DIAMOND PRODUCTION NEWS Diavik Mine to Boost Output

LAC DE GRAS, Northwest Territories Joint venture partners ABER DIAMOND CORP. (40%) and RIO TINTO PLC (60%) will be taking advantage of strong markets by increasing output at the Diavik diamond mine. The revised mine plan calls for increasing throughput to 1.7 million tonnes of ore in 2004, a rate that is expected to increase diamond production to about 8.2 million carats.

The recovery plant will be supplied with ore from the existing A-154 pit (1.6 million tonnes from the South pipe and 470,000 tonnes from the North pipe). Part of the ore will be stockpiled pending increases in plant capacity to 2 million tonnes during 2005.

Capital costs to achieve the increased rates will be $38 million in 2004. That amount will cover the purchase of haulage trucks and an expansion of the tailings impoundment area. Aber estimates that cash costs for the expanded mine and plant will be $24/carat.

Increasing production A-154 pit means that development of the A-418 pit and its water containment dyke, and the development of an underground mine plan means must be speeded up. A high-level strategic planning team has been formed to oversee the timing and engineering of these future aspects of the project. Currently a total of $140 million of capital expenditure is planned for calendar years 2006 and 2007 for the construction of the A-418 dyke. Additional capital expenditure totaling $25 million is assigned for calendar years 2005 and 2006 to the development of a production scale underground decline to access the lower levels of the A-154 South and A- 418 pipes with the objective of assessing the feasibility of various underground mining methods.

Budgeted exploration expenditures will more than double to Cdn$9 million for calendar 2004 (compared with $4 million this year). Emphasis will be placed on the evaluation of 27 kimberlite pipes located within a central core of the Diavik claim area supplemented by ongoing, wider exploration for new pipes.