Based on the positive results of a prefeasibility study,
The independent study by SRK Consulting indicates that 2.7 million carats of diamonds could be produced over the project’s 8-year mine life, based on a production rate of 300,000 tonnes per year.
Capital costs for the proposed open-pit operation are estimated at $40.3 million, including pre-stripping and infrastructure. The process plant is the largest cost item, at $13.8 million.
The study was based on a minable reserve of 2.3 million tonnes grading 1.13 carats per tonne, within a total geological resource of 6.5 million tonnes grading 0.82 carat per tonne. Diamonds from the Jericho pipe have been valued at US$65 per carat.
SRK has recommended that further resource definition work be carried out at the Jericho kimberlite, particularly at depth, in order to upgrade resources and define the geometry of the pipe between the 100- and 300-metre levels. This work will entail a 4-hole, 1,800-metre diamond drilling program. The results will be incorporated into a final feasibility study, scheduled for completion in the second quarter of 2000.
In the meantime, a 10,500-carat parcel of diamonds previously extracted from the Jericho pipe is being re-evaluated to provide updated valuations for the feasibility study.
SRK studied two options for the location of the proposed diamond plant: on site, or at the Lupin gold mine, 28 km to the southeast. Tahera favours the latter, as Lupin is connected by winter road to Yellowknife. The company has already secured an agreement with Lupin’s owners allowing it to construct and operate a production plant there.
Operating costs are expected to be $63 per tonne, and payback will take an estimated two years. The internal rate-of-return is pegged at 33.2%, based on gross revenue of $254 million and operating cash flow of $106 million.
On the environmental front, the permitting process is under way and a water licence application has been filed with the Nunavut Water Board, supported by a revised project proposal designed to meet the requirements of the Nunavut environmental review process.
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