Small, in a Big Way
Canada’s third diamond mine to open represents many significant firsts. Jericho is the first mine for owner and operator Tahera Diamond Corp. of Toronto, and is the first wholly-Canadian-owned diamond mine in the country. This was the first project to successfully navigate the permitting system in Nunavut, and is still the only mine operating in the territory.
The small mine–expected to produce 600,000 ct/y for eight years–has opened a few eyes, proving that compact diamond mines can be built in Canada’s north on a tight budget. Says Grant Ewing, the company’s executive vice-president of corporate development: “Tahera worked very hard to keep capital costs low, and to design the project to maximize return.” The approximately $120-million capital costs for the mine, plant and other infrastructure were funded by a series of financings and a $35-million project loan from Tahera’s purchase and marketing partner Tiffany & Co.
The size of the mine doesn’t mean the product is small. In fact, Jericho is believed to yield a larger percentage of large, high-quality stones than the other diamond mines in the area. Its best so far was a 59-ct gemstone with excellent shape, good colour and clarity recovered in the second quarter of 2006, worth half a million dollars (U.S.).
Tahera was formed in 1999 by the amalgamation of Lytton Minerals Ltd. and New Indigo Resources Inc. A predecessor company had staked the Jericho property in 1993/94, 170 km north of the Ekati and Diavik diamond mines, and just 25 km from the former Lupin gold mine. A program of regional airborne geophysics, indicator mineral sampling and target drilling discovered the Jericho kimberlite.
There was a positive feasibility study in June 2000, but a change in management in 2003. SRK Consulting updated the feasibility study in a preliminary assessment study in 2004 to mine a deeper pit incorporating both reserves and inferred resources.
The final environmental impact statement was submitted in early 2003, and the project received environmental approval from Indian & Northern Affairs Canada in June 2004. The Nunavut Water Board approved the project in late 2004, and the project received its water licence and land lease early in 2005.
Tahera signed an Inuit impact and benefit agreement with the Kitikmeot Inuit Association in September 2004. The agreement focuses on Inuit participation in employment, training, business opportunities, and community development initiatives arising from operating the Jericho mine.
Construction supplies and fuel arrived via the winter road from Yellowknife in February and March 2005, and the construction began in March under general contractor Clark Builders.
The plant began commissioning in January 2006 and recovered the first diamonds later that month, just 11 months after the initial mobilization to the project site. There were no lost time accidents during the >550,000 person-hours of construction work. Physical completion was in April, and the plant attained commercial production by July 1, 2006. During the first half of the year, the plant had processed 210,000 t of ore, recovering 127,000 ct of diamonds.
Tahera’s executive vice-president of operations, Dan Johnson, described the mine in a January interview.
The Jericho kimberlite in the northern Slave province forms a 300-m-long by 100-m-wide deposit comprising four lobes of differing hardness and grade, split vertically. The Centre lobe is the softest and highest grade (1.40 ct/t) and value (US$103/ct), while the South lobe is the hardest rock and has the lowest grade (0.36 ct/t). The other two lobes (North and the JDF1) lie between the Centre and North lobes. Jericho ore is in a totally frozen permafrost condition because it is a land-based kimberlite and not located under water (a rarity for kimberlite in Canada’s north), so there are only minor pit water issues.
Jericho’s “potential mineable kimberlite” (reserves plus inferred resources) is 5.525 million tonnes (t) averaging 0.85 ct/t, with diamonds valued at US$95/ct. A new mineral resource statement will be available in March 2007.
The pit will ultimately measure about 500 m by 350 m, and 270 m deep. The life-of-mine strip ratio is 6:1. The 10-m benches are drilled and blasted by McCaw’s Drilling. The explosives (generally a 70% emulsion, 30% ANFO blend) are manufactured onsite and delivered by Dyno Nobel Nunavut. Contract miner Nuna Logistics uses one shovel, one large loader, and three to four 90-t-capacity Cat 777 trucks per shift. Waste rock is stored adjacent to the pit or used for construction.
Product is valued ten times per year by a government agent for tax purposes and then shipped with certificates to Tiffany subsidiary Laurelton in Yellowknife, which forwards the stones to Antwerp for independent valuation. Tiffany purchases a portion and markets the rest to the international diamond market.
Just as the mine was starting up, unusually warm weather caused a serious snag. The historically short season for the winter ice road in 2006 meant that Jericho received much less fuel than it needed for 2006 operations, so it had to cut back on stripping. This meant that higher-grade, Centre-lobe material could not be mixed to maintain the planned 64% blending rate for feed into the processing plant. Instead of preferentially stockpiling lower grade material, the limited stripping and ore exposure required that all kimberlite mined be fed directly to the processing plant during the first year of operations.
Equipment and startup issues meant that only 90% of the original plant feed tonnage budget was achieved during the year. The principal equipment issues centred around the primary roll crusher, which was replaced by the supplier, with the new unit in operation by the end of September.
Tahera’s Q3 2006 results were disappointing–plant throughput averaged 1,700 t/d grading 0.62 ct/t, yielding 96,500 ct valued at Cdn$107/ct–so it could not meet certain financial commitments. A $30-million private placement in mid-November put money in the company’s coffers, but Tahera is now 15% owned by Teck Cominco Ltd. However, this arrangement allows Tahera to draw on the technical and financial strengths of the experienced miner.
There is more good news. The mine is currently extracting 20,000 tonnes of ore plus waste per day. The resource model has not changed, so Jericho is forecasting to move gradually toward a 0.82-ct/t grade this year. The winter road this year should allow for delivery of all the consumables required for 2007 operations.
Tahera shows no signs of stopping at one mine. In December the company approved an $8-million 2007 exploration budget including work on the JD-3 kimberlite and Muskox kimberlites near Jericho, and the Anuri kimberlite 90 km to the northwest.