TORONTO (miningweekly.com) – Construction of two Canadian diamond mines, De Beers and Mountain Province’s Gahcho Kué, in the Northwest Territory, and Stornoway Diamond Corp’s Renard project, in Quebec, are progressing fast, with both projects being either on target or ahead of schedule.
TSX-listed Mountain Province on Monday said that the Gahcho Kué diamond mine was progressing according to plan with the overall project more than 87% complete and on track for first production during the second half of the year.
Key areas of focus were remaining earthworks, commissioning of the primary crusher and diamond plant, pre-stripping and stockpiling of kimberlite as well as preparations for operational readiness.
The company also announced that the Gahcho Kué Joint Venture, a collaboration between De Beers Canada (51%) and Mountain Province Diamonds (49%), had appointed Allan Rodel as the mine's GM. Rodel joined the De Beers Group in 1997 and held a number of senior management positions, including that of Gahcho Kué project manager, since 2013.
The company also made nine senior operational appointments at Gahcho Kué, including the mining manager, engineering and maintenance manager, ore-processing manager and technical services manager. Under the leadership of Rodel and the operations management team, commissioning of the Gahcho Kue mine was well under way.
Mountain Province also reported that the ice road deliveries to Gahcho Kué were proceeding to plan. Importantly, delivery of critical large mining equipment to site was completed last week with the bulk of the remaining deliveries being diesel fuel.
The project also continues to meet the lending group's tests-to-completion, with an advance of $73-million to fund cash calls during the first quarter. A total of $231-million had been drawn against the $370-million facility. An update on performance against budget would be provided with the year-end results at the end of March.
The Gahcho Kué diamond mine is expected to produce an average of 4.5-million carats a year over a 12-year mine life.
Meanwhile, TSX-listed Stornoway had earlier this month announced a revised construction schedule for the Renard project, reporting a reduced capital cost forecast.
The company had rebaselined the project’s schedule and capital cost forecasts following several months of construction progress achieved consistently ahead of plan. This had been undertaken as part of the revised mine planning for Renard that was expected to be completed in the second quarter of this year.
First ore delivery to the Renard diamond process plant was now scheduled for the end of September 2016, with commercial production (60% of plant capacity achieved over 30 days) to be achieved by December 31. This was a five-month improvement on the previous schedule, which assumed commercial production in the second quarter of 2017.
The estimated capital cost to complete the project had been adjusted downwards from C$811-million to C$775.4-million, reflecting savings in general and administrative expenses, as well as capitalised operating expenses. The new cost forecast included all contingencies, escalation allowances and working capital up to the date of commercial production.
As at December 31, 2015, before the rebaselining exercise, overall construction at the project stood at 63.3%, compared with a plan of 59.6%, with engineering substantially complete at 99%.
An updated mine plan for the Renard project was being prepared and due to be released early in the second quarter. This plan would incorporate the rebaselined schedule and capital cost for the construction of the project. It would also include revised guidance on the production profile, mine life, operating costs, sustaining capital and mineral reserves.
In 2016, global diamond output was expected to hit 150-million carats and then fall back to about 100-million in 2030.
Further, Canadian project developer Diamcor Mining was aiming to declare commercial production at its flagship Krone-Endora Venetia project, in South Africa’s Limpopo province, during the second or third quarters this year, pending the issuance of an expanded water licence, chairperson and CEO Dean Taylor told Mining Weekly Online during the Prospectors and Developers Association of Canada convention last week.
“As soon as our expanded water permit is issued, it removes all the limitations on the plant. Over the previous quarters, the plant had been running at about 30% of capacity, which was strictly limited by the current water licence,” he explained.
The plant had been commissioned and integrated in anticipation of the extended water permit, he said.
TSX-V-listed Diamcor had not yet declared commercial production at its Krone-Endora project, located directly next to De Beers’ Venetia diamond mine – South Africa’s largest diamond mine. Recoveries were incidental to the ongoing commissioning and testing exercises performed at the project.
The Canadian junior sold 3 697.33 ct of rough diamonds from its Krone-Endora Venetia mine in the company’s fiscal quarter ending March 31, 2016. The gross proceeds amounted to $542 540.43, resulting in an average price of $146.74/ct.
According to analysts, financing restrictions to the midstream segment of the diamond industry, which was until recently a hindrance to the market, was stabilising; however, the future production pipeline remained limited as the market became more driven by the fundamentals of supply and demand.
Mountain Province’s TSX-listed stock had risen by about 20% since the start of the year to C$4.98 apiece, while that of Stornoway had risen by more than 40% in the year-to-date period to C$1.04 apiece. Diamcor’s TSX-V-listed stock was trading down 3.41% since the start of the year.