Tahera posts first-quarter loss

With its Jericho diamond project, 420 km north of Yellowknife, N.W.T., in the regulatory review period, Tahera (TAH-T) posted a loss of $4.6 million (or 2 per share) during 2000.

In 1999, the company lost $7.3 million (5 per share). Operating expenses fell slightly to $3.2 million from $3.9 million a year earlier. Expenditures on exploration and development projects also fell — to $4.3 million from $5.7 million.

A June 2000 feasibility study by SRK Consulting concluded that the operation could produce an estimated 3 million carats over an eight-year mine life. The study was based on a probable mining reserve of 2.5 million tonnes grading 1.19 carats per tonne.

Earlier this year, the junior submitted a revised project proposal and draft environmental impact statement for a combined open-pit and underground mine, along with a 1,200-tonne-per-day processing facility, on the land-based Jericho pipe.

Recent exploration drilling by Tahera has uncovered a new kimberlite body at Jericho. It lies under a small lake, 6 km west of the Jericho pipe. The exploration will continue through the summer, following a shutdown during the spring breakup. Tahera intends to spend $2.6 million on exploration at Jericho this year.

Elsewhere, the company has amended its joint-venture agreement with Rio Tinto (RTP-N) subsidiary, Kennecott Canada Exploration.

Under the amended deal, Kennecott can earn a 25% interest in the Rockinghorse and Hood River diamond properties in Nunavut by spending $25 million before 2008. In the first year, the minimum expenditure would be $2 million. In subsequent years it would be $1.5 million. Kennecott can earn a 62.5% interest in the properties by funding the project through feasibility, detailed engineering and the necessary permitting by 2008.

Last year, Kennecott discovered the Tenacity kimberlite on the Hood River property, 110 km north of Jericho. A 558-kg core sample yielded 211 microdiamonds and seven macros. A second kimberlite discovery, Nanurjuk, was made at the southern end of the Rockinghorse claims, 100 km west of Hood River. That body proved barren.

Under the new deal, Kennecott gives its interest in the Ice claims to Tahera, but retains a 1% gross royalty on future diamond production from kimberlites found on the claims before April 23.

The Ice claims cover the large-tonnage Ranch Lake kimberlite, which was discovered in 1993. Kennecott estimates that the pipe, about 75 km northwest of the Ekati Diamond mine, contains 40 million tonnes of kimberlite to a depth of 350 metres. In 199, a mini-test sample indicated that the kimberlite is diamondiferous (5.3 carats derived from 28 tonnes). The grade, distribution and quality of diamonds was poorly defined.

Tahera closed the final stage of the previously announced Edensor financing on April 23. Tahera issued 21.7 million shares to Edensor at 15 apiece for proceeds of $3.25 million.

At the end of 2000, Tahera had $4.2 million in cash.