JOHANNESBURG (miningweekly.com) – Dublin-headquartered Karelian Diamond Resources has received the results of a preliminary economic assessment (PEA) for its Lahtojoki kimberlite pipe in eastern Finland, which recommends that a mine should be developed to extract more than $200-million worth of diamonds.

The PEA, which was carried out by Brennan Mining Services, estimates that about 2.11-million carats could be recovered from a mine operating for nine years.

The study states that the Lahtojoki mine will cost about $22-million to build and that the project will have a net present value of $39.1-million and an internal rate of return of 55%.

The PEA is based on a non-Joint Ore Reserve Committee resource estimate of 2.23-million carats with a contained value of $222.5-million and estimates plant recovery at 95%.

The study states that analysis of combined microdiamond and mini-bulk sample data suggests a +1 mm recoverable grade of 39.7 carats per hundred tonnes and indicates the presence of high-quality stones within the diamonds that have been recovered to date. 

Drilling indicates 5.6-million tonnes are present to a depth of 160 m below the surface.

“Clearly much work remains to be done but this report is a major and very encouraging step forward in our assessment of the Lahtojoki diamond project and of its potential for development as a mine,” Karelian chairperson Richard Conroy said on Tuesday.

Lahtojoki deposit has the potential to be the first diamond mine in Europe, outside Russia.

The company’s diamond projects are based on the diamond prospectivity of the Karelian Craton, which is comparable in size to the diamond-rich Slave Lake Craton in Canada. The Karelian Craton stretches across north-eastern Russia and northern Finland. The Lomonosov and Grib Pipe diamond deposits have been discovered in the Russian section of the craton and Russian diamond giant Alrosa has indicated that the region presents strong growth possibilities.