TORONTO (miningweekly.com) – A feasibility study is now under way on the Gahcho Kué diamond prospect, in Canada's Northwest Territories, Mountain Province Diamonds said on Tuesday.

Gahcho Kue is 51% owned by De Beers Canada and 49% by TSX- and Amex-listed Mountain Province.

JDS Energy and Mining has been hired to do the study, which is expected to take about 12 months and cost C$10-million.

"JDS and our joint venture partner, De Beers Canada, have considerable experience in Canada's diamond industry. This ensures that the Feasibility Study will identify the optimal development options for the Gahcho Kué project," commented Mountain Province CEO Patrick Evans.

In July, De Beers Canada and Mountain Province agreed to revise their joint venture on Gahcho Kué.

De Beers had been sole funding work on the project, as part of an earn-in agreement, but the ownership split will now stay at current levels, and the partners will fund their respective share of spending.

Mountain Province also agreed to repay its proportionate share of historical spending on the project, which has been calculated at C$120-million.

The C$59-million payment will be made in several stages and forms, one of which includes Mountain Province funding De Beers' share of the costs to complete a feasibility study on the project.

The Gahcho Kué project consists of a cluster of kimberlites, three of which have an indicated resource of approximately 30,2-million tons, grading at 1,67 ct/t, (approximately 50,5-million carats), plus an inferred resource of about 6-million tons, at 1,73 ct/t, or around 10,3-million carats.

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