The environmental impact statement for the Jericho diamond project of
The review board will release its terms and conditions in the coming weeks. Tahera hopes to wrap up permitting and financing by mid-2004, followed by a 1-year construction phase, which could see Jericho up and running as early as 2005. An impact benefits agreement has been reached in principal with the Kitikmeot Inuit Association of Nunavut.
Jericho is a small open pit and underground mining project centred on a lone land-based pipe that is expected to produce 3.1 million carats over a life of at least eight years. The wholly owned project covers 2,300 sq. km in Nunavut, 240 km north of Yellowknife and 26 km north of the Lupin gold mine.
Jericho is a 300-metre-long elliptical pipe, and measures up to 100 metres wide. It is defined to a depth of 350 metres by 133 drill holes totalling 28,000 metres. The multi-phase pipe contains an indicated and inferred kimberlite resource of 7.1 million tonnes averaging 0.84 carat per tonne, equivalent to almost 6 million carats. Of that amount, 2.6 million tonnes grading 1.2 carats per tonne are minable.
The original feasibility study was carried out by SRK Consulting in 2002; it was updated in June 2003 to reflect current market conditions in preparation for financing.
The proposed mining plan entails seasonal open-pit mining of 2 million tonnes of kimberlite grading 1.23 carats per tonne (equivalent to 2.4 million carats) over the first four years. This is to be 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 the operation will involve only the processing of stockpiled ore.
About 80% of the minable reserve is derived from the higher-grade, central lobe. As part of the mine plan, some 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 have an overall stripping ratio of 8.4-to-1. Crews will 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. The facility will be built 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 compound in Long Lake, southwest of the plant. The coarse kimberlite rejects account for 85-90% of the processing waste and will be stockpiled adjacent to the plant for reclamation use in the future.
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.
Approximately 12.9 million tonnes of waste rock will be mined during the 4-year open-pit operation, as well as 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 granite, with negligible amounts of carbonate and sulphide. Results of geochemical testing indicate the waste rock is non-acid generating and unlikely to release soluble metals.
The capital cost of the open-pit operation alone is pegged at $52.7 million, including $4.8 million in contingency. It will cost a further $12.7 million to go underground. Operating costs over the entire mine life are projected at $56 per carat. SKK assumed a diamond value of US$81 per carat, compared with a US$92-per-carat modeled value by WWW International Diamond Consultants.
In March 2003, Tahera announced, to much fanfare, that it had entered into an arrangement with Lazare Kaplan International, including a proposed offtake agreement on a portion of the Jericho production. That letter-of-intent deal expired on Sept. 30, 2003. Tahera’s former president, CEO and chairman, Joseph Gutnick, resigned shortly thereafter to pursue other interests, and was replaced by Peter Gillin, an investment banker.
The Jericho kimberlite is one of seven kimberlite bodies that have been found on the Jericho project claims. This past summer, eight targets were drilled, resulting in the discovery of a diamond-bearing kimberlite dyke in the Bird Lake area, 9 km south of the Jericho pipe. The steeply dipping dyke has an inferred width of 0.6-1 metre based on six drill hits in a 20-metre-long confined area. A 7.6-kg sample returned five microdiamonds. Regional exploration activities included the collection of about 450 till samples. The results will be used direct 2004 activities at Jericho.
Tahera’s other significant asset is a 75% interest in the Rockinghorse project in the Coronation Bay area of Nunavut, a further 120 km northwest of Jericho.
The project is a joint venture with
The Anuri kimberlite was discovered in 2001 in the shallow waters of Napaktulik Lake. It consists of two distinct units, an east and west lobe, which coalesce in the upper regions. The kimberlite has a surface expression measuring 250 by 150 metres and has been intercepted in drilling to a depth exceeding 200 metres. In 2001-2002, the Anuri kimberlite was tested with seven holes. Caustic fusion analysis recovered 1,698 microdiamonds from almost 1,500 kg of sampled core, including 13 stones exceeding a 1-mm square-mesh size. The largest diamond weighed 0.79 carat.
Based on the initial diamond results, Kennecott Canada Exploration drilled four more holes to test the higher-grade potential of the west lobe, and extracted 2,489 kg of sample. In total, 4,029 microdiamonds were recovered, including 30 stones larger than the 1-mm sieve size. A more detailed look at the diamond distribution is provided in the accompanying table.
A 0.98-carat parcel of diamonds above a 0.85-mm size cutoff was recovered from the 2.5-tonne sample, for a preliminary grade of 0.39 carat per tonne.
Tahera is planning a 2004 exploration program on the Rockinghorse project, including further delineation drilling on Anuri, target generation and exploration drilling.
The company has $13 million in cash, with 439 million shares outstanding, or 547 million on a fully diluted basis.
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