The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Tahera to spend $11M by '08 to earn 50% interest in property; De Beers will operate larger projects
International diamond giant De Beers and Canadian junior mining company Tahera Corp. have signed an agreement to jointly explore and develop 36,000 hectares of de Beers' land adjacent to the Jericho diamond project in Nunavut.
According to the terms of the agreement, Tahera will spend $11 million by 2008 to earn a 50 percent interest in the property. The agreement has been structured so that each company can act as operator, as the development grows, depending on the size of the project.
"There is a natural fit between De Beers and Tahera Corp. for this property and this partnership seeks to optimize opportunities for both parties through the synergies we have identified," said Richard Molyneux, president and CEO of De Beers Canada. "The significance of this agreement is its flexibility regarding who will be the operator and how the product will be marketed."
Each company can raise its interest in individual development projects depending on the project value. For projects of C$750 million or less, Tahera will be the operator and can increase its interest to 75 percent by making certain payments to De Beers.
For larger-scale projects, De Beers will be the operator, and coordinate the construction of a processing plant. De Beers can increase its interest to 70 percent by making payments to Tahera.
Four kimberlites on property
The property, 14 kilometers west of Jericho, has four diamondiferous kimberlites, including the sizeable Muskox pipe.
"We believe that this partnership with Tahera is the most efficient means to move these kimberlite discoveries forward and this will put us firmly on the map with project development in Nunavut," Molyneux said in a statement.
De Beers' land holdings in Canada total 163,000 square kilometers, with 139,000 kilometers in Nunavut. Two mining projects are under development, Snap Lake in the Northwest Territories and Victor in Northern Ontario. The company will spend 43 percent of its US$92 billion global exploration budget in Canada.
In that vein, De Beers is also launching a C$1 million exploration program Nunavut's Kivalliq region. The company has already held public meetings in Rankin Inlet and Chesterfield Inlet.
Project Manager Paulo Pereira said in a release the company will be taking 3,000 samples from two areas north of Baker Lake this summer. "That's the new frontier for diamond exploration in Canada," he said.
Meanwhile, Tahera's $50 million Jericho Mine - the first diamond mine in Nunavut - has moved a step closer to reality. The Ministry of Indian Affairs and Northern Development has accepted the Nunavut Impact Review Board's report on the proposed Jericho Mine. Tahera now moves to the permit stage.
The mine, about 350 kilometers southwest of Cambridge Bay, is expected to employ up to 175 people during mine and plant construction, in the open-pit and underground operations as well as in its processing plant. The company hopes to have Inuit make up almost two-thirds of its staff.
Company officials say the mine could be operational as early as 2005.
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