Aber releases Diavik diamond mine progress overview
Aber Diamond Corp ABZ
Shares issued 54,591,920 Jan 17 2003 close $ 29.65
Friday January 17 2003 News Release
An anonymous director reports
DIAVIK DIAMONDS PROJECT UPDATE
Construction of the Diavik diamond mine at Lac de Gras is nearing completion within project schedule and budget.
Overburden removal from the Diavik A154 open pit mine proceeded satisfactorily during the fourth quarter. Commissioning trials of the processing and recovery plants recommenced during the last week of November and continued during the month of December on an intermittent basis on low-grade mineralization taken from the contact zones at the top of the A154 South ore body. Operating rates continued to ramp up, in line with planned levels during December, as increasing quantities of feed become available to the processing plant.
As diamonds have been recovered at the Lac de Gras operations, they were forwarded to the Diavik production splitting facility in Yellowknife for cleaning and preparation for valuation for royalty purposes. A limited quantity of the diamonds recovered during December underwent valuation for government of Canada royalty purposes and are expected to be forwarded to the joint venture participants, DDMI and Aber Diamond by the end of January.
Diavik Diamond Mines has become a signatory of the Canadian Voluntary Code of Conduct for Authenticating Canadian Diamonds. The implementation of the Kimberley process by the Canadian government commenced Jan. 1, 2003. Under the Kimberley process, the government of Canada certifies that diamonds exported from Canada do not contain conflict diamonds as recognized in the United Nations General Assembly Resolution 55/56 (2000). The Kimberley process will further reinforce DDMI's ability to certify the Canadian origin of its diamonds.
Cumulative project expenditures to Dec. 31 were $1.217-billion (Canadian). Forecast project costs continue to be within budget with an expected cost of $1.25-billion (Canadian) following completion.
Health, safety and environment
DDMI is in compliance with all permits and licences. There were no lost time injuries during the fourth quarter. Safety performance is expressed in terms of the lost time injury frequency rate (LTIFR) -- the rate of occurrence of lost time injuries per 200,000 hours of work. DDMI experienced a zero-LTIFR during the quarter and an LTIFR of 0.38 for the full year 2002. As of year-end, workers on the project had achieved 1.3 million hours of injury free work.
Employment, business opportunities and training
The total on-site work force peaked at approximately 800 workers during the quarter. Northern participation to date during the multiyear construction phase of the project is approximately 44 per cent.
As part of DDMI's continued efforts to provide business and employment opportunities to the North, DDMI has awarded mining operations contracts to a number of aboriginal and northern companies including Denesoline Western Explosives (explosive), Exploration Medical Services (medical services), G&G Expediting (offsite logistics), Tli Cho Logistics (site services), Kingland Ford Sales Ltd. (light vehicle maintenance), I&D Management Services Ltd. (mine equipment operators), SecureCheck (security services), Fountain Tire Mine Services Ltd. (tire management), A&A Technical Services (geochem), Ollerhead & Associates Ltd. (land survey), RTL Robinson Enterprises (trucking services) and Tli Cho Landtran (trucking services).
In December, DDMI announced a training partnership with global engineering firm Hatch Associates. Under the new Young Engineers for Tomorrow program, DDMI and Hatch Associates will encourage and support northerners to pursue professional engineering careers. Students who qualify will be eligible for financial support at selected Canadian universities offering co-op engineering programs. While working toward engineering degree certification, participants will have the opportunity to gain relevant work experience and exposure in various works settings at Diavik and within Hatch's organization across Canada.
The Diavik diamonds project is an unincorporated joint venture between Diavik Diamond Mines (60 per cent) and Aber Diamond Mines (40 per cent). Both companies are headquartered in Yellowknife. DDMI is a wholly owned subsidiary of Rio Tinto PLC of London, England, and Aber Diamond Mines is a wholly owned subsidiary of Aber Diamond Corp. of Toronto, Ont. For further information see the attached backgrounder.
Diavik diamonds project -- backgrounder
Project owners
The Diavik diamonds project is an unincorporated joint venture between Diavik Diamond Mines and Aber Diamond Mines. The two joint venture participants retain the right to market independently their respective share of the diamonds to be produced from the Diavik diamond mine. DDMI is the manager of the project.
Diavik at a glance:
estimated diluted minable reserves -- 27.1 million tonnes at 3.9 carats per tonne (diluted) from four ore bodies called A154S, A154N, A418 and A21;
ore production -- 1.5 million tonnes annually;
annual diamond production -- peaks at approximately seven million carats;
mine life -- 20 years;
project capital cost -- $1.3-billion (Canadian);
total employment -- approximately 500 employee and contract workers;
Northern work force -- approximately 300 at startup;
annual mine purchasing -- $100-million (Canadian); and
projected start of diamond production -- January, 2003.
Project description
The Diavik diamonds project is located on a 20-square-kilometre island in Lac de Gras, approximately 300 kilometres by air northeast of Yellowknife, NWT, Canada. DDMI will mine four diamond ore bodies, called kimberlite pipes, over a 20-year mine life, using a work force of approximately 450. The pipes are small compared with the world average, but they contain a higher than average content of attractive, high-quality and readily marketable diamonds.
The Diavik plan calls for a two-year ramp-up period, after which annual kimberlite processing is expected to reach 1.5 million tonnes and diamond production is anticipated to peak at approximately seven million carats per year. It is expected that the Diavik mine will produce approximately 107 million carats of diamonds over mine life.
Mining will be by a combination of open pit and, where economically feasible, underground mining methods. DDMI plans to build three water diversion structures (dikes) from shore to surround the four diamond-bearing pipes to enable mining to occur.
Construction of the first dike around the two A154 pipes began in 2001, enabling dewatering and overburden removal in the second half 2002. Construction of physical plant -- including the maintenance shop, accommodations complex, power generation facility and processing plant -- also began in 2001 and was virtually complete by the end of 2002.
Project milestones:
during 1994 to 1995, pipes A-21, A154 South, A154 North and A418 were discovered;
during 1994 to 1997, public consultations, environmental and other baseline studies were conducted;
during 1998 to 1999, formal environmental assessment review process was conducted;
in November, 1999, federal government approved the project for permitting and licensing;
in August, 2000, all required permits and approvals in place;
in December, 2000, decision was taken to proceed with construction;
in September, 2002, dike dewatering was completed and prestripping of the A154 pit commenced;
in November, 2002, one million consecutive hours were worked without a lost time injury;
in December, 2002, the first Diavik diamonds were recovered; and
in January, 2003, anticipated commencement of diamond production began.
Environmental and socio-economic aspects
DDMI is committed to conducting its operations (from construction to closure) to achieve a high standard of environmental quality and protection, in particular for caribou and water. This commitment has been formalized through a suite of regulatory requirements, as well as an environmental agreement concluded between DDMI, aboriginal groups and federal and territorial governments in March, 2000.
DDMI is also committed to providing maximum employment opportunities to residents of the Northwest Territories and the West Kitikmeot region of Nunavut, and business opportunities to Northern companies. These commitments to provide Northern training, employment and business opportunities have been formalized through the Diavik socio-economic monitoring agreement concluded in 1999 and in individual participation agreements concluded with five aboriginal groups -- the Dogrib Treaty 11 Council, Yellowknives Dene First Nation, the North Slave Metis Alliance, the Kitikmeot Inuit Association and the Lutsel K'e Dene Band.
Safety aspects
DDMI is committed to a safe and healthy working environment for employees, contractor employees and visitors, and maintains a safe workplace by applying stringent safety standards, educating workers, measuring its continuing performance, reviewing the systems and programs in place to ensure people are protected and setting targets for continuous improvement.
DDMI monitors safety by lost time injuries (LTI). DDMI considers an LTI to have occurred where a worker is unable to return to his or her normal work duties for their next shift as a result of a work related injury. The lost time injury frequency rate (LTIFR) is an industry standard that measures the number of LTIs per 200,000 hours worked. DDMI has put in place programs for continuous improvement to help the company reach a goal of zero work-related injuries. In 2000, DDMI achieved an LTIFR of 1.14. In 2001 the LTIFR was 0.94. In 2002, the LTIFR was 0.38 with six LTIs.
Additional information about the Diavik diamond mine, including DDMI's annual social and environment report, can be found on the DDMI Web site at www.diavik.ca. |
