Tahera advances Jericho (September 09, 2004)

Tahera Diamond‘s (TAH-T) Jericho diamond project in Nunavut took another step toward reality after the Kitikmeot Inuit Association formally signed an Inuit impact-benefit agreement.

The deal, which was agreed to in principle in December, ensures that local employment, training and business opportunities arising from construction and operation of the project will be provided to Nunavut Inuit, and outlines the special considerations and compensation that Tahera will provide regarding traditional, social and cultural matters.

Tahera says the signing is a clear indication of the enthusiastic support for its quest to develop Nunavut’s first diamond mine.

The company still needs to obtain final permitting and regulatory approvals for construction, water permits, land leases, explosives permits and other associated operating licences. The company will focus its efforts on permitting and financing during the balance of the year. Construction is slated to begin in the first half of 2005.

Initially, plans at Jericho call for three years of seasonal open-pit production (April through December). Thereafter, the company will invest a year in underground mine development to facilitate two years of underground production. Finally, the operation will wind up with two years of processing stockpiled North Lobe ore. Jericho is expected to produce 3.1 million carats of diamonds over 8 years.

Jericho’s proposed $52.7-million 350-metre-by-400-metre pit will target 2 million tonnes of kimberlite grading 1.23 carats per tonne, or 2.4 million carats of diamond. The project is centred on the lone land-based Jericho kimberlite pipe, one of seven kimberlites discovered so far on the 840-sq.-km claim group. Overall, the Jericho pipe is home to an indicated and inferred resource of 7.1 million tonnes averaging 0.84 carat per tonne, or almost 6 million carats.

Including underground development and sustaining capital, the project price tag comes to $65.4 million. Life-of-mine operating costs are pegged at $56 per carat. Based on an average carat value of US$81, the project generates $365 million in revenue, and operating cash flow of $191 million, for a pre-tax internal rate of return of 32.7%.