De Beers tables grade estimates for Tuzo kimberlite

Despite a slight increase in the grade estimate of the Tuzo pipe at the Kennady Lake diamond project in the Northwest Territories, the value per carat has decreased by US$25. Consequently, Monopros, the operator, has decided to initiate an aggressive exploration program with the goal of increasing the resource base and enhancing the project economics.

The Tuzo kimberlite is one of five diamondiferous bodies at the Kennady Lake project, which occupies a portion of the AK and CJ claims. The claims are owned 90% by Mountain Province Mining (MPV-T) and 10% by Camphor Ventures (CFV-V). Monopros, which is the exploration arm of De Beers Consolidated Mines (DBRSY-Q), can earn up to a 60% interest in the claims by advancing them to production. Mountain Province is carried to a 36% interest; Camphor, to 4%.

The 523-tonne kimberlite sample taken from the Tuzo pipe yielded 540 carats of diamonds. The average modeled grade for the pipe was pegged at 1.22 carats per tonne — an increase over the initial bulk-sampling grade of 1.02 carats. The modeled revenue value per carat weighed in at US$43 per carat, compared with a best-fit value of US$68 per carat calculated from the small bulk sample taken in 1998. Mountain Province says the decrease in value per carat is due to the presence of a higher proportion of smaller stones.

These results, combined with previously released results from the Hearne and 5034 pipes, have led De Beers and Mountain Province to conclude that the rate of return achieved from mining the three kimberlites would not be sufficiently high. However, the partners hope to enhance the economic viability of the project by embarking on an aggressive exploration program to increase the present resource base.

“The [Kennady Lake] project is De Beers’ most advanced project in Canada,” says Richard Molyneux, president of the company’s Canadian division, “and we will do everything possible to develop the project into a mine. We also believe there is strong evidence for other diamondiferous bodies on the AK claims, and it is our goal to quickly find them.”

De Beers has decided to extend its feasibility decision and will immediately take on all exploration, development and project costs. (Since July 1999, Mountain Province has been pitching in 44.1% of project expenses.) In addition to the exploration program, De Beers will consider alternative mining plans in the hope of reducing capital and working costs associated with the possible mining of the pipes.

Grades are based on a three-dimensional model for the Tuzo pipe, taking into account its four different kimberlite zones. The tailings were systematically audited and an additional 19 carats worth of diamonds were recovered from the concentrates. These were incorporated into the grade model.

The A and B zones represent the top 80 metres from a depth of 20-100 metres. Resources in the A zone were estimated at 1 million tonnes averaging 2.7 carats per tonne. The stones are valued at US$47 per carat and the revenue per tonne is estimated at US$127. The B zone resource weighs in at 2.4 million tonnes grading 0.94 carat per tonne. The diamonds are valued at US$33 per carat for revenue of US$31 per tonne.

From 100 to 200 metres, the pipe consists of predominantly Bg zone kimberlite, which, in turn, is made up of 40% granite inclusions, as well as some inclusions of zone B and zone C kimberlite. The resource is pegged at 2.4 million tonnes averaging 0.62 carat per tonne. The diamonds are valued at US$33 per carat for a gross revenue per tonne of US$20.

The zone C kimberlite extends from depths of 200-300 metres and contains some inclusions of zone B and Bg kimberlite. The resource is estimated at 4.4 million tonnes averaging 1.35 carats per tonne. The stones are valued at US$47 per carat for a gross revenue of US$63 per tonne. The weighted average of all zones is 10.2 million tonnes at 1.22 carats per tonne. The average value of the diamonds is US$43 per carat for a gross revenue of US$52 per tonne. De Beers valued the recovered diamonds per sieve class in Kimberley, South Africa. De Beers uses a commercial bottom cutoff recovery size screen with a 1.5-mm square mesh to determine grades.

Kimberlite from the 5034, Hearne, Tuzo and Tesla pipes was processed at Monopros’s dense media separation plant at Grand Prairie, Alta., and the resulting concentrates shipped to Johannesburg, South Africa, for final diamond recovery.

A total of 856 carats was recovered from the 469-tonne bulk sample taken from the Hearne kimberlite pipe in 1999. Including additional diamonds recovered from concentrates, De Beers calculated a grade of 6.8 million tonnes averaging 1.71 carats per tonne valued at US$65 per carat for an implied value of US$111 per tonne. The largest diamonds recovered were 3.37 and 3.16 carats. In total, 40 stones weighed more than 1 carat.

Results from bulk-sampling of the 5034 pipe, together with previous mini-bulk sample and microdiamond results, provided a kimberlite resource of 12 million tonnes averaging a grade of 1.64 carats per tonne to a depth of 300 metres. In total, 1,044 carats of diamonds above a commercial-size, 1.5-mm square-mesh cutoff were recovered from 609 tonnes of drill samples from the pipe. De Beers estimates that the 5034 diamonds are worth an average of US$63 per carat, which translates into an implied value of US$103.50 per tonne. The three largest diamonds recovered weighed 10, 4.9 and 4.85 carats.

Sixty-four carats of diamonds from 184 tonnes of drill sample were recovered from the Tesla pipe for an indicated grade of 0.35 carat per tonne. The largest diamond recovered weighed 2.7 carats. Valuations are currently not available, though previous valuations of the 1998 mini-bulk test sample averaged US$96 per carat. Tesla is the smallest of the four pipes sampled, with a revised resource estimate of 4.6 million tonnes.

Monopros will drill 16 targets on the eastern and central part of the AK claims, as well as a few other targets in the southern part of Kennady Lake. Results from the recently completed ground geophysics, combined with additional airborne geophysics and indicator mineral geochemistry, will help define further targets.

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