Mountain Province

De Beers Canada is Mountain Province’s Joint Venture partner and the operator of the Gahcho Kué project. Gahcho Kué is currently in the advanced exploration and permitting phases of the project’s development.
Click here to view 2005 Project Description
Click here to view 2003 Technical Study

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To read a plain language description from De Beers on their plans for developing the Gahcho Kué project. Click here.

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The 2003 study, completed in June of that year, used the 2000 Desktop Study (updated in 2002) as a starting point to investigate development of the Gahcho Kué project by open pit mining with a base case of initial production at the end of 2010 and ramp-up to full production by mid-2012. This study was designed to provide data to support an application for a Class A water License and Land Use Permit. All design data that would affect the Class A License application, such as water management, waste disposal, mining development and waste storage were developed at a level of design approaching a Class II Feasibility. The balance of the study was performed at a Class I level. As a substantial portion of the resource remains in the inferred resource category, the Technical Study cannot be published as an economic (feasibility) study. Nonetheless, the study confirmed that there was sufficient confidence in the economic prospects of the project to warrant proceeding to the permitting and bulk sampling phases.

In July 2005, Mountain Province appointed Roscoe Postle and Associates (RPA) to review the AMEC Technical Study. The results of this review are the subject of continuing discussions on the Joint Venture Management Committee.

In November 2005, the Joint Venture submitted applications to the Mackenzie Valley Land and Water Board for permits to construct and operate a mine at Gahcho Kué. This application is a significant milestone for the Gahcho Kué Joint Venture. It moves the project from the exploration to development phase of the mining process. Obtaining the permit is expected to take between 24 and 36 months, based on the typical experience for a diamond mine in the Northwest Territories.

In July 2005 a budget of C$38.5 million was approved to progress the project through the Advanced Exploration and Permitting phases. In early 2006 De Beers drilled 25 of 31 planned core holes. In addition, De Beers had planned to drill five large diameter (LDD) holes: three in the north lobe of the 5034 kimberlite pipe and two in the Tuzo kimberlite pipe. Unfortunately, the LDD program was unsuccessful. Results from the winter core drilling are expected to be available by the fall of 2006.

Additional test work planned for 2006 includes water treatment testing and ore dressing studies for ore processing engineering and design. Environmental baseline inventory covering wildlife, fisheries, hydrology, water quality, air quality and vegetation studies will continue in 2006 to support the information requirements of an environmental impact assessment. Socio-economic baseline data collection will continue and traditional knowledge studies will also take place along with continued community consultations.

In early 2006, Mountain Province appointed WWW International Diamond Consultants to provide an independent valuation of the Gahcho Kué diamonds and projection of future diamond prices. The results of the independent valuation were released in mid-2006. The results are contained in the table below.

Pipe and Zone	US$/carat	Total Carats	Total Dollars (US$)
5034 E_LOBE	133	1,052	139,987
5034 C_LOBE	80<	545	43,714
5034 W_LOBE	79	1,003	79,275
5034 Total	101	2,600	262,977
HEARNE	54	2,508	135,256
Tuzo mix of east and west	43	529	22,600
TOTAL	75	5,637	420,832

WWW also noted that the diamonds presented by De Beers had not been thoroughly cleaned. Subsequent to the WWW valuation, one packet of 389 carats was returned to De Beers for cleaning. Following cleaning, these diamonds were valued by three other diamond companies selected by WWW to serve as a comparison to the WWW valuation and also to monitor the effect of the cleaning. All three independent valuations of the parcel were higher than WWW's original pre-cleaning valuation. Based on this, WWW believes that the average value for the whole parcel of Gahcho Kué diamonds would increase by as much as 10% if properly cleaned. This would increase the average value of the 5034 diamonds to more than US$110 per carat and the average value for all three pipes to more than US$83 per carat.

In mid-2006, the Joint Venture embarked on a summer core drilling campaign. The purpose of the drill campaign was to complete four core drill holes that were not completed during the 2005/06 advanced exploration winter program.

Two core drill holes were sunk into the Tuzo kimberlite pipe and one drill hole into the North Lobe of the 5034 kimberlite pipe. Two of the Tuzo drill holes were for mid-and-deep-level delineation purposes and a third core hole was drilled for geotechnical purposes.

Following early positive results the scope of the summer drill campaign was widened to include two additional core holes. These holes were drilled to increase confidence in the Tuzo pipe margins intersected kimberlite earlier than expected.

The impact of these holes on the Tuzo geological model will be assessed once all logging has been completed. A new geological model of Tuzo is currently being developed based on the new data from the summer drill program. In addition, micro-diamond results from the Tuzo and 5034 North Lobe will enable to Joint Venture to increase its confidence in the grade modelling for the two pipes. Results are expected by early 2007.