March 23, 1998

Mr. Jasen M. Attew

Assistant Environmental Manager

Canamera Geological Ltd.

Suite 540-220 Cambie Street,

Vancouver, BC. V6B 2M9

RE: NWB Permit No. NWB2JD39899

Dear Mr. Attew :

Please find attached permit No. NWB2JD39899 issued by the Nunavut Water Board pursuant to its authority under Article 13 of the Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in Right of Canada. The terms and conditions of the attached permit related to water use and waste disposal are an integral part of this approval.

Note that Licence No. N7L2 -1666 issued to Lytton Minerals Limited specifically for the disposal of waste for the extraction of a bulk sample and associated activities will expire April 30, 1998. Please formally advise the Nunavut Water Board of your intentions with respect to the renewal of this licence since the renewal process may take at least four weeks.

Sincerely,

Philippe di Pizzo

Executive Director

Enclosure: Permit No. NWB2JD39899

cc:	Ms. Shannon Pagotto, Indian and Northern Affairs Canada

Mr. Wynet Smith, Kitikmeot Inuit Association

Mr. Joe Ahmad, Nunavut Impact Review Board

Ms. Jane McMullen , RWED

WATER USE AND WASTE DISPOSAL PERMIT

Pursuant to Article 13 of the Agreement Between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada, the Nunavut Water Board, hereinafter referred to as the Board, hereby grants to Canamera Goelogical Limited as operators for Lytton Minerals Limited, authorization to use and dispose of waste in conjunction with reverse circulation drilling on JD-03 kimberlite deposit on Inuit Owned Lands, subject to the terms and conditions outlined below and in Land Use Permit No. I97C121 .

PERMIT NO:	NWB2JD39800
PERMITTEE :	Mr. Jasen M. Attew

Assistant Environmental Manager

Canamera Geological Ltd.

Suite 540-220 Cambie Street,

Vancouver, BC. V6B 2M9

Tel: (604) 984-7200 Fax: (604) 984-7266
EFFECTIVE DATE:	March 23, 1998
EXPIRY DATE:	May 19, 1999
PURPOSE:	Water Use and Waste Disposal associated with Exploration Drilling.
LOCATION:	Jericho Diamond Project

General Latitude: 65 58'44" Longitude: 111 36'20"

This permit issued and recorded at Gjoa Haven includes and is subject to the annexed conditions.

Philippe di Pizzo

Executive Director

1.	SCOPE:

1.	Compliance with the terms and conditions of this permit does not absolve the Permittee from responsibility for compliance with all applicable Federal, Territorial and Municipal legislation.

2.	This permit is issued subject to the conditions contained herein with respect to the taking of water and the deposit of waste of any type in any waters or in any place under any conditions where such waste or any other waste that results from the deposit of such waste may enter any waters.

2.	CONDITIONS FOR WATER USE AND WASTE DISPOSAL:

1.	No land-based surface drilling is to be done within thirty (30) metres of the high water mark of any water body or watercourse. Drilling wastes from land-based drilling shall be disposed of in a sump such that they do not enter any water body.

2.	The Permittee shall follow the Interim Guidelines for On-Ice Drilling in the NWT for all on-ice drilling operations. These are:

i.	All drill cuttings shall be removed from the ice surface.

ii.	The release of total suspended solid in the receiving environment shall be in compliance with the Guidelines for Total Suspended Solids contained in the Canadian Council of Ministers of the Environment's ( CCME ) Canadian Water Quality Guidelines, Chapter 3 - Freshwater Aquatic Life.

iii.	For kimberlite targets, non-toxicity must be demonstrated; toxicity testing shall be done on the effluent form the drilling operation and the results shall be submitted to the Board.

3.	Drilling additives or muds shall not be used in connection with holes drilled through the lake ice unless they are re-circulated or contained such that they do not enter the water, or are demonstrated to be nontoxic.

4.	All drill wastes shall be disposed of on land in a sump at least 30 metres from the high water mark of a water body.

5.	The Permittee shall respect the provisions of water licence N7L2 -1666 and its amendments with respect to water use, waste disposal, sewage disposal, and contingency planning.

6.	If artesian flow is encountered, drill holes shall be plugged and permanently sealed upon project termination.

7.	Winter lake and stream crossings shall be constructed entirely of ice and snow materials; stream crossings shall be removed or notched prior to spring breakup.

8.	The Permittee shall not erect camps or store material on the surface ice of streams or lakes.

9.	Only drill additives proven to be non-toxic shall be used in conjunction with this drilling program.

10.	All spills of oil, fuel, or other deleterious materials shall be reported immediately to the 24-Hour Spill Line at (403) 920-8130.

11.	The Permittee shall ensure that any chemicals, fuel, or wastes associated with the project do not enter waters frequented by fish. All sumps and fuel caches shall be located a minimum of thirty (30) metres from the normal high water mark and in such a manner that no fuel can enter any such water body.

12.	The NWB shall be notified of any changes in operating plans or conditions associated with this water use activity.

13.	If operating plans change, the Board shall be informed thirty (30) days prior to any such change.

14.	Annually and within thirty (30) days upon expiration of the authorization, the Permittee shall submit to the Nunavut Water Board a summary report of the water use and waste disposal activities, abandonment and restoration of the site, and list of unauthorized spills and follow-up action taken.

GENERAL CONDITIONS FOR THE ADMINISTRATION OF PERMITS

ISSUED BY THE NUNAVUT WATER BOARD (NWB)

The following conditions form an integral part of Permit No. NWB2JD39899 :

1.	At the time of issuance, a copy of the Permit is placed on the Water Register in the NWB Head Office in Gjoa Haven, and is available to the public.

2.	If the Permittee contemplates the renewal of Permit No. NWB2JD39899 , it is the responsibility of the Permittee to apply to the NWB for renewal of the permit. The past performance of the Permittee , new documentation and information, and issues raised during a public hearing, if the NWB is required to hold one, will be used to determine the terms and conditions of the Permit renewal. Note that if the permit expires before the NWB issues a new one, then water use and waste disposal must cease, or the Permittee will be in contravention of the Nunavut Land Claims Agreement. The NWB recommends that an application for the renewal of Permit No. NWB2JD39899 be filed at least one month before the Permit's expiry date.

3.	If Permit No. NWB2JD39899 requires amendment, then a public hearing may be required. The Permittee should submit applications for amendment as soon as possible to give the NWB sufficient time to go through the amendment process. The process may vary depending on the scope of the amendment requested.

4.	Any communication with respect to this permit shall be made in writing to the attention of:

Philippe di Pizzo

Executive Director

Nunavut Water Board

P.O. Box 119

Gjoa Haven, NT. X0E 1J0

Telephone No:	(867) 360-6338

Fax No:	(867) 360-6369

5.	The Permittee shall submit all reports, studies, and plans to the Board in three copies, and include an Executive Summary in Inuktitut .