Canadian Mining Journal

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DIAMONDS: Feasibility study puts Gahcho Ku NPV at over $1B

NORTHWEST TERRITORIES – The 2014 feasibility for the Gahcho Kué diamond project at Kennaday Lake puts the net present value (10%) of the project at $1.005 billion, and the internal rate of returns (excluding sunk costs) at 32.5%....



NORTHWEST TERRITORIES – The 2014 feasibility for the Gahcho Kué diamond project at Kennaday Lake puts the net present value (10%) of the project at $1.005 billion, and the internal rate of returns (excluding sunk costs) at 32.5%. Gahcho Kué is a joint venture between Mountain Province Diamonds (49%) and  De Beers Canada (51%).

Great rewards such as these come with a hefty price tag. To complete the project, the partners will have to spend $848.5 million (in 2013 dollars). The requirement for working capital is estimated at $80.1 million, ramp up operating costs through January 2017 are $82.0 million, and sustaining capital over the life of the mine (including closure cost) is $92.7 million.

Gahcho Kué will produce a total of 53.4 million ct of diamonds over its 12-year life. Average annual production will be 4.45 million ct and generate revenue of US$149.66/ct.

“The feasibility study report confirms an economically robust, technically credible and environmentally sound development plan for the Gahcho Kué mine”, said Mountain Province CEO Patrick Evans.

Financing proposals are being evaluated. It is expected that a preferred lender will be selected in the near future and loan agreements will be completed before the end of this year.

Gahcho Kué is the largest new diamond mine currently in development anywhere in the world. Details are available at MountainProvince.com.