Toronto: Dominion Diamond Corporation reported that the positive results of a pre-feasibility study on the development of an underground operation below the Misery open pit could extend the mine life of Ekati till fiscal 2035. The estimated inaugural probable mineral reserves at Misery Deep are 1.8 million tonnes and 8.7 million carats, Dominion said.
The Misery Main pipe is currently in production as an open pit operation, and is expected to account for approximately 20% of tonnes processed and approximately 60% of carats recovered at the Ekati mine in fiscal 2018. The Misery Deep PFS evaluated the underground development of the Misery Main pipe as an incremental development opportunity to the existing mine plan, Dominion stated.
Initial capital development costs for the Misery Deep project have been estimated at US$ 94 million with incremental post-tax net present value of $92 million (Dominion’s share) and internal rate of return of 40% based on the underground sub-level retreat mining method.
A final construction decision on the project is expected to be taken in June and the application for permits will likely be made in the third quarter of calendar 2017.
Dominion also reported that the Misery Pipe continues to produce outstanding large fancy yellow diamonds, providing an upside to modelled diamond prices. This includes the recently recovered “Arctic Sun” diamond, the largest fancy yellow stone recovered to date in North America at 65.93 rough carats, with estimated polished value of $5 million.
The Company also announced that based on the positive results of the RC drilling program, a pre-feasibility study on Fox Deep was initiated, and the preliminary economic assessment (PEA) on this project is expected in third quarter of fiscal 2018, with a pre-feasibility study scheduled for late fiscal 2018.
Jim Gowans, Chairman of the Board said, “Our exciting high-return Misery Deep project, with a post-tax IRR of 40%, is advancing towards development and is expected to enhance our production profile at Ekati over the medium term. The new mineral reserve at Misery Deep reflects the addition of high grade ore close to our existing mining operation and demonstrates the near- to longer-term upside potential at known kimberlites in the Lac de Gras district.”
