Name of the Project
Gahcho Kué diamond project.

Location
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.

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. Standard drill-and-blast, and truck-and-shovel equipment and pit designs, will be used.

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.

Jobs to be Created
The mine, which comprises three openpits, will employ about 530 full-time employees.

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 started in 2016.

Latest Developments
Mountain Province Diamonds has completed the mine’s first diamond sale.

A total of 49 420 ct have been sold for about $6.27-million, representing an average price of about $127/ct.

Mountain Province has said in a statement that about 75% of the parcels offered on the first diamond sale, held from January 16 to 25, in Antwerp, Belgium, were sold. The balance, which represent smaller, mainly brown and lower-quality diamonds, were withdrawn after it had failed to receive acceptable bids.

The company has stated that demand has declined for smaller, lower-quality diamonds, largely owing to liquidity restrictions caused by demonetisation in India.

Mountain Province has cautioned that the diamonds sold should not be taken as representative of the longer-term realised diamond price profile.

The company's next sale is scheduled to start on February 20, and will take place once every five weeks thereafter.

Meanwhile, Mountain Province has reported that the ramp-up of production at Gahcho Kué that started ahead of schedule on August 1, 2016, resulted in 515 000 t of kimberlite being processed to December 31, recovering 862 000 ct for an average grade of 1.67 ct/t. During the fourth quarter, the plant processed about 412 000 t of ore and produced 697 000 ct on a 100% basis, of which the company's 49% share is about 341 000 ct.

"Commissioning ramp-up from August to early December went smoothly. Extremely cold conditions during December impacted on the mine's conveyor systems, but the mining and processing progressed satisfactorily. Winterisation measures to address the conveyor issues are well under way with commercial production now expected to be achieved by the end of the current quarter,” Mountain Provine CEO Patrick Evans has said.

The total mining of waste and ore from the 5034 openpit for the 12 months to December 31, was about 22.5-million tonnes, with about 70 000 t of ore stockpiled at year-end.

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

On Budget and on Time?
First production was started on time.

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.