Snap lake, N.W.T. — The Canadian North comprises a vast region of lakes, rivers, Arctic tundra and, more recently, diamonds. With one mine already established and three others scheduled to come on-stream in the next few years, diamonds have become an important commodity in the region. By 2005, Canada is projected to account for more than 10% of the global diamond production by value.
The Snap Lake project represents several potential firsts: it is the first underground diamond mine in Canada; the first mine owned by De Beers outside southern Africa; and the first time a kimberlite dyke will be mined on anything of this scale.
The project is part of the Camsell Lake property, 220 km northeast of Yellowknife and 90 km west of the Kennady Lake joint venture. It centres on the highly diamondiferous NW dyke, which subcrops on a narrow peninsula on the western shore of Snap Lake. The deposit is a unique kimberlite occurrence: first because it is a dyke, as opposed to a pipe, and second, because it is horizontal rather than vertical. The structure is a gently dipping, intrusive sheet of mainly hypabyssal kimberlite.
The dyke extends beneath the lake at a shallow-dipping, northeast orientation of 4-15 over a confirmed distance of 3.2 km north-south and 3.1 km east-west, to a depth of 1 km. It is generally 2-3 metres thick but narrows to 1.3 metres at the eastern margin.
De Beers estimates indicated reserves for the Snap Lake dyke of 22.8 million tonnes at a minable grade of 1.65 carats per tonne, equivalent to 37.6 million carats. A further 20 million tonnes are categorized as inferred.
De Beers’ revised estimate for Snap Lake was calculated following the completion of last year’s $45-million advanced exploration program, which included the mining of a 6,000-tonne underground bulk sample to confirm the downdip grade of the dyke. A 1,200-metre-long decline was collared on the northwestern peninsula and driven out under the lake to a depth of 320 metres below surface. Some 600 metres of horizontal development completed along the strike of the dyke allowed a dozen widely spaced, 500-tonne bulk samples to be collected.
The samples were processed on-site in a 10-tonne-per-hour dense media separation (DMS) plant. The underground work confirmed a diamond value of about US$100 per carat.
Winspear discovered the Snap Lake NW dyke during a drill program in the spring of 1997. The program was focused on finding the source of diamond-bearing kimberlite boulders that had been discovered by Winspear’s team of geologists on the northwestern arm of Snap Lake in the summer of 1996. The boulders were found in an area where a substantial amount of pyrope garnets and chromites had been recovered from till samples.
Those boulders returned 33 macrodiamonds and 110 micros from 34 kg of material that had been collected from two sample sites. (A macro is here defined as measuring greater than 0.5 mm in one dimension.) Near one of the boulder sites, a 60-kg sample of green, weathered clay material taken from a shallow pit yielded another eight macros. In addition, 20 macros were recovered from seven follow-up till samples down-ice of the boulders.
The 1997 drilling intersected hypabyssal-phase kimberlite dyke material in 13 core holes along a strike length of 800 metres and a downdip extent of 600 metres. The kimberlite intervals ranged from 1.1 to 3.5 metres true thickness, for an average of 2.4 metres. Caustic fusion analysis of the 13 intersections returned 149 macros and 252 micros from 137.1 kg of combined sample. Twenty-five of the macros exceeded 1 mm in at least one dimension, with the largest diamond measuring 1.79 mm.
Constant stone size
The Snap Lake dyke was drilled extensively in 1998 and 1999, followed by a program of surface bulk-sampling in which Winspear extracted 5,996 tonnes of kimberlite from two surface pits set 300 metres apart on the northwestern arm. The bulk sample yielded a 10,708-carat parcel of diamonds larger than 1.18 mm. Comparisons of the kimberlite’s appearance and morphology between the drill holes and surface pits supported the inference by Winspear of a single kimberlite pulse and a constant stone size distribution throughout the dyke.
MRDI Canada, a consultant to Winspear, extrapolated the microdiamond results from 189 contiguous kimberlite drill intersections completed to the summer of 1999 using detailed micro-macro ratios developed from surface bulk sampling to estimate an indicated and inferred resource of 21.3 million tonnes grading 1.97 carats per tonne.
A prefeasibility study by MRDI in April 2000 envisioned a 3,000-tonne-per-day underground operation, with a minimum life of 12 years. This was based on a 12.6-million-tonne minable resource, to a depth of 350 metres, averaging a grade of 1.75 carats per tonne. The capital cost of the proposed 1.8-million-carat-per-year mine was forecast at $269 million, with operating costs estimated at $94 per tonne.
The study projected an after-tax cash flow of $1.2 billion, for a 37.6% discounted internal rate-of-return and a payback period of 2.1 years.
In the spring of 2000, Winspear and Aber embarked on an underground program to determine an overall definitive grade and value of the diamonds. The program was also designed to establish underground mining conditions.
When, last summer, De Beers first announced it was making a takeover bid for Winspear, the junior immediately launched a value recognition program designed to ensure that shareholders understood the full potential of the Snap Lake project. The program included an updated scoping study and stepout drilling.
67 million carats
MRDI prepared the July 2000 scoping study, incorporating an additional 35 kimberlite intersections drilled since June 1999, plus other drill results outside of the potential minable tonnage identified in the prefeasibility study. The potential minable resource was recalculated to a depth of 750 metres below surface and estimated at 39.5 million tonnes grading 1.7 carats per tonne, equivalent to 67 million carats.
Based on the expanded resource, MRDI proposed to double the mine’s planned daily output to 6,000 tonnes. The second-stage expansion would cost a further $230 million and entail the development of a second mining area made accessible by a 700-metre shaft on the north shore of the lake.
Winspear completed a dozen stepout and infill holes on the NW dyke during the summer of 2000. Based on this drilling, the company estimated a total indicated and inferred resource for the NW and SE dykes of 45.6 million tonnes grading 1.9 carats per tonne, or 86.4 million carats, using a minimum thickness of 1 metre.
In February, De Beers filed land and water use permit applications with the Mackenzie Valley Land and Water Board to develop a 3,000-tonne-per-day underground diamond mine at Snap Lake with a projected life of more than 20 years. Annual production is pegged at 1.9 million carats.
De Beers anticipates permitting will last 18 months, with construction scheduled to begin in the fall of 2002. Full production should be reached in early 2004.
Most of the facilities developed for underground development will be expanded; others will be used as-is.
Airstrip
Existing facilities include an 85-person camp, a 10-tonne-per-day process plant, a 3.3-million-litre storage tank fuel farm, a 750-kW diesel generator set and back-up, a processed kimberlite containment area, and a 920-metre-long airstrip. The proposed mine facilities wi
ll include a 350-person camp, a service complex housing administration, machine shops and warehousing, a power generating plant consisting of four 3,300-kW and four 725-kW diesel generators, an expanded tank farm with 28-million-litre capacity, two quarries, and a 2,000-metre expanded airstrip.
The underground mine will be accessible by ramp from the existing single portal. About 75% of the ore will be recovered using room-and-pillar mining methods, followed by paste backfill and pillar removal at most locations to recover the remaining material and completely fill the mined areas. The paste backfill will be a combination of high-strength concrete and thickened processed kimberlite.
Primary crushing of the kimberlite ore will occur underground. A 3,000-tonne-per-day processing plant will treat just under 1.1 million tonnes of crushed kimberlite annually via scrubbing, screening and secondary crushing. The ore crushed to –25/+1 mm is to be concentrated in a DMS plant. The rejects larger than 6 mm are further crushed in a high-pressure roll crusher, with the product recycled in the same DMS unit. The DMS concentrates are treated in a wet recovery section, and the dried final concentrate is hand-sorted using X-ray fluorescence.
The minus-1-mm rejects will be either combined with the coarse (+6 mm) tailings to provide backfill material or disposed in the processed kimberlite impoundment area. About 10.7 million tonnes (47%) of the processed kimberlite over the life of the mine and 442,000 tonnes (50%) of waste rock will be placed back underground. The remainder of the processed kimberlite and waste rock will be disposed on surface in the north pile containment berm.
Chemically stable
The Camsell Lake property is underlain by granites and meta-volcanics typical of the Slave Structural province. Some of the mine waste rock will have the potential to generate acid, as disseminated sulphide mineralization occurs in the meta-volcanics at less than 1%. To prevent the potential for any acid mine drainage, the meta-volcanic waste rock will be covered with paste, processed kimberlite and granite. Testing to date indicates that the kimberlite is chemically stable and will function as a neutralizing medium.
Water will be taken from Snap Lake for potable water and for use in the processing plant. Water collected from the mine and camp, together with rain and snowmelt, will be collected and kept in the mine water clarification pond. After 10 days, it will be discharged to Snap Lake. Initial testing of mine water in December 2000 showed that there are no metals above projected discharge guidelines.
The change in the lake level of Snap Lake will be negligible and will not cause alterations in fish habitat, reports De Beers. The advanced exploration program altered one inland lake, and two ephemeral streams will be directly affected by mine development. No other lakes will be affected by this project.
Caribou use of the Snap Lake area appears to be limited. Aerial surveys suggest that most caribou travel north and west of Snap Lake during migration periods.
During mine operation, on an annual basis, an estimated 2,750 supply trucks will travel the Lupin winter ice road from Yellowknife. The Snap Lake project is expected to employ up to 450 people during construction and create 350 permanent on-site positions.
The proposed mine site is on land claimed by the Dogrib Treaty 11 communities, as well as by the Yellowknives and Chipewyan Treaty 8 communities in North Slave. Of critical importance is the negotiation of socio-economic and participation agreements with the First Nation communities and the Northwest Territories government.
De Beers continues to explore the potential of the Snap Lake property. In February, the major began an optimization study, which, among other things is examining the larger resource base and the possibility of increasing the rate of extraction. The study is also reviewing ore-processing studies, mining methods and infrastructure.
The decline is being extended a further 400-500 metres to obtain further geological, mining and hydrological data in the granite country rock. During a recent site visit, The Northern Miner learned that last year’s underground bulk sampling was done in the host meta-volcanic unit, which accounts for just 10% of the resource. The bulk of the Snap Lake dyke resource is hosted in the granites.
It will take another 6-7 weeks before the decline intersects the kimberlite in the granite, and once there, contractor Procon Mining & Tunnelling will drift 200 metres both north and south along strike. An additional 2,000 tonnes of kimberlite bulk sample will be collected and run through the test plant.
De Beers has more than 20 exploration projects under way in Canada, targeting the Slave Craton of the Northwest Territories and Nunavut, and the Superior Craton which covers parts of Manitoba, Ontario and Quebec. Last year, new kimberlite discoveries were made at the Knife Lake joint-venture project with
In 2001, about $45 million (or more than half the company’s global exploration and evaluation budget) will be spent in Canada. In particular, De Beers is busy evaluating the Victor project in the James Bay Lowlands of northern Ontario.
Victor occurs in a cluster of 19 kimberlite bodies, 90 km west of the coastal community of Attawapiskat. De Beers discovered 16 of these bodies by drilling in the late 1980s. More than 100 kg of core from each of the kimberlites was initially analyzed for microdiamonds, and all but one proved to be diamondiferous. The Victor kimberlite is the largest body in the cluster, comprising one large North pipe and one smaller South pipe. The pipes coalesce at surface and together comprise about 15 ha.
Victor North has been drilled to more than 300 metres of depth, whereas Victor South has been tested to shallower depths. Last year, news that De Beers was undertaking bulk sampling on the Victor pipe sparked renewed interest in the potential of the Superior Craton.
About 5,350 tonnes of kimberlite were extracted from two surface pits, while a further 1,168 tonnes were collected from large-diameter drill holes. The material was processed at a 10-tonne-per-day treatment and recovery plant on site. A total of 2,944 carats of diamonds was recovered from 6,262 tonnes of kimberlite, giving an implied grade of 0.47 carat per tonne.
At a public information session in the spring of 2000 at Attawapiskat, De Beers revealed that a 330-tonne bulk sample collected in 1999 had yielded 107.9 carats of diamonds with a value of US$16,590. The results implied a preliminary grade of 0.33 carat per tonne, a diamond value of US$154 per carat and a kimberlite value of US$50 per tonne.
Data from the large-diameter drill holes showed considerable variation in the concentration of diamonds. Further bulk-sample drilling was conducted on the Victor pipe in early 2001, carrying on from last year’s work. In total, some 10,000 tonnes of kimberlite have been collected from Victor. In addition, mini-bulk samples were taken from several of the other pipes in this cluster.
“The Victor body is geologically complex, and this winter’s work focused on sampling the kimberlite down to a maximum depth of 200 metres,” said De Beers Canada’s senior vice-president, Thomas Beardmore-Gray, at a recent CIBC Investment conference. “Results of this winter’s work will be known late in 2001, at which time we will be able to make a decision on whether the project can advance to a feasibility study.”
Victor does present some considerable challenges. It lies 350 km from the nearest road, so access, at least for most of the year, is limited to helicopter. Between December and March, a temporary, 110-km-long wint
er road is built between the camp and Attawapiskat, where it joins another winter road, to Moosonee, some 240 km to the south. An ice runway provides access to light-wing aircraft during the winter.
De Beers has signed a memorandum of understanding with the Attawapiskat First Nations that includes a commitment to protect the environment and hire local people wherever possible.
The company has several other advanced exploration projects in Canada, including the Gahcho Kue (formerly known as Kennady Lake) joint venture in the Northwest Territories, where a $10-million winter program targeted further bulk-sample drilling on the Hearne and 5034 pipes. De Beers wanted to recover a larger number of diamonds to increase the confidence level of its scoping study model.
Last year, De Beers tabled a study that fell short of the critical mass to achieve a 15% rate of return, based on the defined resource. The study proposed open-pit mining on the 5034 and Hearne pipes, and for a high-grade zone within the top 140 metres of the Tuzo pipe.
Situated 120 km southeast of Lac de Gras, Gahcho Kue is held 51% by De Beers, 44.1% by
In Saskatchewan, De Beers and joint-venture partners
Most of the work will be concentrated on kimberlite body 141 in order to recover a larger quantity of diamonds needed to increase the confidence level of model values and grades. The kimberlites in the Fort la Corne field number more than 70 and individually represent multi-100-million-tonne targets. However, the kimberlites appear to be low grade and are covered by extensive overburden.
On a grassroots level, De Beers holds several joint ventures with juniors, including
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