Diavik project enters feasibility home stretch

Having incurred more than $80 million in expenditures on a 2-year prefeasibility study, the Diavik diamond project in the Northwest Territories is entering the formal feasibility and permitting phase.

Diavik Diamond Mines, a Canadian subsidiary of Rio Tinto (RTP-N), holds a 60% interest in the project and is acting as operator. Aber Resources (ABZ-T) owns the remaining 40%.

The feasibility study will determine the estimated capital cost of constructing a mine and the schedule for development. The study will also recommend a mining method, the options being open-pit, underground or a combination of the two.

The project is focused on the development of four diamond-bearing kimberlite pipes — A-154 South, A-418, A-154 North and A-21 — that together constitute a resource estimated at 37.3 million tonnes.

The four pipes lie beneath Lac de Gras in shallow waters close to shore. Each pipe is delineated to a depth of 400 metres.

Underground bulk sampling, aimed at determining the value of the diamonds, was carried out on the A-154 South and A-418 pipes. An interconnecting decline intersects A-154 South at a depth of 155 metres below lake level, whereas A-418 was intersected at a depth of 145 metres below lake level.

A 2,900-tonne bulk sample from A-154 South yielded 12,800 carats. A parcel of 5,658 carats, representing 44% of the recovered stones, was evaluated by six independent diamantaires in Antwerp, Belgium. The diamonds were deemed to be worth an average of US$67 per carat, which, when the entire bulk sample is taken into account, translates into a value of US$63 per carat. (These values are based on market conditions in early 1997.)

Aber reports that the diamantaires were unanimous in their view that the diamonds were attractive, of high quality and readily marketable.

The A-154 South pipe hosts a resource of 11.4 million tonnes grading 4.6 carats per tonne. The value of the pipe is estimated at US$290 per tonne.

Valuations on an 8,275-carat parcel of diamonds recovered from a 3,000-tonne underground bulk sample of A-418 were recently completed by a group of eight Antwerp-based experts. The diamonds were found to average US$56 per carat.

Aber states that the predominant portion of the value is in larger, high-quality stones. The largest gem-quality diamond recovered from A-418 was 8 carats.

Diamonds from A-418 are said to have the same attractive characteristics as those recovered from the A-154 South kimberlite, 750 metres to the northeast.

.SDistinct units

Unlike the A-154 South pipe, which is relatively homogenous, A-418 consists of several distinct geological units that vary in their diamond content. The upper portion of the pipe is significantly richer, both in grade and value.

With a resource of 8.9 million tonnes grading 3.8 carats per tonne (including 1.4 million tonnes in the upper part of the pipe grading 5.6 carats per tonne at US$69 per carat), A-418 averages a value of US$213 per tonne. An additional 10% of inferred resource exists below a depth of 400 metres.

The two other pipes, A-154 North and A-21, have undergone mini-bulk sampling by large-diameter core drilling. The A-154 North pipe is 250 metres northeast of A-154 South and estimated to contain a resource of 11.5 million tonnes grading 1.9 carats per tonne. The pipe also contains an additional 10% of inferred resource.

Ten large-diameter drill holes in pipe A-154 North recovered 71.7 tonnes of kimberlite, which yielded 156 carats. Those stones are valued at US$35 per carat by CRA Diamonds, a division of Rio Tinto.

The A-21 pipe is 5 km southwest of pipe A-154 South. It was the first of the major Diavik pipes discovered but, because of its distance from the 3-pipe cluster, is the least-defined in terms of tonnage and grade.

Pipe A-21 contains a resource of 5.5 million tonnes grading 2.7 carats per tonne. The six large-diameter core holes drilled into the pipe returned 90 carats of diamonds from 30.5 tonnes of material. CRA estimates the diamonds are worth US$38 per carat.

Aber’s consulting diamantaire, Overseas Diamonds N.V., notes that the larger stones recovered from A-21 and A-154 North are comparable in color and quality to the A-154 South and A-418 diamonds.

The Diavik project is 300 km northeast of Yellowknife. Geophysical surveys, surface sampling and drilling all began in 1992. The A-21, A-154 South and A-154 North pipes were discovered in 1994, whereas the A-418 was found in 1995.

As of April, a total of 45 kimberlite pipes had been discovered on the property.