TORONTO (miningweekly.com) – Canadian miner Dominion Diamond Corp on Wednesday said it had filed an application with the Wek'éezhii Land and Water Board (WLWB) requesting a new land use permit and a Class A water licence to extend the Ekati diamond mine, in the Northwest Territories, to include the Jay and Cardinal kimberlite pipes.

The application, which comprised a detailed project report for the Jay-Cardinal project, represented the first stage in the regulatory approval process, for which detailed study work started immediately after acquiring the Ekati mine from BHP Billiton in April.

The Jay-Cardinal project entails developing the largest diamondiferous resource in North America, and is the cornerstone of Dominion’s strategy for building a long-term, sustainable Canadian diamonds business, the company said.

At the Jay pipe, drilling to date had established 78-million carats of indicated resource and 13-million carats of inferred resource, and more work at Jay during the coming winter is designed to enable Dominion to develop an openpit reserve to support development of the project.

In itself, the Jay-Cardinal project has the potential to extend the operating life of the Ekati mine by about 10 to 20 years beyond the currently scheduled closure in 2019.

"The scale and robust nature of the Jay-Cardinal project has the potential to secure the future not just of the Ekati diamond mine, but of the Northwest Territories diamond industry,” chairperson and CEO Robert Gannicott said.

Dominion said the project schedule expected environmental assessment approval before the end of 2015, after which construction would start, leading to the planned release of diamond-bearing kimberlite to the process plant by 2019.

The Jay and Cardinal kimberlite pipes are located in Lac du Sauvage, in the south-eastern portion of the Ekati mine property, about 25 km from the main facilities and about 7 km to the north-east of the company's Misery mining area. The two pipes are located in the Buffer Zone Joint Venture, in which the company has a 58.8% controlling interest.

Mining the Jay and Cardinal kimberlite pipes would require two freshwater diversions around an area within Lac du Sauvage. The water level would be drawn down to a level that exposes the two kimberlite pipes for openpit mining; underground mining is also planned.

Diamond-bearing kimberlite would be trucked to the existing Ekati process plant using the existing Misery haul road. Processed kimberlite tailings would be deposited into mined-out openpits at the Ekati site, thus avoiding expanding or constructing new deposition areas.

Dominion noted that an area at the outlet of Lac du Sauvage that was traditionally used by local Aboriginal groups would not be disturbed by the project. The existing Ekati mine environmental monitoring, management and mitigation programmes could all be expanded to incorporate the activities proposed for the Jay-Cardinal project.

The current Canadian National Instrument 43-101-compliant resource estimate for the Jay kimberlite pipe included 36.2-million tonnes of indicated resource at 2.2 ct/t and 9.5-million tonnes of inferred resources at 1.4 ct/t. The pipe is believed to continue at depth.

The company estimated the rough diamond price for the Jay diamonds to be about $74/ct, as at December 31, 2012, assuming the current process plant recovery parameters that use a 1.2 mm slot screen cutoff resulting in 85% of the diamonds being recovered.

Follow-up delineation drilling programmes were planned at both the Jay and Cardinal kimberlite pipes during the coming winter.

Dominion said it had already started the initial work on a prefeasibility report for development, which it aimed to complete during 2014.

ANOTHER EXPANSION

Dominion had also in September filed an application with the WLWB requesting a land use permit and water licence to enable it to start mining the Lynx kimberlite pipe at the Ekati mine, representing an extension of the Misery operations, and requiring little new infrastructure.

Developing the Lynx project would entail draining a small lake, as is customary for the kimberlite pipes that have been mined at the Ekati mine, and developing an openpit mine with a short access road.

All other necessary facilities, such as the process plant and camp, are already present, and it is expected that the instruments of environmental management and monitoring currently in use at the Ekati mine would be expanded to include all aspects of the Lynx project.

Based on the scope of the proposed Lynx project, as well as the fact that the proposed project activities have been previously assessed, it was expected that the necessary project approvals would be completed in a few months.

The Lynx kimberlite pipe is estimated to have 1.3-million tonnes of indicated resource at 0.8 ct/t and 100 000 t of inferred resource at 0.8 ct/t, on a 100% basis as at December 31, 2012.

The company had modelled the rough diamond price for the Lynx diamonds at about $257/ct.