RAPAPORT... Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, reported that current reserves at its Ekati diamond mine in Canada's Northwest Territories would sustain mining into the year 2019, at least, according to its first round of estimates.
The Ekati mine, in which the company recently acquired from BHP Billiton, has indicated mineral resources, inclusive of mineral reserves, estimated at 127.5 million carats. However, inferred mineral reserves contain 19.1 million carats and more immediately, economically-viable probable mineral reserves contain 19.6 million carats.
Mineral resource estimates cover stockpiles and the Koala, Fox, Misery, Pigeon, Sable, Jay and Lynx kimberlite pipes, while mineral reserves (those resources known to be economically feasible) refer to the company's Core Zone joint venture with all kimberlites except Sable, Jay and Lynx. The company noted, however, that it could in fact be able to incorporate Jay, specifically, and Lynx deep mineral resources into the life-of-mine plan once sufficient and additional technical work has been undertaken on those pipes.
Nonetheless, with a projected recovery of just the reserves of 19.6 million carats during the next seven years, the company anticipates revenue from that production of $4.2 billion, expenses of $3.1 billion, taxes of $514 million and a net present value, at a 7 percent discount rate, of $460 million. The estimate assumes a 2 percent annual increase in rough prices.
The company also said that there is additional potential for supplemental process plant feed in the form of coarse reject tails in those stockpiles at Ekati, all of which have been collecting since the start of production in 1998. There is also potential to treat low-grade stockpiles, primarily derived from open pit mining at Fox, if the grades in the stockpiles can be demonstrated to be economic with additional testwork, according to the company.
The Ekati diamond mine consists of 282 mining leases over 262,175 hectares, containing 150 known kimberlites. To date, Ekati has produced 53.5 million carats since production began in 1998.
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