De Beers Canada
has taken a big step towards developing what will be its third Canadian diamond mine after securing key approvals for the Northwest Territories project from the government of Canada.
“This is a significant milestone,’’ said Cathie Bolstad, director of external affairs with De Beers Canada, which is hoping to build the Gahcho Kue diamond mine in a joint venture with Mountain Province Diamonds
, Stock Forum
The proposed open pit mine is located on a site, owned 51% by De Beers and 49% by Mountain Province, which is located about 280 kilometres northeast of Yellowknife, N.W.T.
Once in production it will be added to a roster of De Beers’ Canadian diamond mines that includes Snap Lake (Northwest Territories) and Victor (northern Ontario). It will also be the fourth diamond mine to be developed in the Northwest Territories since prospector Charles Fipke announced the discovery of the Ekati mine back in 1991.
However, in an interview with Stockhouse, Bolstad was unable to say exactly when the first diamonds would be mined from Gahcho Kue.
She said De Beers has achieved a significant milestone after the Canadian government approved development of the mine as recommended by the Mackenzie Valley Environmental Impact Review Board.
Mountain Province CEO Patrick Evans described the environmental review as among the “most comprehensive” for any mining project in the N.W.T. "Through this process, consultation with stakeholders has been extensive,’’ he said in a press release.
With estimated annual production of 4.5 million carats annually over an 11-year mine life, Gahcho Kue will rank as the largest of De Beers' Canadian diamond mines.
In 2012, De Beers produced 1.56 million carats from its Canadian mines, including 870,000 carats from Snap Lake and 690,000 carats from Victor.
Armed with Canadian government approvals for the environment review, the joint venture can now apply for land use permits and a water license, permits that are needed before construction can begin.
De Beers is estimating that Gahcho Kue will employ 700 people during the 2-year construction phase and 400 during the operational phase.
The joint venture is currently reassessing the mine development plan to determine the optimal development schedule.
Results of an updated feasibility study and an “optimization study” are expected to be announced early in 2014, Mountain Province said.
Mountain Province shares rose 0.80% to $5.06 Tuesday, leaving a market cap of $476.5 million based on 94.2 million shares outstanding. The 52-week range is $5.87 and $3.40.