Stornoway’s Renard, Quebec’s first diamond mine, prepares for 2016 start
In fable and song, Renard is a cunning fox. He understands his home, its nooks and crannies, where its secrets lie. But if you are Stornoway Diamond Corp., you have outsmarted the fox thanks to thorough exploration, determination and a vision of the future that includes Quebec’s first diamond mine.
Diamond exploration began on the Foxtrot property 350km north of Chibougamau, Que., in 1996. Five years later, partners Ashton Mining Canada and Soquem, had discovered and drilled five Renard kimberlites. Results were promising, and a conceptual study of Renard 2 3, 4 and 65 pipes was prepared in 2004. Bulk sampling followed the construction of a 10-t/h DMS plant at the Renard 2 kimberlite in 2006.
Stornoway acquired Ashton and its 50% interest in the Foxtrot property in 2007. An economic assessment study was commissioned the next year, but it would be two more years before it was completed. The outlook continued to look extremely promising, and Stornoway acquired the remaining 50% of the project.
The feasibility contract was awarded in 2011 to SNC-Lavalin with a resource update to be provided by GeoStrat Consulting. The list of contributors includes some of the best talent available anywhere in the world – Golder Associates, Itasca Consulting, G Mining Services, AMEC Americas, Roche Ltée, and RPA Inc.
As outlined in the feasibility study, the Renard project has a post-tax net present value discounted at 7% of $391.5 million and $683.5 million pre-tax. The internal rate of return is 16.3% on an after-tax basis and 20.3% on a pre-tax basis. The payback period from the end of the pre-production period in May 2016 is 4.8 years (after-tax) and 4.7 years (pre-tax).
The economic indicators for an economic mine were aligning, and the time came to begin building, starting with an all-weather road. To reach the property, the province of Quebec and Stornoway teamed up to build a 240km all-season road from Temiscamie to the mine site. That makes Renard the exception to fly-in/fly-out operations so common in the north.
The road was divided into four segments. The province funded the first two, building approximately 140km of two-lane gravel highway. Stornoway agreed to build the remaining 100km, known as “Renard mine road.” It is a single-lane gravel road.
Stornoway’s portion of the road was financed by a $77-million loan from the province. The mine road was completed two months ahead of schedule and 10% under budget. The first vehicle to traverse the entire length arrived at the mine site on Sept. 3, 2013. The savings from road construction were applied to the landing strip at the mine site. The first plane arrived on Nov. 3.
Another major benefit of the all-season road is that it allowed Stornoway to choose natural gas generators, a thriftier alternative to diesel-fired units. Seven 2.1-MW, gas-fired gen-sets will be installed, and cryogenic LNG shipments will be trucked to the mine site year-round. The decision also reduces potential greenhouse gas emissions and eliminates propane use at the site.
Diesel fuel will be used during the construction phase of the project, and will continue to be available for the mining and other mobile equipment when production starts.
Show me the money
The story of how Renard was financed is remarkable.
“What we did,” Stornoway President and CEO Matt Manson told Canadian Mining Journal, “was to take a company with a market capitalization of $120 million and raise $946 million for a greenfield project during tough markets.”
The financing took a couple years to put together but during that time everything necessary to develop the project was nailed down. The needed permits from Quebec were received in the fall of 2012, as was the mining lease. Federal authorities gave their blessing in the fall of 2013. The bankable feasibility study was complete. The impact and benefits agreement with the Cree was signed. All this work amounted to a very thorough due diligence.
Putting together the money to take Renard to production was the largest ever project financing package for a publicly listed diamond company. The list of transactions includes a $427-million common share subscription, a $275 million diamond streaming agreement, $155 million in two debt facilities, and $48 million cost overrun facility.
“This was a one shot deal,” said Manson. “And I don’t think anyone is going to be able to do it again for quite a while.”
The reason the financing came together all at once rather than being raised in tranches, was that all the interested parties could see the entire proposal at once and understand how the various aspects came together, he added.
The deal closed on July 8, 2014, and $464 million was immediately available with which to start construction.
Backers of the Renard project include Orion Mine Finance, Diaquem Inc., Ressources Québec, and the Caisse de dépôt et placement du Québec. Caterpillar Financial is providing an equipment financing facility.
With the award of the EPCM contract to SNC-Lavalin and subcontractors AMEC Americas and DRA America’s mobilization the site officially began in August 2014.
Reserves and resources
Before anyone builds a mine, there must be something that can be economically mined. That is certainly the case at Renard. One estimate puts the total value of diamonds recovered over the life of the project at $5.1 billion.
The probable mineral reserve of the Renard kimberlites is 23.79 million tonnes grading 75 cpht and containing 17.95 million ct. The property has 35.45 million indicated tonnes grading 76.4 cpht and containing 27.09 million ct. The inferred resource, including not only the Renard pipes but also the Lynx and Hibou dykes, totals 29.67 million tonnes grading 56.8 cpht and containing 16.85 million ct.
Unlike most others in Canada, the Renard kimberlites do not taper as they get deeper. Instead, they tend to be as wide at depth as they are at the surface. That gives the project considerable upside for the expansion of resources.
Drilling at the Renard 2 kimberlite has already confirmed the existence of mineralization to at least 370 metres below the mineable resource as currently outlined, or 970 metres below surface.
Stornoway is planning additional exploration of the pipes and dykes expecting to outline between 54.6 million and 84.9 million more tonnes containing between 25.7 million and 47.8 million ct. If the exploration program expands resources by even the minimum estimates, Renard will have a very long and productive life.
Open pit mining
Stornoway plans to use a combination of open pit and underground methods to recover kimberlite from three pipes – Renard 2, Renard 3 and Renard 4. The initial pit will encompass the R2 and R3 pipes providing feed to the plant in 2016. Underground access will be through the pit floor into the R2 pipe, with the R3 and R4 pipes accessed via underground development of the R2 pipe.
The R2/R3 open pit, as designed by G Mining Services, will result in a single pit at surface with two pit bottoms. The ultimate dimensions will be 455 x 310 metres at the surface with a depth of 113 metres. There are approximately 2.04 million tonnes grading 94.0 cpht and containing 1.91 million ct of diamonds that can be recovered from the R2/R3 pit.
Because of its small size, the R2/R3 pit will mined in a single phase. The preponderance of blasting will be done with emulsion in 165-mm diameter holes bored by a single down-the-hole drill. The pattern in kimberlite will be 4.0 metres with a powder factor of 0.50 kg/t to break 424 tonnes/hole. In waste rock it will be 5.0 metres with a powder factor of 0.30 kg/t and break 675 tonnes/hole. Pre-split blasting with packed explosive will be practiced to stabilize bench faces and inter-ramp angles.
Blasting activities are planned for day shift only. A heated surface explosives storage facility with a 40,000 kg capacity will be established.
The production fleet for the R2/R3 pit is minimal. As planned it will include one Caterpillar 390D hydraulic excavator with a 6.0-m3 bucket and one Cat 990H wheel loader with an 8.6-m3 bucket. Haulage will be handled by three Cat 740 articulated and four Cat 775F rigid body trucks.
A number of Caterpillar support equipment will be on site, including a motor grader, tracked dozer, compactor, tool carrier, and service excavator. Service, fuel and lube, and water trucks will most likely be supplied by Kenworth.
A second pit measuring 450 x 315 metres and 61 metres deep will be established at the Renard 65 pipe. Country rock from this pit will be used as construction aggregates and underground backfill when the surface waste rock stockpiles are exhausted. The kimberlite will be used as a bed for the ore stockpile. The kimberlite can be reclaimed and processed at a future date. The completed R65 pit will have a role to play in water management by acting as a catch basin.
Underground mining
Stornoway has chosen blasthole shrinkage (BHS) as the preferred underground mining method. There are several advantages: it meets the 6,000-t/d production target; minimizes development needs; allows the use of large equipment; controls dilution; and underground mining can begin before the pit is finished. As the stopes are drawn down, waste rock backfill will be introduced by dumping it in the R2/R3 pit and through three boreholes for the R4 pipe.
The backbone of the mine development will be a ramp driven to a depth of 610 metres around the Renard 2 pipe using an Atlas Copco Boomer 282 two-boom jumbo. Access for the Renard 3 pipe will be from the 250 level and for the Renard pipe from the 235 level. The ramp will connect the surface with six drill levels and three production levels. All employees, equipment and materials will pass through the ramp.
Underground mining will begin at a reduced rate of 550 t/d in the largest pipe, Renard 2, in October 2016. The three mines so far planned have a combined life 10 of years, into 2027.
The mine plan calls for the R2 kimberlite pipe to be divided into three vertical zones with mucking levels at 250, 430 and 610 metres. Each zone is subdivided into vertical panels – seven panels above the 250 level, 10 panels between the 250 and 430 levels, and 11 panels from the 430 level to the 610 level.
The production drills of choice are Cubex 6200HH in-the-hole units. They will bore 165-mm downholes with typical lengths of 60 to 75 metres in the body of the stope. The blastholes will have toe and burden spacings of 4.0 metres, giving a planned drill factor of 22 t/m. Slot raises in each zone will be drilled with a Machine Roger ITH raise head. Both production and development blasting will use emulsion, placed by a Dux loader.
Broken ore will be mucked through drawpoints at the bottom of the stope. These drawpoints are to be drilled uphole using a Maclean Mine Mate BH3. The holes will be 75 mm in diameter and 25 to 30 metres long. These holes will be drilled on a 3-metres toe and a 2.7-metres burden, for a drill factor of 10 t/m. Plans call for drawing down 35% of the ore through drawpoint to accommodate the swell of broken ore above.
Caterpillar will supply the mucking and haulage equipment – seven 5.7-m3 Scooptrams and twelve 60-tonne AD60 haul trucks. The LHDs will load the trucks in nearby bays to minimize their travel distance. To reach the planned production rate of 6,000 t/d, each LHD will haul 270 buckets of 12 tonnes each per shift.
Mining will proceed from the top down in the R2 pipe, beginning with the panel at the northern edge of the pipe and progressing in a southerly direction. This creates a stair step configuration. Ore will be drawn from the bottom of each panel as backfill is placed above the muck. Eventually all panels will break through to the pit bottom and contain backfill above broken muck.
The Renard 3 pipe is a narrow deposit with the bottom of the indicated resources at a depth of 250 metres. Mining will begin there in 2017 and continue through 2020. The orebody will be mined from the bottom up, again using blasthole shrinkage with drilling and production levels established at 30-metre intervals. Access to R3 will be from R2 underground development at the 250-metre level. Ramps to the drill/mucking levels will be driven as well as a fresh air raise.
The Renard 4 kimberlite will be the last one mined, beginning in 2022. It lies in the vicinity of the R65 waste pit. To ensure structural integrity, a 100-metre-thick crown pillar will be established, leaving a 135-metre vertical height to be mined. One production level and two drill levels will be developed for blasthole shrinkage. The R4 orebody will also be subdivided into vertical panels in a manner similar to the R2 deposit. The bottom production level will be 280 metres below surface, the same level as the access drift from the R2 mine.
The ventilation requirement of the Renard mine at full production is 400 m3/s. All levels will connect to a 6.1-metre diameter air intake raise located near the ramp from surface to the 610 metre level. Fresh, heated air will be drawn across the workings and exhausted through two adjacent vertical raises 4.1 metres in diameter. Internal 3.0-metre diameter raises will be excavated in the R3 and R4 pipes to aid in bringing fresh air to those workplaces.
The main fresh air raise will also serve as a secondary escapeway and a conduit for mine services such as electricity , mine water and communications. A second 3-metre diameter raise will be bored from the surface to the ramp about 30 metres below surface to allow fresh air to enter that as well.
Three sumps and pumping stations will be established on the 250- , 430- and 610-metre levels. Engineers have designed the lowermost level with a pumping capacity at 1,960 m3/day. The 430 and 250 stations will have larger capacities of 2,725 m3/day each. The 610 pumping station will be equipped with five pumps, and the other two stations will have four pumps. All pumping levels will have an equal number of backup pumps should they be needed.
A leaky feeder communications system capable of transmitting both data and voice as well as high speed internet and telephone will be installed. The conventional telephone service will be provided to the fuel magazine, maintenance facilities and refuge stations.
Kimberlite processing
The kimberlite processing plant as designed by AMEC will have a single process line for crushing and grinding to minimize the footprint and capital requirements. It will be built with a nameplate capacity of 6,000 t/d or 2.2 million t/y. It is designed for expansion to 7,000 t/d with minimal additional cost.
Run of mine ore from the Renard pit will be stockpiled ahead of a 1.0 by 1.25 metre surface jaw crusher supplied by Westpro Machinery. The material will be reduced to <250 mm. A secondary cone crusher will further reduce the size to <50 mm. The flowsheet has the potential for adding an x-ray sorter at this point to recovery large diamonds.
Tertiary crushing will be accomplished by passing the ore through high pressure grinding rolls (HPGR) to the final size of < 30 mm. It is interesting to note that the final grind size corresponds to a 200 ct octahedral diamond.
And this is another unique thing about Renard. It has the potential for very large diamonds because the size distribution of the stones. Manson said they could recover a couple stones between 50 and 200 ct as often as every two weeks (at least that what the statistics point toward).
“And that’s just gravy,” he added. “The recovery of big diamonds is not reflected in our costs or feasibility.”
Kimberlite is scrubbed and screened before the screen overflow is treated in one of two 200 t/h dense media separator (DMS) circuits. From the DMS circuits, the diamond-bearing material goes to the recovery plant where diamonds are recovered using x-ray sorting technology. Diamonds are then cleaned and packaged. Diamonds will be shipped to Antwerp, Belgium, for auction. Stornoway is not going to do any cutting or polishing itself.
Underflow from the screens ahead of the DMS circuits passes over degritting screens and into a Westpro high rate thickener. Recycled process water is collected from this thickener.
Overflow from the screens and DMS circuits are centrifuged, and the dry processed kimberlite is loaded into trucks for the journey to the processed kimberlite containment (PKC) area.
Stornoway considered five different sites for the PKC facility, finally choosing a site north of the R2/R3 pit and the waste rock storage area. The site has enough capacity to contain all of the kimberlite treated over the life of the mine. PK will be dewatered using centrifuges at the processing plant, trucked to the PKC facility and dry stacked. The selection of dry stacking facilitates progressive reclamation and helps reduce closure costs.
The PKC facility includes engineered and compacted berms as well as erosion barriers. Any runoff water will be collected and treated before release. It will hold all tailings from the mine, including potential to mine what is now inferred resources. Neither the PK or separately stored waste rock are acid generating and have little potential to leach metals into the environment. The design of the PKC reduces the potential impact on local groundwater, allows progressive closure of the facility, and avoids potential impact on fish habitats.
The mine closure plan consists of allowing the pits to flood and revegetating the waste rock, PK tailings and the plant site.
Looking forward
As this issue of CMJ went to press, work at Renard was moving quickly. The ground breaking ceremony was held on July 10. Mobilization is proceeding. Two temporary construction camps have been built. Work is underway on the permanent camp that is to be ready by the end of next March. Creation of the dry pads for the main surface facilities has started. The selection of long lead time equipment has begun. With commercial production targeted for the second quarter of 2017, from discovery to completion Renard was fast-tracked all the way.
Stornoway is proving to be one of the brightest lights in the Canadian mining sky. And if there are more mineable kimberlites on the Foxtrot property (and no one doubts that there are), this is the company to make them economic producers.
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