Partial microdiamond results from core drilling on the Rockinghorse joint venture in the Coronation Gulf district of Nunavut continue to demonstrate the potential of the Anuri kimberlite.
Operator Kennecott Canada Exploration can earn up to a 62.5% interest from
The Anuri kimberlite was discovered in 2001 in the shallow waters of Tak Bay on Napaktulik Lake. It consists of two distinct units, an east and a west lobe, which coalesce in the upper regions. The kimberlite, which has a surface expression measuring 325 by 150 metres, was intercepted by drilling to a depth exceeding 200 metres. “It’s over 25 million tonnes,” said Tahera President Joseph Gutnick during a presentation earlier this year at the convention of the Prospectors & Developers Association of Canada in Toronto.
The west side, which shows much higher-grade potential than the east lobe, contains about 15 million tonnes. In 2001-2002, the Anuri kimberlite was tested with seven holes. Caustic fusion was then applied to almost 1,500 kg of sampled core, resulting in the recovery of 1,648 microdiamonds, including 14 that exceeded a 1-mm square mesh. The largest diamond weighed an impressive 0.79 carat.
Based on the initial microdiamond results, Gutnick is confident the grade of the kimberlite will be at least 1 carat per tonne.
In March 2003, Kennecott drilled four more holes into the west lobe and extracted 2,600 kg (or 2.6 tonnes) of additional kimberlite samples. “Kennecott considered various scenarios for further sampling of Anuri,” Grant Ewing, Tahera’s vice-president of corporate development, told The Northern Miner. “Normally a 2.6-tonne sample is quite large and wouldn’t be performed by caustic fusion, but in this case, Kennecott wanted to get more microdiamond data, as well as to try to recover a sample that would give a preliminary grade indication for the west side of Anuri.”
About 1,173 kg have been partially processed, resulting in 1,120 microdiamonds. Of those, 18 exceed a 1-mm square mesh. Eleven of the diamonds fall in the 1.18-to-1.7-mm square-mesh sieve category, and two were captured on a 1.7-mm sieve.
The Anuri kimberlite consists of greenish-grey, matrix-supported microbreccia containing abundant country rock xenoliths, indicator minerals and mantle nodules. The matrix is predominantly fine-grained serpentine and disaggregated country rock, with xenocrysts. Indicator minerals observed in the core include pyrope garnet, eclogitic garnet, chrome diopside, ilmenite and olivine, with clinopyroxene and olivine dominating.
The Anuri pipe comprises a relatively large, steep-sided, highly diamondiferous kimberlite intrusion explosively excavated into Archean rocks, capped by Paleozoic sediments and 30 metres of glacial overburden within the Slave Structural province. Anuri is infilled with fragmental volcaniclastic kimberlite to a known depth of at least 175 metres. Hypabyssal kimberlite has been intersected beneath the volcaniclastic infill on the eastern lobe of Anuri and possibly represents a feeder source or root zone.
Tahera will decide on the next stage of evaluation sometime in the third quarter, after all microdiamond results have been received and assessed.
Jericho
Meanwhile, a further 120 km to the southeast, the company is advancing its wholly owned Jericho project towards a production decision. In January, Tahera submitted a final environmental impact study (EIS) for review. The Nunavut Impact Review Board postponed the final public hearings, originally scheduled for the last week of May, to ensure that all relevant environmental and socio-economic issues pertaining to the project have been addressed.
To facilitate the EIS review process, Tahera has organized a series of meetings with various regulatory groups seeking information about the project. In their requests for information, many reviewers have focused on water quality and the design of the processed kimberlite containment area. Tahera expects the public hearings could be rescheduled as early as September. Negotiations concerning an Inuit impact benefit agreement with the Kitikmeot Inuit Association are under way.
A 2000 feasibility study by SRK Consulting concluded that a small open-pit operation on the land-based Jericho kimberlite pipe, followed by underground mining, would be capable of producing 3.1 million carats over a mine life of eight years. The study was recently updated to reflect current market conditions.
The Jericho project covers 2,300 sq. km along the northwestern and northeastern shores of Contwoyto Lake, 26 km north of the Lupin gold mine and 430 km north of Yellowknife. Six kimberlite bodies have been found on the Jericho properties to date, including the Jericho pipe, a 300-metre-long elliptical body that is up to 100 metres wide. The kimberlite, with a straight, nearly vertical eastern wall and three lobes on the west side, has been defined to a depth of 350 metres by 133 drill holes totalling 28,000 metres. The pipe contains five main facies and is interpreted to have formed from multiple emplacement phases, with each event involving a kimberlite of different composition, including a precursor dyke and three major intrusive phases.
Jericho contains an indicated and inferred kimberlite resource of 7.1 million tonnes averaging 0.84 carat per tonne, equivalent to almost 6 million carats.
Underground bulk sampling was carried out in 1996. A 787-metre-long decline, driven to a depth of 75 metres below surface, was used to extract 14,555 tonnes of kimberlite, representing three main phases of the Jericho pipe. In total, 10,539 carats of diamonds at a cutoff grade of 1 mm were recovered from 9,435 tonnes of processed kimberlite. Several large carat stones were recovered, including 44 diamonds in the 5-to-10-carat range, as well as 23 stones larger than 10 carats each. The largest gem-quality diamond weighed 23.89 carats, whereas the biggest stone was 40 carats.
The proposed mine plan entails seasonal open-pit mining of 2 million tonnes of kimberlite grading 1.23 carats per tonne (equivalent to 2.4 million carats) for the first four years, followed by two years of underground mining of some 615,000 tonnes grading 1.09 carats per tonne, or 673,000 carats, from the central lobe. The final two years of operation will involve only the processing of stockpile ore. Minable reserves total 2.6 million tonnes of kimberlite grading 1.2 carats per tonne, equivalent to 3.1 million recoverable carats.
Central lobe
About 80% of the minable reserve is derived from the higher-grade, central lobe, which contains a probable reserve of 2.1 million tonnes grading 1.31 carats per tonne. Some 520,000 tonnes grading 0.75 carat per tonne will be mined from the northern lobe and processed at the end of the mine life. As part of the mine plan, 1.6 million tonnes of inferred resource in the southern and northern lobes of the pipe will be mined and stockpiled for possible processing.
The ultimate pit will measure 350 by 400 metres in size and cover an area of about 10 hectares. The overall stripping ratio is 8.4-to-1. Crews will be able to gain access to underground reserves via a decline in the open pit. A combination of sub-level caving and open-bench underground mining methods is proposed.
The kimberlite will be processed on site using conventional diamond recovery techniques in a 50-tonne-per-hour (330,000-tonne-per-year) plant, which will be constructed 1 km from the Jericho kimberlite and operate year round. Fine tailings, representing about 10-15% of the waste materials generated during kimberlite ore processing, will be pumped to a tailings containment in Long Lake, southwest of the plant. The coarse kimberlite rejec
ts account for 85-90% of the processing waste and will be stockpiled adjacent to the plant for reclamation use.
Geochemical test results indicate that both size fractions have a low potential for acid generation and metal leaching. The fine tailings supernatant is expected to have a slightly alkaline ph (measure of hydrogen ion concentration), and may have slightly elevated levels of ammonia. Runoff from the coarse tailings piles is expected to be similar.
Waste rock
Almost 13 million tonnes of waste rock will be extracted during the 4-year open-pit operation, plus 57,000 tonnes in the first year of underground mining. The waste rock will either be placed in one of two waste rock dumps adjacent to the open pit, or used for construction of the tailings dam and roads. The waste rock consists of granitic rock, with negligible amounts of carbonate and sulphide. Results of geochemical testing indicate the waste rock is non-acid-generating, with a low potential for release of soluble metals.
In preparing the updated feasibility study, SRK Consulting received assistance from mining contractor Nuna Logistics, Dowding Reynard & Associates (DRA), which has experience in the design and construction of diamond plants, and valuator WWW International Diamond Consultants.
Revised capital cost estimates now total $65.4 million, representing a 19% increase over the original 2000 study.
Capital costs for the open-pit operation alone are estimated at $52.7 million, including $4.8 million in contingency. Operating costs in the updated study are projected to be $56 per carat, 11% higher than in the 2000 study.
SRK assumed a diamond value of US$81 per carat (compared with WWW’s modeled valuation of US$92 per carat), which translates into a pretax internal rate of return (IRR) of 32.7%. Achieving the WWW modeled diamond valuation would improve the pretax IRR to 43.6%.
In March 2003, Tahera announced it had entered into a collaboration and strategic alliance with
Lazare Kaplan will assist Tahera with project financing and has agreed to invest up to $4 million to acquire a 10% stake in the company, subject to Tahera’s securing the balance of funding. At anytime during the life of the Jericho project, Tahera will have the option of increasing sales revenue by converting the offtake agreement with Lazare Kaplan into a rough diamond marketing agreement. In addition, Tahera will have the right to participate as an equal partner in the polishing of diamonds produced by Jericho, including special stones.
During a spring drilling on the Jericho properties, 12 holes, totalling 422 metres, tested various lake-based targets without intersecting any new kimberlites. The company is planning a comprehensive summer program.
With 332 million shares outstanding, or 456 million fully diluted, Tahera has arranged a $2-million flow-through financing consisting of 14.3 million additional shares priced at 14 apiece to fund further exploration.
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