Tuesday 25th October 2016

Resource Clips

Posts tagged ‘Rio Tinto PLC ADS (RIO)’

Pistol Bay Mining to take largest position in Ontario’s VMS-rich Confederation Lake

October 19th, 2016

by Greg Klein | October 19, 2016

Pistol Bay Mining to take largest position in Ontario’s VMS-rich Confederation Lake

Pistol Bay’s holdings will cover a 31-kilometre length of the VMS-rich Confederation Lake greenstone belt.


A new acquisition would make Pistol Bay Mining TSXV:PST the biggest claimholder in Ontario’s Confederation Lake greenstone belt. The 5,136-hectare package comprises all the regional claims held by AurCrest Gold TSXV:AGO and includes a zinc-copper-silver resource as well as an historic, non-43-101 estimate. Along with Pistol Bay’s optioned Dixie and Dixie 3 properties, the letter of intent announced October 19 would increase the company’s holdings to 7,050 hectares on the volcanogenic massive sulphide-rich belt.

With three cutoff grades, the package’s Arrow zone has resources showing:

3% zinc-equivalent cutoff

  • indicated: 2.07 million tonnes averaging 5.92% zinc, 0.75% copper, 21.1 g/t silver and 0.58 g/t gold

  • inferred: 120,550 tonnes averaging 2.6% zinc, 0.56% copper, 18.6 g/t silver and 0.4 g/t gold

5% zinc-equivalent cutoff

  • indicated: 1.76 million tonnes averaging 6.75% zinc, 0.79% copper, 22.3 g/t silver and 0.61 g/t gold

  • inferred: 51,630 tonnes averaging 3.86% zinc, 0.79% copper, 23.9 g/t silver and 0.58 g/t gold

10% zinc-equivalent cutoff

  • indicated: 633,000 tonnes averaging 14.3% zinc, 1.11% copper, 31.7 g/t silver and 0.85 g/t gold
Pistol Bay Mining to take largest position in Ontario’s VMS-rich Confederation Lake

Pistol Bay’s Dixie properties have been
undergoing field work and a review of historic data.

Additionally, the Copperlode A or Fredart zone has an historic, non-43-101 estimate of 425,000 tonnes averaging 1.56% copper. Exploration in the 1970s produced samples up to 1.46% molybdenum.

The 100% option would cost $25,000 and one million shares on closing and $25,000 90 days later, as well as $50,000 and one million shares on each of the four anniversaries following closing. In addition to regulatory approvals, the transaction needs the consent of Glencore plc, whose rights to the Confederation Lake property include a 2% NSR.

The companies expect to close within a week.

“Pistol Bay proposes an ambitious exploration program that will not only pursue existing targets and known VMS deposits, but will use the latest airborne geophysical survey technologies to explore the whole area to a greater depth than was possible in the past,” said president Charles Desjardins.

Earlier this month the company announced MPH Consulting will review historic geophysical data on Pistol Bay’s Confederation Lake-region Dixie properties, where field work began in September. Historic drilling has found zinc, copper and silver, while the recently optioned Dixie 3 project comes with an historic, non-43-101 estimate of 82,500 tonnes averaging 1% copper and 10% zinc.

The company has a joint venture with a Rio Tinto NYSE:RIO subsidiary on the C-5 uranium property in Saskatchewan’s Athabasca Basin. Having already earned 75% of its option, Rio has stated its intention to acquire the full 100%.

Pistol Bay closed a $563,450 private placement last August.

MPH Consulting to review Ontario zinc-copper-silver data prior to Pistol Bay’s drill program

October 6th, 2016

by Greg Klein | October 6, 2016

A company with experience spanning 40 years and 70 countries will apply its expertise to Pistol Bay Mining’s (TSXV:PST) Dixie projects. MPH Consulting has been contracted to review historic geophysical data from the zinc-copper-silver options about 35 kilometres southeast of Red Lake in Ontario’s Confederation Lake greenstone belt, Pistol Bay announced October 5.

MPH Consulting to review Ontario zinc-copper-silver data prior to Pistol Bay’s drilling

“Because of the complexity of the historic data, the company has requested a critical review of all the past geophysical surveys that will lead to prioritizing targets for future exploratory drilling,” Pistol Bay stated.

Historic work found a geophysical anomaly below the Dixie 19 zone. Two holes from 2002 ended before the anomaly, intersecting:

  • 9.71% zinc, 0.2% copper and 10.7 g/t silver over 1.25 metres in downhole depth

  • 5.32% zinc over 1.25 metres

Historic drilling on other zones found:

Dixie 17

  • 7.34% zinc and 1.4% copper over 9.5 metres

Dixie 18

  • 15.44% zinc, 0.43% copper and 20.9 g/t silver over 4.3 metres

Noranda calculated an historic, non-43-101 estimate for Dixie 18 of 136,000 tonnes averaging 14% zinc.

Recent field work has located historic drill hole collars on Dixie 18, 19 and 20, Pistol Bay added. Additional field work will focus on Dixie 17. Precise positioning using differential GPS will help model the mineralized zones.

Should all go to plan, a fall drill program will follow the MPH review.

Early last month Pistol Bay announced an option to acquire the 640-hectare Dixie 3 property, about eight kilometres south of the other Dixies. Dixie 3 comes with an historic, non-43-101 estimate of 82,500 tonnes averaging 1% copper and 10% zinc.

In Saskatchewan’s Athabasca Basin, Pistol Bay JVs with a Rio Tinto NYSE:RIO subsidiary on the C-5 uranium property. Rio has so far earned 75% of its option and has stated its intention to acquire the full 100%.

In August Pistol Bay closed a $563,450 private placement.

Why stop there?

September 20th, 2016

The world’s biggest new diamond mine hardly satisfies NWT appetites

by Greg Klein

Self-congratulation might have been irresistible as 150 visitors from across Canada and the world flocked to a spot 280 kilometres northeast of Yellowknife to attend Gahcho Kué’s official opening on September 20. But there’s no evidence the mining and exploration crowd will waste much time resting on their laurels. JV partners De Beers and Mountain Province Diamonds TSX:MPV continue their pursuit of additional resources. And within sight of the Northwest Territories’ new mine, Mountain Province spinout Kennady Diamonds TSXV:KDI hopes success will repeat itself right next door.

Twenty-one years in the making and the world’s largest new diamond mine in 13 years, Gahcho Kué’s expected to give up 54 million carats over a 12-year lifespan. Average price estimates for the three pipes come to $150 per carat. That would provide Canada with gross value added benefits of $6.7 billion, $5.7 billion of that going to the NWT, which would gain nearly 1,200 jobs annually, according to an EY study released earlier this month.

The world’s biggest new diamond mine hardly satisfies NWT appetites

Gahcho Kué partners hope to extend the
mine well past its 12-year projection.

That’s a strong rebound for the territory’s biggest private sector industry, following last year’s shutdown of the Cantung Tungsten mine and De Beers’ Snap Lake. The closures left the NWT with just two mines, both diamond operations in the Lac de Gras region that also hosts the newcomer.

But those two mines, the Rio Tinto NYSE:RIO/Dominion Diamond TSX:DDC 60/40 JV at Diavik and Dominion’s majority-held Ekati, maintained Canada’s place as the world’s third-largest producer by value.

Holding 51% and 49% respectively of Gahcho Kué, De Beers and Mountain Province hope to prolong its duration. Rather expansively maybe, the slightly junior partner outlines a multi-phase program.

Should all go to plan, Phase II would upgrade resources into reserves, maybe adding as much as five years to the operation. Phase III would deepen the Tuzo pipe, bringing another three years. Phase IV would do the same to the 5034 and Hearne kimberlites, as well as bring on the new Tesla pipe. If plans, projections and prayers come to fruition, Gahcho Kué might end up with more than 20 years of operation. With optimism drowning out any puns regarding pipe dreams, Phase V calls for “new targets.”

At least that’s the tale told by Mountain Province. De Beers acts as project operator.

Another company also holds high hopes, as well as about 71,000 hectares to the north, west and south of Gahcho Kué. Mountain Province spun out the Kennady North project into Kennady Diamonds, which has been advancing its own ambitious timeline.

The project’s Kelvin kimberlite has a maiden resource slated for this quarter and a PEA for Q4. Subject to those results, the company hopes to take Kelvin to feasibility next year, and to complete resource estimates for the Faraday 1, 2 and 3 kimberlites less than three kilometres northeast.

On the eve of the Gahcho Kué grand opening, Kennady pronounced itself pleased with this year’s 612-tonne bulk sample recovery, averaging 2.09 carats of commercial-sized stones per tonne from Kelvin’s north limb. With last year’s south limb grade coming to 2.02 carats per tonne, the results show “remarkable consistency in overall diamond grade across the full extent of the body,” said president/CEO Rory Moore. “This is a positive attribute from both an evaluation and a mining perspective.”

In a crucial step, a parcel goes to Antwerp next month for a price evaluation, with results expected about three weeks later.

The world’s biggest new diamond mine hardly satisfies NWT appetites

Kennady Diamonds hopes for a
glittering future just north of Gahcho Kué.

Two rigs currently have the Faraday kimberlites subject to an 8,000-metre summer program of both exploration and delineation drilling. Out of 15 holes reported so far, 14 revealed kimberlite.

The summer program follows a 10,712-metre winter campaign that discovered Faraday 3 as well as four diamonds in drill core, two each from Faradays 1 and 3.

Two mini-bulk samples released this year for Faraday 1 averaged 4.65 carats per tonne and three carats per tonne respectively. Faraday 2 minis averaged 2.69 carats, 3.04 carats and 4.48 carats per tonne.

Last month Kennady expanded its property by another 4,233 hectares directly south of Gahcho Kué. But the company’s focus remains on the Kelvin-Faraday corridor north of the new mine.

As for De Beers, its other Canadian focus since Snap Lake’s demise has been the Victor mine in Ontario’s James Bay region. With less than five years of operation left, it too faces doom. Another seven years could potentially come from the Tango kimberlite, seven kilometres away and now undergoing a federal environmental review.

Local relations, however, have taken an unexpected turn. Last week De Beers Canada chief executive Kim Truter told CBC the company would go beyond the duty to consult and seek the Attawapiskat community’s outright consent for Tango. “It’s pointless us actually operating in these first nations areas if we don’t have local support,” he said.

The network added, “Support has been shaky in the first nation since the signing of the original agreement with De Beers in 2005. Band officials boycotted and picketed the grand opening of the mine in 2008 and the road into the mine has been blockaded several times, including in 2013.”

But Truter’s remarks drew an angry response from newly elected chief Ignace Gull, the Timmins Press reported September 19. The paper quoted a social media post in which he stated, “Attawapiskat is in a midst of suicide crisis and we need to deal with this first and they have to back off instead of threatening us.”

In Quebec’s James Bay region, Stornoway Diamond TSX:SWY began ore processing at its Renard project in July, expecting to achieve commercial operation by year-end. The province’s first diamond mine expects to average 1.6 million carats annually for an initial 14 years.

Back at Gahcho Kué, visitors celebrated the grand opening as a possible strike loomed. Last week CBC reported that mediation had broken down between a contractor and a Teamsters local representing around 60 camp kitchen and cleaning staff.

Pistol Bay readies geophysics, fall drilling for Ontario zinc and copper

September 8th, 2016

by Greg Klein | September 8, 2016

With field work about to begin, Pistol Bay Mining TSXV:PST renews the search for zinc and other base metals on its newly expanded Dixie projects in Ontario’s Red Lake region. Historic geophysics and drilling found multiple occurrences of predominantly zinc-rich, volcanogenic massive sulphide mineralization and two historic, non-43-101 estimates for near-surface deposits, the company stated.

An historic, non-43-101 estimate for the Dixie 3 zone, for example, showed 82,500 tonnes averaging 10% zinc and 1% copper.

Pistol Bay readying geophysics, fall drilling for Ontario zinc and copper

Subject to permitting, the company plans line cutting, ground geophysics, stripping and a fall/winter drill program on shallow targets that have yet to be adequately tested. Work could also entail additional deep-penetrating electromagnetic surveys.

A review of previous exploration will include locating drill collars, where possible, to model mineralized zones. Work might also entail downhole EM surveys to search for deeper mineralization. Historic core will be assessed, as well as new rock samples.

Last week Pistol Bay announced an option to add the 640-hectare Dixie 3 property to its other Dixie projects about eight kilometres away. The properties sit within the Confederation Lake greenstone belt, host to numerous VMS occurrences and deposits, the company added.

In a JV with a Rio Tinto NYSE:RIO subsidiary, Pistol Bay holds the C-5 uranium property in Saskatchewan’s Athabasca Basin. Having so far earned 75% of its option, Rio has stated its intention to acquire the full 100%.

On August 29 Pistol Bay closed a $563,450 private placement.

Pistol Bay benefits from previous work by expanding its Dixie zinc-copper project

September 1st, 2016

by Greg Klein | September 1, 2016

An option announced September 1 would add 640 hectares to Pistol Bay Mining’s (TSXV:PST) zinc-copper claims in Ontario’s Red Lake mining district. Formerly known as the Snake Falls property, Dixie 3 sits eight kilometres from the company’s Dixie 17, 18 and 19 properties. All four host mineralized zones and reside within the Confederation Lake greenstone belt, home to several volcanogenic massive sulphide deposits. The four Dixies now total 1,712 hectares, roughly 35 to 45 kilometres southeast of the town of Red Lake.

Pistol Bay benefits from previous work by expanding its Dixie zinc-copper project

Past exploration on Dixie 3 included 80 drill holes, finding a number of mineralized zones including the Dixie 3 VMS zone. Some historic intervals from the property include:

  • 1.1% zinc and 0.08% copper over 30.5 metres in downhole depth

  • 0.95% zinc over 18.4 metres

  • 0.5% zinc and 0.04% copper over 28 metres
  • (including 1.9% zinc and 0.11% copper over 5.2 metres)

  • 0.57% zinc and 0.05% copper over 24 metres

A notable intercept from Dixie 17 found 7.34% zinc and 1.4% copper over 9.5 metres. The Dixie 18 mineralized zone has been drilled to 250 metres in length and 150 metres in depth. The Dixie 19 zone has been tested over a length of 500 metres, with intervals up to 6.33% zinc and 1.5% copper over 3.55 metres.

Pistol Bay intends to compile Dixie 3’s historic drilling and geophysical data. Future work could include additional deep-penetration surveys, as well as drilling new targets and possible extensions of mineralized zones. The property can be reached by all-weather forestry access roads.

Dixie 3 comes with a price tag of $56,000 and 2.4 million shares over three years. NSR royalties totalling 1% apply.

In Saskatchewan’s Athabasca Basin, Pistol Bay holds the C-5 uranium property, a JV with a Rio Tinto NYSE:RIO subsidiary which has so far earned 75% of its 100% option.

Earlier this week Pistol Bay closed a private placement of $563,450.

Canada’s new diamond mines: Gahcho Kué ramping up, Renard catching up

August 3rd, 2016

by Greg Klein | August 3, 2016

“On time, on budget and in a challenging environment,” as De Beers CEO Bruce Cleaver proudly noted, the world’s largest new diamond mine has begun full commissioning. The Northwest Territories open pit should reach full production in Q1 next year with average output of 4.5 million carats annually over its 13-year lifespan, according to an August 3 statement from Anglo American. Or a 12-year life, according to a same-day statement from Mountain Province Diamonds TSX:MPV.

Canada’s new diamond mines: Gahcho Kué ramping up, Renard catching up

Sub-arctic conditions hardly deter De Beers,
which has opened three diamond mines in Canada’s north.

The company owns a 49% stake in the JV, with operator De Beers holding the rest. De Beers, in turn, is held 85% by Anglo and 15% by Botswana.

Mountain Province reported two large gem-quality stones recovered over the past few days, weighing in at 12.1 carats and 24.65 carats. The company expects its first diamond sale by year-end.

Located about 280 kilometres northeast of Yellowknife, Gahcho Kué sits in the diamondiferous Lac de Gras region that also hosts Dominion Diamond’s (TSX:DDC) majority-held Ekati mine, the Rio Tinto NYSE:RIO/Dominion 60/40 JV at Diavik, and Snap Lake, De Beers’ first mine outside Africa. De Beers also operates the Victor mine in northern Ontario.

Snap Lake, a money-loser since opening in 2008, shut down last December. The company plans to flood the mine unless a buyer can be found. Output from Ekati and Diavik, however, sustained the NWT’s rank as the world’s third-largest diamond producer by value.

The two operations also sustained mining as the NWT’s largest private sector employer, despite the closures of Snap Lake and North American Tungsten’s Cantung mine in October 2015.

In Quebec’s James Bay region, meanwhile, Stornoway Diamond TSX:SWY began processing ore at its Renard project last month, slated to achieve full nameplate capacity within nine months. The company will declare commercial production after 30 days of processing ore at 60% of nameplate capacity, expected to happen by year-end. The combined open pit/underground operation would average 1.8 million carats annually for the first 10 years of its 14-year life. Average prices have been estimated at $155 per carat.

Read more about Canadian diamond projects.

See Chris Berry’s report on long-term diamond demand.

Appointments, consultation advance Dunnedin Ventures’ diamond deposit

July 12th, 2016

by Greg Klein | July 12, 2016

With the goal of unearthing more Nunavut diamonds, Dunnedin Ventures TSXV:DVI announced new directors and positive community engagement on July 12. Claudia Tornquist joins the board after having been a technical adviser to the company since 2015. She’s also served as a Rio Tinto NYSE:RIO general manager, working on diamond projects in Canada and Australia. As executive VP for business development with Sandstorm Gold TSX:SSL, she helped finance juniors with streaming, equity and debt. Tornquist also sits on the board of Kennady Diamonds TSXV:KDI.

Appointments, consultation advance Dunnedin Ventures’ diamond deposit

Dunnedin expects to release last year’s sampling results soon.

Also joining Dunnedin’s board is geologist Chad Ulansky, whose experience in 15 countries includes participation in Ekati, Canada’s first big diamond discovery. He’s currently president/CEO of Metalex Ventures TSXV:MTX and Cantex Mine Development TSXV:CD, as well as a director for several public and private explorers. Along with Dunnedin adviser Chuck Fipke, Ulansky guided the company’s 2015 till sampling program on the Kahuna project, about 25 kilometres from the hamlet of Rankin Inlet on Hudson Bay’s northwestern shore. Those results are expected soon.

Dunnedin also reported the Chesterfield Inlet Community Lands and Resource Committee endorsed the company’s future exploration plan with two provisions. Under the agreement, Dunnedin would integrate community knowledge into its work to minimize effects on wildlife and help the Kivalliq Inuit Association clean up an exploration site abandoned by Shear Minerals. “While not on the Kahuna project claims, the camp is a concern for many local residents and Dunnedin has formally offered assistance with the KIA’s upcoming clean-up efforts,” the company stated.

The KIA granted Dunnedin a staking and prospecting permit valid through 2018, the company added. Dunnedin’s permit from Indigenous and Northern Affairs Canada remains valid until 2017. Following community input, the company will submit an amended application for bulk sampling and drilling beyond 2017 and 2018 to the Nunavut Impact Review Board.

The project hosts a January 2015 inferred resource for the Kahuna and Notch dykes, 12 kilometres apart:

  • Kahuna (+0.85 mm cutoff): 3.06 million tonnes averaging 1.04 carats per tonne for 3.19 million carats
  • (+1.18 mm cutoff): 0.8 ct/t for 2.45 million carats

  • Notch (+0.85 mm cutoff): 921,000 tonnes averaging 0.9 ct/t for 829,000 carats
  • (+1.18 mm cutoff): 0.83 ct/t for 765,000 carats

  • Total (+0.85 mm cutoff): 3.99 million tonnes averaging 1.01 ct/t for 4.02 million carats
  • (+1.18 mm cutoff): 0.81 ct/t for 3.22 million carats

Both kimberlites remain open along strike and at depth. The property holds six other diamond-bearing kimberlites.

In March the company announced recovery of 36 commercial-sized diamonds from a 2.4-tonne Notch sample that was about 40% complete. Late last year an 820-kilogram sample from the project’s PST kimberlite revealed 96 commercial-sized stones.

Read more about Dunnedin Ventures.

Read more about Canadian diamond projects.

See Chris Berry’s research report on long-term diamond demand.

Diamonds for future demand

July 8th, 2016

Dominion gives Jay the go-ahead while Peregrine brings Chidliak to PEA

by Greg Klein

Spurned by the forces driving gold and silver, diamonds’ sparkle may have sputtered. But looking further ahead Canadian companies remain optimistic, and demonstrably so. This week Dominion Diamond TSX:DDC announced plans to move forward with the previously postponed Jay pipe addition to the Northwest Territories’ Ekati mine. One day later Peregrine Diamonds TSX:PGD outlined an ambitious scenario for Chidliak, suggesting a possible Nunavut gem operation by 2021. Meanwhile progress continues on two very near-term producers in the NWT and Quebec.

Baffin Island remoteness be damned, Chidliak could come online for well under a half billion dollars, according to a July 7 preliminary economic assessment. The study foresees Phase I open pit mining beginning with the property’s CH-6 pipe, followed by CH-7, 15 kilometres away. Output would average 1.2 million carats per year for a decade, peaking at 1.8 million carats.

Dominion gives Jay the go-ahead while Peregrine brings Chidliak to PEA

Peregrine Diamonds sees potential to expand existing
resources and find new deposits on its Nunavut kimberlites.

Using a 7.5% discount rate, the PEA calculates an after-tax NPV of $471.2 million and a 29.8% IRR. Initial capex would come to $434.9 million with payback in two years. Costs include 160 kilometres of all-weather road to the territorial capital of Iqaluit.

Not mentioned in the announcement, however, is the town’s lack of port facilities. The island’s only operating mine is Mary River, 935 kilometres north of Iqaluit. Operator Baffinland Iron Mines runs its own port at Milne Inlet, another 100 kilometres north. The company has proposed replacing the road with a railway.

A March diamond evaluation gave CH-6 an average $149 per carat and CH-7 $114. But assuming 2.5% annual price increases, life-of-mine averages would come to $178 and $153 respectively, Peregrine stated.

CH-6 holds by far the largest resource, with an inferred 11.39 million carats compared with CH-7’s inferred 4.23 million. Both resources remain open at depth.

Anticipating the direction that pre-feas studies could take, company president/CEO Tom Peregoodoff spoke of “optimization studies of the Phase I mine, including the expansion of the CH-6 resource to depth and through the development of a potential Phase II resource expansion from the numerous other kimberlites on the property, of which six currently show economic potential.” Chidliak’s 564,396 hectares host 74 known kimberlites.

A few thousand sub-arctic kilometres away, the world’s third-largest diamond miner by value has put its on-again, off-again Jay pipe back on again. The Ekati mine’s most significant undeveloped deposit, the kimberlite holds a probable reserve of 78.6 million carats.

With two joint ventures in play, Ekati’s ownership gets a bit complicated. Dominion holds 88.9% of the Core zone, which hosts the current operation. Jay is located in the Buffer zone, 65.3%-held by Dominion. The new open pit would rely on Ekati’s existing infrastructure about 30 kilometres away, resulting in a total capex of US$647 million funded through existing loot and internal cash flow.

The project’s new feasibility reported Jay’s total post-tax NPV at US$398 million with a 15.6% IRR. Dominion’s share shows a post-tax NPV of US$278 million and a 16.7% IRR. Jay’s operations would run from 2022 to 2033, two years longer than envisioned by last year’s pre-feas, with ore processing continuing into 2034.

Jay would operate concurrently with the 10.1-million-carat-reserve Sable pipe, already under development, from 2021 to 2023. The current plan has Jay operating solo from 2024 to 2032. But the company intends to “pursue other incremental growth opportunities near our existing operations,” said CEO Brendan Bell.

Last month’s Ekati plant fire, however, forced Dominion to suspend operations on the Pigeon deposit. Mining and stockpiling continues at Ekati’s Misery open pit and Koala underground operations. Preliminary estimates call for about $25 million in plant repairs. Ekati’s 2017 guidance dropped from 5.6 million to 4.7 million carats.

Dominion also has a 40% stake in Diavik, the NWT’s other diamond producer, with Rio Tinto NYSE:RIO holding the rest. The mine’s fourth pipe, the 10-million-carat A-21, has production scheduled for H2 2018. Saying the company’s stock price doesn’t reflect the value of its assets, Dominion this week also announced a proposal to buy back around 7.2% of its issued and outstanding shares.

Meanwhile Canada’s next diamond mine—and the world’s biggest new diamond development—has production slated to begin this quarter. A 51%/49% JV of De Beers and Mountain Province Diamonds TSX:MPV, Gahcho Kué’s expected to average 4.5 million carats a year for 12 years.

Along with those three mines in the NWT’s Lac de Gras region and De Beers’ Victor mine in Ontario, Canada will gain a fifth operation with Stornoway Diamond’s (TSX:SWY) Renard project in Quebec. This one has production scheduled by year-end, bringing an average 1.8 million carats annually for the first 10 years of a 14-year lifespan.

Diavik diamond production surpasses 100 million carats

May 19th, 2016

by Greg Klein | May 19, 2016

Canada’s largest diamond mine reached a production milestone this week as Diavik passed the 100-million-carat mark. In operation since 2003, the project’s now a 60/40 joint venture of Rio Tinto NYSE:RIO and Dominion Diamond TSX:DDC, with Rio acting as operator. The company lauded “the teams who have helped make this happen safely and responsibly in some of the harshest operating conditions in the world.” The mine sits about 220 kilometres south of the Arctic Circle in the Northwest Territories’ Lac de Gras region.

Diavik diamond production surpasses 100 million carats

Despite “some of the harshest operating conditions in
the world,” Diavik continues to produce valuable gems.

Rio expects to bring a fourth pipe called A-21 online in H2 2018, spending US$350 million over a four-year period that began in 2014. A-21 would add a proven reserve of 10 million carats, helping extend Diavik’s lifespan to 2023.

The mine employs approximately 1,100 people, half of them living in the north and one-quarter aboriginal. Since 2003, operators have spent C$6.8 billion on goods and services, over 70% with local firms, many of them native-owned.

“Strong and respectful partnerships are at the heart of the way we work at Diavik and I would like to thank all of our investors, our community, business and government partners, and our workforce for their support over the past 13 years,” said Diavik president/COO Marc Cameron.

After De Beers suspended Snap Lake operations last December, the NWT was reduced to just two mines, Diavik and Dominion’s majority-held Ekati. Those two, however, produce enough diamonds to place Canada third in world production by value. Lac de Gras gains “the world’s largest new diamond mine” in H2 this year as Gahcho Kué begins production on a probable reserve totalling 55.5 million carats. A 51%/49% JV of De Beers and Mountain Province Diamonds TSX:MPV, the mine was 94% complete as of last week.

Creating nearly 40% of the territory’s GDP in 2014, diamond mining provides the NWT economy’s largest private sector contribution.

The Diavik discovery followed Chuck Fipke’s 1991 Ekati find, which set off the country’s biggest staking stampede since the Klondike. Matthew Hart’s Diamond: The History of a Cold-Blooded Love Affair recounts Diavik’s dramatic 1994 discovery by Eira Thomas, then a 24-year-old project manager for Dominion-predecessor Aber Resources.

Thomas now serves as president/CEO of Kaminak Gold TSXV:KAM, which last week announced a takeover bid by Goldcorp TSX:G valued at C$520 million.

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