Diavik feasibility study progress
Aber Resources Ltd ABZ
Shares issued 45,502,883 Aug 18 close $10.50
Wed 19 Aug 98 News Release
Mr. Kenneth Hanna reports
The Diavik diamonds project feasibility study scheduled to be completed in
fourth quarter 1998 is on time and on budget. The Diavik project is 300
kilometres northeast of Yellowknife and 35 kilometres southeast of the
BHP/Ekati diamond mine. The feasibility study and associated engineering
and environmental assessment work is budgeted at $30-million.
Resource Estimates
The resource estimate to the 400-metre depth level has increased by 10
million carats from 123 million carats to 133 million carats. The table
below summarizes updated total estimated resources.
Kimberlite Pipe Name
--------------------
Total Revised Resource Total
Tonnes Est. Carats
(000s) (Grade ct/t) (millions)
------------- ------------ ----------
A418
9,000 3.7 33
A154S
12,000 4.8 57
A154N
11,500 2.4 28
A21
4,900 3.0 15
Total/Average
37,400 3.5 133
The most important change to the resource is the change in the estimated
grade in the upper 100 metres of the A154S resource. As a result of
additional large diameter core drilling the upper 90 metres of the A154S
resource has increased from 3.2 million tonnes grading 4.4 carats/tonne to
3.2 million tonnes grading 5.2 carats/tonne, an 18 per cent increase in
grade for this part of the pipe. The resource model and estimate has been
revised to incorporate additional geotechnical drilling information from
the 1998 winter season, additional large diameter core from the upper part
of A154S and a re-crush of A154N kimberlite.
The other overall changes to the resource estimate include a 5 per cent
increase in tonnage and a 4 per cent increase in grade for A154S, a 26 per
cent increase in the grade for A154N and an 11 per cent decrease in tonnage
and an 8 per cent increase in grade for A21. The classification of the
resources into measured, indicated and inferred categories has not been
updated and will be completed during the feasibility study.
Reserve Estimates
Updated reserve figures using the updated resources will be completed with
the revised estimates of capital and operating costs and other factors
being assessed in the feasibility study. The estimated proven and probable
reserves from the prefeasibility are 26.7 million tonnes grading 3.9
carats/tonne undiluted. Diluted reserves are estimated to be 27.7 million
tonnes at an average grade of 3.7 carats/tonne.
The estimated reserves are based on prefeasibility level estimates of
capital and operating costs, economic mining, metallurgical, legal,
environmental, social and government factors which have been assessed to a
prefeasibility level.
Valuations
June 1998 valuations on the A154S and A418 diamonds by 12 diamantaires
confirmed the earlier price estimates for A154S at $63 (U.S.) and for A418
at $56 (U.S.). The diamantaires were selected for their expertise in
specific segments of the diamond market. Marketing costs were not assessed
in the valuations.
The average diamond price estimate of $56 (U.S.) per carat for all pipes
(an average weighted by the mineable carats in each pipe) was used in the
prefeasibility level reserve estimate. The 1997 diamond price estimates for
the A418 and A154S kimberlite pipes were obtained by independent Antwerp
diamantaires, through the valuation of 21,075 carats of diamonds from bulk
samples. Price estimates for A154N and A21 kimberlite pipes were obtained
by valuation of small parcels of diamonds from large diameter core drilling
by Argyle Diamonds.
Mine Plan and Processing
The feasibility study is examining mining and processing rates from 1.5 to
1.9 million tonnes of ore per year with consideration to the improved
grades in the upper portion of A154S and other factors including revised
capital and operating cost estimates. At full open pit production the
operation would produce 6 to 8 million carats per year reducing to 3 to 4
million carats per year beyond year 15. The potential mine life is 16 to 22
years.
Anticipated Timetable
The Diavik diamonds project description that commenced the environmental
assessment process was filed on March 6, 1998. The project is being
reviewed through a comprehensive study process under the Canadian
Environmental Assessment Act. The feasibility study is on schedule for
completion in fourth quarter 1998 and is now approximately 80 per cent
completed.
The anticipated timetable at the prefeasibility study level included an
early mobilization of equipment and supplies in February 1999 with a
production target in 2001 or 2002. As a result of work completed during the
feasibility study it is now anticipated that mobilization would not be
required until first quarter 2000 to achieve a production target of the
second quarter 2002. This schedule will be further refined during the
feasibility study.
Aber holds a 40 per cent interest in the Diavik joint venture and retains
the right to market its 40 per cent share of diamond production. |
