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Dominion Diamond files developers assessment report for Ekati’s Jay pipe

7th November 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Canadian precious gems producer Dominion Diamond has filed a developers assessment report (DAR) with the Mackenzie Valley Environmental Impact Review Board for the Jay kimberlite pipe at the Ekati mine, in Canada’s Northwest Territories, as part of the requirements of the environmental assessment (EA) process.

The Jay project is an extension of the large, stable and successful Ekati mining operation with the potential to extend the mine life to about 2030, more than ten years beyond the current closure date. The facilities required to support the development of the Jay project and to process the kimberlite already existed at the Ekati operation.

Dominion on Thursday said the DAR submission was the next step in the permitting process to develop the largest diamondiferous resource in North America. The analytical and hearing phases of the EA process were expected to deliver a Ministerial decision late next year. Once this decision was issued, the water licence and land-use permitting process would take about six months more.

The Jay project entailed building a water retention dike following a horse-shoe shaped alignment from the shoreline out into Lac du Savage to isolate the portion of the lake overlying the Jay pipe. The dike would be 5 km long with an average water depth of 5 m. The approach is similar in concept, geographic environment and water depth to that implemented between 2008 and 2010 at the Meadowbank Gold mine, in Nunavut, owned by Agnico Eagle Mines.

The project timeline currently envisioned that the dike construction would start in the summer of 2016 and would continue through to 2019. Dewatering and prestripping would then take place, followed by conventional openpit mining, with output currently expected to begin in 2020.

Despite it being a requirement of the DAR to include economic parameters to support modelling community and government benefits, these were illustrative only. A prefeasibility study based on engineered estimates would be published before year-end, Dominion pointed out.

The Jay kimberlite pipe is located in the south-eastern portion of the Ekati mine property, about 25 km south-east of the Ekati main facilities and about 7 km to the north-east of the Misery pit, in the Lac de Gras watershed. The Jay project was part of the Buffer Zone Joint Venture in which the company had a 65.3% interest.

Dominion on Thursday also noted that subsidiary Dominion Diamond Ekati Corporation, the operator of the Ekati mine, had posted surety bonds with the government of the Northwest Territories (GNWT) of C$253.5-million to secure the obligation under its water licence to reclaim the Ekati mine site.

As a result of posting the surety bonds, the company said it had received letters of credit for C$82.6-million, previously posted as security regarding the reclamation obligation.

The GNWT continued to hold letters of credit for about C$42.7-million as security for reclamation and related activities at the Ekati mine, pending a review by the GNWT of duplication between the security required under the water licence and security held by the GNWT under the environmental agreement.

The surety bonds were issued by a consortium of insurance companies led by Zurich Insurance, including ACE INA Insurance and Aviva Canada. Marsh Canada brokered the terms on behalf of the consortium. Rothschild advised Dominion on the transaction. The current coupon rate of the bonds is 1.3%.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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