De Beers studies [Ontario] Victor extension as end of mine life looms (Northern Miner – September 12, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

With a mine life that ends in 2018, the ore is running out at Ontario’s only diamond mine — De Beers’ Victor mine, 90 km west of Attawapiskat.

The open-pit mine, which began production in 2008, produces around 600,000 carats of high-value diamonds a year from a single 15-hectare kimberlite. But with 15 other diamond-bearing kimberlite pipes at the project, there is potential for an extended mine life at Victor.

De Beers has already started an environmental assessment on the Tango Extension kimberlite, the most promising of the other pipes in the Victor cluster. Situated about 6.5 km northwest of the Victor mine, the company believes it could extend Victor’s mine life by seven years.

The company is studying the potential to mine Tango Extension as an open-pit operation at a rate of 3 million tonnes per year. However, the project is not yet economic. The Tango Extension kimberlite is smaller, lower-grade, and contains less valuable diamonds than Victor.

While Victor is a low-grade mine at around 0.23 carat per tonne, its diamond values are among the highest in the world at more than US$400 per carat. So far, samples from Tango Extension indicate the quality is good, but they won’t fetch the same kind of price per carat as Victor diamonds, says Tom Ormsby, De Beers Canada’s director of external and corporate affairs,

“We do know at this point the diamonds are not going to be at the same level as Victor — few in the world are,” Ormsby said.

“By the standard that Victor set and the costs that are associated with remote mining where we are, right now the mine is marginal at best.”

Two key programs that are planned for early 2015 should give the company a clearer picture of the Tango Extension’s economics.

One is a bulk sample that will give De Beers a better handle on diamond values and allow it to draw up a reliable revenue model.

“The trench sample will give us a much larger parcel of diamonds and then we’ll have a better idea of what the revenue will look like,” Ormsby says.

The bulk sample will be the first for the Tango Extension kimberlite.

The other program is a hydrogeological survey that will provide data on the potential cost of dewatering the kimberlite. The project lies in the James Bay lowlands — one of the world’s biggest wetlands.

“We have to carry out a more detailed hydrogeological survey on water flow underground, then we have to do the math on what that would cost to keep it dry,” Ormsby says.

“Dewatering wells and the related power costs to keep them running are quite substantial, so an excessive amount of wells will impact the economics.”

According to De Beers’ project description, more than 200,000 cubic metres of groundwater per year would need to be extracted to mine the kimberlite.

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