After posting it on Stockhouse's diamond forum, thought I should also share this information with SI members. In the event some of you don't pick it up....frank
Delay in approvals raises De Beers' mine costs
$140M more to build mine
David Finlayson
The Edmonton Journal
EDMONTON - Missing a vital winter-road window will delay construction of De Beers' Snap Lake diamond mine and help push costs $140-million over estimates.
The underground mine, 220 kilometres northeast of Yellowknife, will not receive the necessary approvals in time to make the 2003 ice-road season, De Beers Canada vice-president John McConnell said.
The winter road from Yellowknife -- open from February to April-- is the only way to get supplies and equipment to the mine site.
De Beers Canada president Richard Molyneux said last February he hoped to have the approvals by this fall, with production starting in mid-2004 after 15 months of construction.
The cost estimate at that time was $260-million. It is now $400-million, with production is not slated to start until late 2005, Mr. McConnell said.
Last year's "optimistic" schedule and cost was made when De Beers had just bought the property and was still feeling its way around, he said.
"We're happy with the way things are going. We would have liked to have made that winter road, but we'll still be able to do underground pre-production."
The length of the approval process is difficult to predict, said Mr. McConnell.
"It involves a lot of consultation along the way. It's the process that's been set up and we're following it."
De Beers filed its first water and land-use application last spring with the Mackenzie Valley Land and Water Board. Environmental assessments and public hearings will be held this year.
A participation agreement with the Dogrib Treaty 11 tribal council, that will include training, jobs and business opportunities, is expected to be signed in April.
De Beers bought the Snap Lake asset by acquiring Winspear Diamonds Inc. for $305-million and buying a 32% share owned by Aber Resources Corp. for $173-million.
The first plans called for a pit mine to make money while the underground mine was being built. But it would have faced even tougher environmental scrutiny.
Mr. McConnell said an underground mine will avoid the big waste-rock piles of a pit project. About 50% of the tailings will be put back underground.
About 450 people will be employed during peak construction, and 525 workers will be needed to produce the diamonds.
It will be Canada's third diamond mine. The Ekati mine at Lac de Gras, about 300 km northeast of Yellowknife, has been producing gems for two years. The nearby Diavik mine will start production next year.
Snap Lake will produce 3,000 tonnes of ore a day, and De Beers forecasts a yield of 1.6 carats per tonne at a value of US$100 per carat. That would mean a greater carat-per-tonne rate than Ekati's, but lower value per carat. |
