TORONTO (miningweekly.com) – Diamond giant De Beers and partner Mountain Province Diamonds (MPD) are considering launching a feasibility study for their Gahcho Kué diamond project, in Canada's Northwest Territories, the smaller firm said on Tuesday.

The partners (De Beers owns 51% of Gahcho Kué and MPD owns the balance) have completed an updated mineral resource statement for the project, which estimates the indicated mineral resource at 50,5-million carats, plus 10,3-million carats in the inferred category.

The new resource statement, which was prepared by Amec Americas, represents a “major milestone” for the project, said MPD CEO Patrick Evans.

“In their report, Amec confirms that the scientific and technical data on the Gahcho Kue project is now of sufficient quality and level of detail to support a feasibility study, which is currently under consideration by the joint-venture partners," Evans said.

To assess reasonable prospects for economic extraction to support the declaration of a mineral resource, diamond valuations were analysed from both WWW International Diamond Consultants and De Beers' Diamond Trading Company.

All of the indicated mineral resources and a significant portion of the inferred resources were shown to have reasonable prospects of economic extraction through open-pit mining, MPD said.

All the Gahcho Kue kimberlites remain open to depth.

However, any progress on the project may be frustrated in the near term by difficult market conditions, after the global economic slowdown and financial crisis resulted in significantly lower demand and prices for rough diamonds.

De Beers, in which diversified miner Anglo American owns a 45% stake, has announced production cutbacks in South Africa, Botswana and Canada, and has also said it will cut jobs to lower costs.

Gahcho Kué, in the Northwest Territories, was discovered more than a decade ago, but development has been delayed by lengthy permitting processes, as well as a decision a year ago to include the Tuzo kimberlite in the initial mine plan, rather than waiting to develop it in ten years or so, when the other two primary pipes were mined out.

If the project continues to production, Gahcho Kué would be De Beers' third mine in Canada, after the Snap Lake mine, in the Northwest Territories and the Victor mine, in Ontario.

MPD shares rose 7,14% on Tuesday, to C$1,50 apiece by 15:52 in Toronto.

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