Industry News by Nemesis

Ongoing Exploration Locks in Canada As World's Third-Largest Rough Diamond Producer

November 30, 2016

While the Kimberley Process Certification Scheme confirmed that Russia and Botswana were, respectively, the world's top diamond producers in 2015, it also confirmed that Canada continues to strengthen its position as the world's third-largest producer. And as diamond mines deplete and no large new operations are discovered, Canadian firms are competing to make up the shortfall.

 

Canada became something of an overnight diamond producer since diamond-rich areas weren't discovered in the country until the early 1990s. Before that, diamond mining in Canada had been almost non-existent.

 

Canada owes its number three ranking to just one region of the Northwest Territories, Lac de Gras, which is the location of three large diamond-producing mines, and now a fourth – a joint venture between De Beers Canada and Mountain Province Diamonds at Gahcho Kué.



The Diavik Diamond Mine 

 

 

Of the three Lac de Gras mines, Dominion Diamond’s majority-held Ekati has about several years left of life expectancy, although development of the Jay deposit could potentially add another 11 years. Ekati was the first major discovery in Canada and has so far produced in excess of 40 million carats.

 

Meanwhile, Diavik, a 60/40 Rio Tinto-Dominion joint venture, would last to 2023 with the addition of a fourth pipe. The mine is currently in a transitional shift from open pit to underground mining, and the life span of the mine is expected to be 16 to 22 years from its opening in 2003.

 

The fly in the ointment is De Beers’ Snap Lake which has been essentially closed down though it could last to 2028.

 

Snap Lake was De Beers' first mine outside of Africa. It is also unique in that it is Canada’s first completely underground mine. De Beers spent nearly $900 million with local contractors and suppliers building the mine. Snap Lake was expected to produce 1.4 million carats annually and have an approximate life span of 20 years from its opening in 2008.

 

A fourth Lac de Gras operation remains on track for production to commence in the second half of 2016. Mountain Province Diamonds (49 percent) and joint venture partner De Beers (51 percent) expect Gahcho Kué to produce an annual average 4.5 million carats over a dozen years.

 

Ramp-up production at Gahcho Kué started on August 1, six weeks ahead of schedule, and the mine officially opened in September. Total output in August and September stood at 198,000 carats, of which about 97,000 carats belongs to Mountain Province.



The Ekati Diamond Mine 

 

Among the country's other miners are Kennady Diamonds Inc. which controls 100 percent of the Kennady North diamond project located in the Northwest Territories. Kennady North is immediately to the north and west of the Gahcho Kué Diamond Mine.

 

Kennady Diamonds aims to identify a resource along the Kelvin – Faraday kimberlite corridor of between 12 and 15 million tonnes at a grade of between 2 and 2.5 carats per tonne and also to identify new kimberlites outside of the corridor. The Kelvin – Faraday corridor is a target for further exploration. The tonnage estimate is based on the drilling completed to date. The potential quantity is conceptual in nature as there has been insufficient drilling to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

 

Meanwhile, Arctic Star Exploration has announced plans to explore its 54,000-hectare T-Rex property in Lac de Gras. Previous exploration has found over a dozen kimberlites, most of them diamondiferous, the company says.

 

Further afield, Ontario’s only diamond mine, De Beers’ Victor operation, faces depletion in 2018. The company hopes to postpone this by developing the Tango kimberlite, a smaller, lower-grade deposit seven kilometers northwest is an open pit mine and is currently producing 600,000 carats per year of rough diamond stones.

 

And in Quebec, Stornoway Diamond Corp has operations scheduled to begin at its Renard operation late this year after officially opening the mine in October. Commercial production is slated for the second quarter of 2017. The diamond mine would be the first and only such diamond project in the province.  Although potential resource expansion continues, the company estimates Renard will supply 1.6 million carats annually for 11 years, providing about 2 percent of global supply.



The Gahcho Kue Diamond Mine 

 

 

In other projects, Zimtu Capital announced in August 2015 that exploration had begun on the Munn Lake project held by the company and a partner, thus becoming the area's most recent entry. The 14,000-hectare area has not yet undergone modern exploration despite about $5.7 million of work being carried between 1996 and 2007 that found two diamondiferous kimberlites. Zimtu now has a crew sampling kimberlites to validate previous sampling and provide additional insight into the diamondiferous potential of each area, the company said.

 

Meanwhile, Canterra Minerals is a Canadian resource company specializing in diamond exploration in the Northwest Territories, strategically located between the Snap Lake Diamond Mine and the Gahcho Kué Diamond Project. The Company also maintains a 33% interest in the Buffalo Hills Diamond Project in Alberta and has recently acquired an option to earn 70% in the West Carswell property in Saskatchewan. The Canterra team has been involved in the discovery of two of Canada's four diamond mines, Snap Lake and Ekati. It reported in June that it has identified several areas that “warrant further detailed exploration, including drilling,” along with other areas that could undergo till sampling and geophysics.

 

And Margaret Lake Diamonds has announced an agreement to acquire the remaining 40 percent interest in the Margaret Lake property, giving the company sole ownership. The 19,716-hectare property lies contiguous to the north and west of Kennady Diamonds’ Kennady North project.



The Victor Diamond Mine 

 

 

In Saskatchewan’s Fort à la Corne region, Shore Gold’s majority-held Star-Orion South underwent a spring drill program to update the Orion South kimberlite’s resource. Although the project reached feasibility in 2011 and has passed a federal environmental review, Shore now plans a revised feasibility to reduce capital expenditure.

 

In addition to regions around existing and future mines, Nunavut and Saskatchewan’s Pikoo region are also drawing significant diamond exploration.

 

The Canadian diamond industry has placed a great deal of emphasis on its diamonds not having any association whatsover with conflict diamonds from Africa. Indeed, Canada was careful to become one of the main supporters of the Kimberly Process. All diamonds mined and cut in the Northwest Territories are laser inscribed with a unique identification number so that retailers can assure they are conflict-free stones.

 

In addition, all Canadian diamond mines are overseen by the Canada Mining Regulations for the Northwest Territories. This program ensures the preservation of surrounding land and aquatic habitats.

 

With diamond mines running down in the rest of the world, Canada appears to be strongly placed to continue to consolidate its position as the world's third-largest diamond producer.

 

Source: Rough-Polished

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