Armed with a positive feasibility study,
Earlier this year, a revised project proposal and draft environmental impact statement (EIS) for the land-based Jericho kimberlite pipe was submitted to regulatory authorities in Nunavut.
The feasibility study, completed last summer by SRK Consulting, concluded that about 3 million carats could be produced over the project’s 8-year mine life. The study was based on open-pit mining of 1.9 million tonnes of reserves for the first four years, followed by underground mining of 614,000 tonnes of kimberlite. The underground reserves would be accessible by a decline from the open pit.
Roughly 80% of these reserves — about 2 million tonnes at a recovered grade of 1.29 carats per tonne — are hosted in the high-grade Central lobe. The Northern lobe, which hosts 500,000 tonnes at a recoverable grade of 0.77 carat per tonne, will be processed at the end of the mine’s life.
SRK’s base-case study values Jericho’s diamonds at an average of US$75 per carat, though valuations by WWW International Diamond Consultants (WWW) rang in at US$88 per carat. Tahera notes that the project has an internal rate of return of 50.7%, based on the results of the modelled valuation study performed by WWW.
Exploration work is continuing at the property, with ongoing drilling aimed at finding and testing additional kimberlites near the Jericho pipe. On the permitting front, the Nunavut Impact Review Board (NIRB) will remain the lead agency responsible for the project’s environmental assessment review. The Department of Indian Affairs and Northern Development (DIAND), together with other federal departments with jurisdictional responsibility for the project, has agreed to the formal NIRB review. This decision paves the way for a streamlined permitting process that provides all stakeholders with the opportunity to comment on the draft EIS.
Joseph Gutnick became Tahera’s executive chairman late last year. The Australian financier headed the team responsible for the discovery and development of three mines in Australia, namely, the Bronzewing and Jundee gold mines and the Cawse nickel operations.
Tahera remains optimistic that commercial diamond production will begin in 2003, providing the new territory of Nunavut with its first commercial diamond mine. Capital costs are estimated at $44.5 million for the open-pit operation, plus a further $8 million for the underground operation.
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