ROYALTY: Saskatchewan sets rates for diamond mines

SASKATOON - The Government of Saskatchewan has outlined a diamond royalty system for producers in the province. It features a 1% base royalty on the value of mine production, with a five-year holiday. That is followed by a stepped royalty rate on profits to a maximum of 10% once capital investment is fully recovered. Finally, there will be provision for full-cost recognition including a 100% depreciation rate of capital costs and a processing allowance.

The first diamond producer in the province is likely to be Shore Gold of Saskatoon. The company is investigating the Star-Orion South project where a preliminary feasibility study proposes total diamond production of 20 million ct over a 12-year mine life. Shore holds 100% of the Star kimberlite and 63% of the Orion South property. The balance is held by joint venture partner Newmont Mining Corp.

Further information about Saskatchewan's diamond royalty is available at http://www.Gov.SK.ca/news?newsId=3982b9cb-1ff9-471a-a943-49b77140e23f and from Bob Ellis at Energy and Resources, 306-787-1691 and robert.ellis@gov.sk.ca.