Diavik on target

Vancouver — The construction of Canada’s second diamond mine remains on schedule to begin production in the first half of 2003.

Aber Diamond (ABZ-T) and London-based Rio Tinto (RTP-N) are over half-way through construction of their $1.3-billion Diavik diamond mine. Once in production, Aber expects the mine to produce an average of 7 million carats per year during the first half of the project’s 20-year span, representing more than 5%, by value, of the world’s diamond output.

Fourth quarter actvity came in within the planned capital cost budget, with expenditures hitting $135 million.During the quarter, the first dike, or water diversion structure, was completed around two diamond-bearing kimberlite pipes. About six million tonnes of rock was used to build the 3.9 km embankment, and completion of the structure’s internal waterproof concrete barrier would be completed in the summer.

The kimberlite processing plant is being built at a design rate of 5,000 tonnes per day, which means it will have the capacity to treat more than 1.8 million tonnes of ore annually.

The Diavik project lies 100 km north of the tree line in the Lac de Gras region, 300 km northeast of Yellowknife and 30 km southeast of the 3-year-old Ekati diamond mine of BHP Billiton (BHP-N). The joint-venture property covers 1,300 sq. km and adjoins the southeastern corner of Ekati’s outlying Buffer zone claims. The Misery pipe, the second kimberlite pipe being mined at neighbouring Ekati, is visible from Diavik property.

Diavik Diamond Mines, a wholly-owned subsidiary of Rio Tinto, is the operator and 60%-owner of the joint-venture project. Aber is funding its share of capital expenditures, thereby retaining the right to market its 40% share of diamond production. The Diavik property is subject to aggregate royalties of 2% split between diamond expert Christopher Jennings and Repadre Capital (RPD-T).

Four high-grade kimberlite pipes — A-154 South, A-154 North, A-418 and A-21 — are the focus of mine development plans. The pipes lie immediately offshore of the 20-sq.-km East Island in Lac de Gras, a 100-km-long lake. Together the four pipes contain measured, indicated and inferred resources totalling 37.6 million tonnes grading 3.7 carats per tonne, equivalent to 138.1 million carats, to a depth of 420 metres.