers had already begun discussions on the Impact Benefit Agreement, which would provide the framework for the many longer term benefits to the community arising from a mine, such as compensation, employment, training, business opportunities, and community development," said Molyneux.

During today's five-hour meeting the First Nation demanded further delays in order to negotiate an agreement to cover the winter programme, which was scheduled to begin in November and only involves activities supported and agreed to by the community. The winter programme typically creates 50 or more much needed jobs for the people of Attawapiskat. The winter programme was to form part of site investigations and exploration, and aimed at providing important data needed for the commencement of a feasibility study.

De Beers believes an agreement is necessary and is fully prepared to engage in negotiation with the First Nation. However, the range of issues proposed today for inclusion in the agenda for negotiation on the winter programme include many items which De Beers believes are well outside the necessary scope. As a result, negotiations are likely to extend beyond the planned dates for the start of this work.

De Beers is fully prepared to negotiate on this issue but has requested some commitments to meeting deadlines which the Attawapiskat First Nation has refused.

"Right from the beginning of the two-month delay we have made very clear to the Chief and Council of the Attawapiskat First Nation the nature of the tight deadlines we are faced with for the winter programme. These deadlines relate to permit applications, submissions to the De Beers Board for project funding, and the logistics involved in preparing for the winter programme," said Jonathan Fowler, Manager - Aboriginal & Environmental Affairs for De Beers Canada. "The additional time the First Nation are demanding will take us well past these critical deadlines. It appears we may have to postpone the planned winter work," said Fowler.

He further explained that, "The permits referred to are short-term land use permits and permissions to undertake the various exploration activities, which are processed through the Ontario provincial authorities. De Beers is obviously fully bound to follow existing regulations and permitting requirements."

During the discussions the First Nation accused De Beers of having breached the agreement to cease community consultation during the two-month review period. This accusation referred to the information update the Company published in the Wawatay News on September 5, 2002. The De Beers position is that this update in no way constitutes consultation and was considered to be a simple courtesy owed by the Company to the community and a necessary response to the many requests for information which had been received. With the prior full support of the Attawapiskat Council, De Beers has previously demonstrated its commitment to frequent and transparent communication with the people of Attawapiskat and the Company believes it is under an obligation to maintain this communication with the community, many of whom have been employed by the company and were hoping for further employment this winter.

Chief Hall of Attawapiskat First Nation had been advised of the intention to publish this update well in advance but no objection was received.

Commenting on these developments Molyneux said, "We are very concerned about the impact this further delay will have on the people of Attawapiskat, many of whom were looking forward to employment this winter. It is company policy to maximize local employment opportunities and our project has already brought significant benefits to the community."


- Ends -


For further information contact:
Linda Dorrington
Manager - Public and Corporate Affairs
De Beers Canada
Email: linda.dorrington@ca.debeersgroup.com
Tel: (416) 645-1710 ext 412 / (905) 849-0619



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