BHP to go ahead with Koala (June 30, 2006)

Fresh from the start-up of underground mining at the Panda kimberlite on its Ekati diamond property in the Northwest Territories, BHP Billiton (BHP-N, BLT-L, BHP-A) has announced a production decision for an underground mine on the Koala kimberlite as well.

BHP will build an underground mine on Koala to produce about 900,000 carats annually, at a capital cost of US$250 million. Discoverers Charles Fipke and Stewart Blusson, who each own 10% of the project, will put up US$25 million each.

Koala, whose near-surface resource has already been mined by open pit, has a reserve figure (dating from 1997) of 2.8 million tonnes grading 1.63 carats per tonne. Feed from Koala will replace lower-grade ore from open pits and will amount to about 3,300 tonnes daily.