Kimberlite find at Jericho yields few stones

A new kimberlite discovery at the wholly owned Jericho project of Tahera (TAH-T) has yielded just two stones from the initial processing of 100.4 kg of drill core.

The kimberlite was discovered this past spring under a small lake, 6 km west of the Jericho pipe. A pair of holes tested the kimberlite body. About 50 kg of kimberlite was selected from each hole for initial microdiamond testing at the company’s laboratory in North Vancouver. Only two diamonds were recovered, including a macro measuring greater than 1 mm in two dimensions. Additional kimberlite samples from the two holes will be submitted for further testing.

Tahera is focused on advancing the Jericho project to commercial production. Early this year, Tahera submitted a revised project proposal and draft environmental impact statement (EIS) for a combined open-pit and underground mine on the land-based Jericho pipe, along with a 1,200-tonne-per-day processing plant.

A June 2000 feasibility study by SRK Consulting concluded that such an operation could produce an estimated 3 million carats over an 8-year mine life. The study was based on a probable mining reserve of 2.5 million tonnes grading 1.19 carats per tonne. The initial 2 million tonnes of reserves will be mined by open-pit methods, followed by underground mining of the remainder. The pipe’s total resource comes in at 7.1 million tonnes grading 0.84 carat per tonne.

The draft EIS is a comprehensive study that assesses the environmental and socio-economic impact of the proposed mine. The study consists of reports on: environmental impact assessments; environmental management; reclamation; spill prevention; occupational health and safety; community consultations; mine waste and water management; waste rock studies; characterization of kimberlite; tailings geochemistry; heritage studies; and socio-economic studies.

Tahera was required to distribute the draft EIS and project proposal to 28 organizations consisting of regulators, local Inuit and special interest groups. In addition, Tahera submitted land-lease applications to the Kitikmeot Inuit Association and the Department of Indian Affairs and Northern Development. The company was also required to submit a water permit application to the Nunavut Water Board, a navigable waters protection application to the Canadian Coast Guard, and an application to the Department of Fisheries and Oceans.

Financing

Tahera remains optimistic it will receive regulatory approval during the third quarter of 2001, which would put the project on a time frame for startup in 2003. In conjunction with its permitting efforts, the company is pursuing various alternatives to finance construction of the Jericho mine. The feasibility study estimated the project’s capital costs at $55 million, including $10 million to buy a diamond processing plant and $8 million for underground development in 2006.

The Jericho project lies 430 km northeast of Yellowknife.

In related news, exploration drilling on Tahera’s joint-venture Rockinghorse property, 120 km northeast of Jericho, has uncovered a shallow dipping kimberlite sill. Kennecott Canada Exploration cut the sill, dubbed Amaruq, with eight widely spaced holes over an area measuring 1,400 by 600 metres. The sill varies in width between 0.1 and 2.5 metres. Microdiamond testing will be performed at Kennecott’s lab in Thunder Bay, Ont. Results are expected in July.

Under a revised joint-venture agreement, Kennecott, a division of Rio Tinto (RTP-N), can earn an initial 25% interest in the Rockinghorse and Hood River properties by making expenditures totalling $25 million by 2008. Kennecott can boost its interest to 62.5% by proceeding to production. The company has spent more than $18 million to date on exploration and has budgeted a further $2.2 million for 2001.

Exploration will resume on the Rockinghorse property in July following spring break-up. Further drilling is planned.