By partnering with three high-profile diamond exploration companies, Samuel has leveraged its exposure to several highly prospective area "plays" - a strategy that is now beginning to pay off. Specifically, Samuel announced in early September its involvement in the discovery of at least one kimberlite pipe in the emerging Churchill Diamond District in Canada's northern Nunavut Territory.

Located on the expansive jointly-held Churchill West Property, this initial discovery was made in the first hole among up to half a dozen similarly defined drill targets. At the time of writing (mid September), at least three more targets in the vicinity of the first pipe discovery have been prioritized for drilling. Accordingly, preliminary drill results are expected to be announced well before the end of the month. This is a compelling development especially since Samuel's jointly-held claim blocks adjoin another property where Shear Minerals recently intersected 15 kimberlite pipes less than 20 miles away. According to Shear Minerals, the presence of "excellent regional kimberlite indicator mineral chemistry" suggests that some or all of these pipes are diamondiferous.

By way of background, Samuel holds an option to earn a 65 per cent working interest in the 514,000-acre Churchill West Diamond Project, located in the eastern Kivalliq region of Nunavut - a virtual virgin territory for diamond exploration. The company benefits considerably from being partnered on this project with Shear Minerals, Stornoway Diamond Corporation and BHP Billiton. Both Stornoway and Shear Minerals have a proven track record for recent diamondiferous discoveries, as well as dynamic management teams. For instance, Stornoway's exploration team is headed up by Eira Thomas who was instrumental in the discovery of the multi-billion dollar Diavik Diamond Mine, which recently went into operation in Canada's Northwest Territories. The third key participant in the Churchill West Diamond Project is BHP Billiton. This subsidiary of one of the world's largest mining companies is also the co-founder, developer and operator of the $2.5 billion Ekati Diamond Mine - which is also in the Northwest Territories.

According to Samuel's agreement with its partners, the company has the right to earn a 65 per cent interest in the project by spending Cdn. $1 million on exploration over a two-year period ending December 31, 2004. However, the agreement provides Samuel's partners with a "clawback" clause, allowing them to increase their interest it the project to 45 per cent (diluting Samuel back to 55 per cent) by expending a further Cdn. $100,000 in exploration costs. Presently, Shear Minerals is the project operator with a 51 per cent interest. Stornoway and BHP Billiton hold 35 per cent and 14 per cent interests, respectively.

Preliminary indications as to the content of the initial kimberlite pipe and any subsequent near-term discoveries are not expected to be available until late October. Meanwhile, a half-dozen or more additional magnetic anomalies may yet be drilled this season. At the same time, an extensive regional and target-specific till sampling program, in conjunction with detailed airborne magnetic surveying, are both being conducted to more thoroughly examine the property for additional drill targets.

Elsewhere, Samuel is strategically positioned at the heart of Nunavut's north central Coronation Diamond District in the immediate vicinity of about a dozen kimberlite discoveries. The company has a significant working interest in three key properties in this diamond field. They include the adjacent Sceptre and Tiara claim blocks, totaling 220,000 acres, in which the company has a 40 per cent interest. These properties adjoin the Inulik Property, which hosts the highly prospective Knife kimberlite pipe. Jointly held by Rhonda Corporation and De Beers, this pipe (which is only about two miles away from the margin of the Tiara Property) has shown some sparkle in mini bulk sample tests. They include a 1.3-tonne chunk of kimberlite facies that produced 0.425 carats of diamond for a very respectable content of 0.33 carat per tonne.

The region is also home to the diamond-laced Artemisia, Kikerk, Potentilla, Thrift and Stellaria pipes which were discovered by Ashton Mining and its various partners. All of these discoveries have been made within a seven-mile radius of the Sceptre and Tiara properties.

Significantly, a 2002 exploration program revealed the presence of six mineral indicator trains on the larger Sceptre Property, as well as two more on the Tiara Property. By way of explanation, indicator minerals are tiny colourful, glassy stones that were dispersed like volcanic ash by the violent eruptions that brought kimbelite pipes to the earth's surface tens of millions of years ago. Though these plentiful stones typically settled in the vicinity of the pipes' cratered surfaces, most have been transported down-ice by glacial action over distances of a few kilometres to hundreds of kilometres. However, shrewd diamond explorers can often trace these telltale trails back to their source. Nonetheless, the right type of indicator minerals, such as high-chrome and low-calcium garnets, have to be present to suggest that a pipe is diamondiferous and not barren.

Fortunately for Samuel, such favourable mineral chemistry and sample distribution from these trains suggest the presence of at least one highly prospective kimberlite pipe on each of these properties. Also benefiting Samuel's is the fact that the company's joint venture partner, Stornoway, has an option to earn a 60 per cent interest in these properties by footing all of the exploration costs. To fully earn-in on these properties, Stornoway, the project operator, must spend up to Cdn. $7 million on exploration by the end of 2006. A 2003 exploration program is well underway to zero-in on the likely sources of these compelling indicator mineral trains.

Samuel's other key prospect in the Coronation Diamond District is the expansive 214-square-mile Jubilee Property which is located near the northern boundaries of the Coronation Diamond District. Samuel has an option to earn up to a 25 per cent interest in the property while Stornoway -- the project operator - has an option to earn up to a 50 per cent interest. A third diamond junior, Earth Star Diamonds Ltd., also has an option to earn an equal interest to Samuel.

To date, a 2002 exploration program identified close to 100 priority kimberlite targets, many of which are currently the subject of closer investigation for the 2003 exploration season. This program includes infill till sampling designed to better define potential indicator mineral trains, as well as ground checking of the numerous airborne anomalies. A number of kimberlitic indicator minerals were recovered from many of the samples in 2002. Of special interest is the fact that the joint venture partnership has identified four or five areas with anomalously high indicator mineral concentrations that appear to be confined to the property.

On a corporate note, the company is presided over by Conrad Swanson, a successful no-nonsense, hands-on businessman who made a name for himself in the real estate industry between the late 70s and mid 90s. Taking on a diversely different challenge, he has surrounded himself with considerable geological expertise to match the high-flyers at Samuel's partners, Stornoway and BHP Billiton.

Swanson's management and consulting team includes John A. McDonald, Ph.D, P. Geo. who acts as a special liaison and strategist with the company's partners on the Churchill West Project. Dr. McDonald is a former Executive Vice President of Winspear Diamonds - a mining junior that was acquired by De Beers for Cdn. $305 million after its headline-grabbing discovery of the Northwest Territories' Snap Lake diamond deposit. Dr. McDonald was directly responsible for the discovery and development of this elusive multi-billion dollar diamond deposit - which is well on its way to becoming Canada's third or fourth diamond mine. An accomplished geologist prior to joining Winspear, Dr. McDonald's career includes ten years as Chief Geologist and Exploration Manager for Western Canada with Esso Minerals.

Another key company figure is Malcolm E. McCallum, Ph.D, P.Geo., who is also a special consultant to the company. Dr. McCallum is an Emeritus Professor of Geology and Research Geologist at Colorado State University where he was involved in mineral exploration-related teaching and research from 1962 through 1995. He is also co-founder of HDM Laboratories Inc. of Colorado, which specializes in diamond and gold exploration samples and evaluations. Dr. McCallum has been involved in kimberlite and diamond related research and exploration worldwide since 1964. Notably, he was a major participant in the discovery of a number of diamondiferous kimberlite occurrences in Colorado, Wyoming, Venezuela, British Columbia and, more importantly, the Northwest Territories and Nuvavut.

On the corporate finance front, Samuel benefits from the involvement of director Derek Huston, a former senior principal with Antler Resources. After merging with Winspear Resources, this new partnership discovered the afore mentioned Snap Lake diamond deposit that was subsequently purchased by De Beers. An adept financier, Mr. Huston has been involved over the years in raising many million of dollars for other junior resource companies.

Other key directors include Patrick Power, a seasoned financier and diamond explorationist who presides over several mineral exploration companies including Arctic Star Diamond Corp. In the quest for Ontario's next major diamond discovery, this well-regarded junior is partnered with the mining major, Kennecott of Canada, as well as Metalex Ventures (the new power play of the famed Dr. Chuck Fipke, the discoverer and part-owner of the multi-billion dollar Ekati Diamond Mine). Additionally, Samuel benefits from the directorship of John Fraser, an accomplished geologist with over three decades of experience in Canada and abroad.

From a technical perspective, Samuel is a tightly-held stock with only about 20 million shares outstanding (approximately 23 million fully diluted). Such a situation, matched with positive news flow, typically acts as a catalyst to higher share price valuations. This scenario is already beginning to unfold following the September 9, 2003 announcement that Samuel and its partners had hit kimberlite pipe on the Churchill West Property.

The company languished for most of the summer mainly in a Cdn. $0.20 to Cdn. $0.25 price band. But now Samuel is beginning to reap the benefits of the last two exploration seasons with some upbeat drilling news and the prospect of more to come during the balance of September and beyond. Accordingly, in spite of share price's abrupt trend reversal towards the upside, SmallcapMedia believes that the company is still undervalued. And the prospect of receiving positive news flow from three different diamond exploration fronts in the coming months should help fuel the company's renewed upward trajectory.