Name and Location
Gahcho Kué diamond project, Northwest Territories (NWT), Canada.

Client
Gahcho Kué Joint Venture (JV) – a collaboration between De Beers Canada (51%) and Mountain Province Diamonds (49%).

Project Description
Gahcho Kué, which is Chipewyan for ‘a place where big rabbits are found’, is located at Kennady Lake, 280 km north-east of Yellowknife and 80 km east of De Beers’ existing Snap Lake mine, in NWT. The diamond prospect is one of the largest new diamond projects under development globally.

The project consists of the Hearne North and South pipes; the 5034 West pipe, the Central and North-East pipes; the 5034 South pipe; the 5034 North pipe; Wallace; and the Dunn Sheet, Tuzo and Tesla diamondiferous kimberlite pipes, sheets and dykes.

A revised and updated feasibility study on the remote Gahcho Kué project has confirmed its robust metrics.

The deposit has current National Instrument 43-101-compliant total probable reserves of 55.5-million carats, contained in 35.4-million tonnes grading 1.57 ct/t.

The mine life has been estimated at 12 years, during which the operation will produce about 53.4-million carats at an average yearly rate of 4.45-million carats using standard drill and blast, and truck and shovel, equipment and pit designs, which are similar to those of other openpit diamond mines operating in the area.

The average yearly output for the first three years of full production from 2017 to 2019 will be about 5.6-million carats.

Ore will be fed to a three-million-tonne-a-year processing plant, with three stages of crushing, dense-media separation and X-ray/grease diamond-recovery circuits.

Supporting infrastructure includes a 14.1 MW packaged diesel power plant, a 1 350 m gravel airstrip, a five-bay truck shop, an emulsion plant, a 40-million-litre fuel storage facility and a 432-bed accommodation/office complex.

Net Present Value/Internal Rate of Return
None stated.

Value
According to the revised and updated feasibility study, the project will cost C$859-million to construct and the operation will require working capital of C$80-million.

Costs to ramp up the operation to January 2017 have been estimated at C$82-million.

Duration
Production aims to start in 2016.

Latest Developments
The Gahcho Kué diamond mine is 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.

Focus key areas are the remaining earthworks, commissioning of the primary crusher and diamond plant, prestripping and stockpiling of kimberlite, as well as preparations for operational readiness.

Mountain Province has also reported that ice road deliveries to Gahcho Kué are proceeding to plan. Delivery of critical large mining equipment to site has been completed, 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 will be included in 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.

Key Contracts and Suppliers
JDS Energy & Mining (feasibility study).

On Budget and on Time?
Construction remains within budget and on schedule for first production to start in the second half of 2016.

Contact Details for Project Information
De Beers Canada external and corporate affairs tel + 1 416 645 1710.
Mountain Province Diamonds, tel +1 416 361 3562, fax +1 416 603 8565 or email info@mountainprovince.com.