BHP to go ahead with Koala (July 10, 2006)

Fresh from the startup of underground mining at the Panda kimberlite on its Ekati diamond property in the Northwest Territories, BHP Billiton (BHP-N, BLT-L) 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.