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Revised Feasibility Study Confirms Robust Model for Gahcho Kué

Apr 2, 2014 3:40 PM   By Jeff Miller
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RAPAPORT... Mountain Province Diamonds Inc. provided results from its revised "2014 Feasibility Study Report" for  the Gahcho Kué diamond project located in Canada's Northwest Territories. JDS Energy and Mining Inc. and Hatch Ltd. compiled and prepared the report. The Gahcho Kué project is a joint venture between Mountain Province (49 percent share) and DeBeers Canada (51 percent share).

"The feasibility study revision and update re-confirms an economically robust, technically credible and environmentally sound development plan for the Gahcho Kué mine," said Mountain Province's CEO, Patrick Evans.

The net present value (NPV) was $914 million (CAD 1 billion), capital to completion was $779 million (CAD 859 million), working capital was $73 million (CAD 80 million) and ramp-up operating costs through January 2017 totaled $74 million (CAD 82 million). The mine life was estimated at 12 years and total diamond production was 53.4 million carats with average annual production at 4.45 million carats and current price targets of $149.66 per carat.

The per-carat price was  derived from the modeled diamond price estimates provided by WWW International Diamond Consultants (February 2014 price book) exclusive of marketing fees post government valuation. The average modeled diamond price in 2014 is$118.38, according to Mountain Province.

The study indicated that average annual production for the first three years of full production (2017 to 2019) would be 5.6 million carats. The ramp-up costs do not take into consideration the revenue expected from the estimated production of approximately 1 million attributable carats during the early stages between September 2016 and January 2017.

Tags: De Beers, Diamond prices, feasibility study, Jeff Miller, mountain province, valuation
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