Underground sampling begins at Snap Lake

In hopes of starting production as early as 2002, Winspear Resources (WSP-V) has launched an exploration program that will form the backbone of a feasibility study for the Snap Lake diamond project, 220 km northeast of Yellowknife, N.W.T.

Snap Lake is part of the Camsell Lake joint venture, held 68% by Winspear and 32% by Aber Resources (ABZ-T). It currently hosts a global resource of about 20 million tonnes with an implied grade of 1.7 carats per tonne (based on 1999 bulk sampling) at an average value of US$105 per carat.

This year’s program will include a 20,000-tonne underground bulk sample, drilling to upgrade resources to indicated from inferred, and tests for additional resources. The work will entail development of a 600-metre drive in kimberlite 120 metres below Snap Lake and the collection of a large bulk sample. Results of this work will be included in a final feasibility study, along with geological, geotechnical and hydrogeological data for mine-planning purposes.

Mine planning at Snap Lake is currently based on a scoping study completed by MRDI Canada, which outlined a $241-million, open-pit/ underground mine that would operate for at least a decade. It is expected to provide a 44% internal rate-of-return, with payback of about 3.6 years. The operation could have a longer life. This study is based on a resource of 8.7 million tonnes at an assumed head grade of 1.6 carats per tonne. A 10,000-metre drill program will be launched this month to test the downdip extension of the dykes in the southeastern arm of Snap Lake. If successful, the resource could be greatly expanded.

Winspear also plans to complete a geophysical survey and till-sampling to follow up on anomalous indicator minerals.

The diamonds found at Snap Lake are hosted in kimberlite dykes, rather than the kimberlite pipes at the Ekati mine, near Lac de Gras. The scoping study projects that the more-than-2-metre-thick deposit should be minable (using underground room-and-pillar methods) within a 10% dilution factor.

Production would begin at about 1,000 tonnes per day, rising to 3,000 tonnes by 2005. Annual output is expected to increase from 560,000 carats to 1.68 million carats, but at lower-per-unit costs. Operating costs for open-pit and underground operations are expected to average US$47.68 per tonne over the 10-year mine life.