Mr. Richard Chetwode reports
DOMINION DIAMOND CORPORATION ISSUES UPDATED RESERVES AND RESOURCES STATEMENT FOR THE DIAVIK DIAMOND MINE
Dominion Diamond Corp. is releasing an updated reserves and resources
statement and an updated reserves-only life-of-mine plan for the
Diavik diamond mine.
Unless otherwise specified, all financial information is presented on a 100-per-cent basis, and references to years are to
calendar years. The company has a 40-per-cent interest in the Diavik diamond mine.
The updated reserves and resources statement adds an additional 3.9
million tonnes containing approximately 13.0 million carats to the
mineral reserves. As of Dec. 31, 2014, the Diavik diamond mine had
18.1 million tonnes of proven and probable mineral reserves containing
53.3 million carats of diamonds (compared with 16.4 million tonnes of
proven and probable mineral reserves containing 46.8 million carats as
of Dec. 31, 2013).
At the A21 pipe, 3.7 million tonnes containing 10 million carats have
been promoted to proven reserve material. In addition, at the A154
North pipe, 240,000 tonnes of inferred resources at depth were
promoted to probable mineral reserve status. Within the remaining
reserve at the A154 North pipe, 500,000 tonnes were promoted from
probable reserves to proven reserves, supported by sampling in the
active mine, which improved confidence for production forecasting.
Routine mine sampling, delineation drilling and mine surveying have
increased forecast grade to the existing mineral reserves at the A154
South, A154 North and A418 pipes.
The tables summarize the mineral reserves and mineral resources at
the Diavik diamond mine as at the end of Dec. 31, 2014, expressed in
millions of tonnes, carats per tonne and millions of carats. The
mineral reserves, set out in the table, account for all depletions
due to production and sampling to the end of Dec. 31, 2014, and the
increase in the reserves as described above. Totals may not add up
exactly due to rounding. The values shown are on a 100-per-cent basis for the
Diavik joint venture.
MINERAL RESERVES AT THE DIAVIK DIAMOND MINE --
DEC. 31, 2014 (100-PER-CENT BASIS)
Proven Probable Proven + probable
mineral reserve mineral reserve mineral reserve
Mt Cpt Mct Mt Cpt Mct Mt Cpt Mct
Pipe
A154N 5.0 2.3 11.5 2.1 2.2 4.5 7.0 2.3 16.1
A154S 0.9 4.0 3.7 0.9 3.4 3.1 1.8 3.7 6.7
A418 3.5 4.1 14.3 2.1 2.9 6.1 5.5 3.7 20.4
A21 3.7 2.7 10.0 --- --- --- 3.7 2.7 10.0
Stockpile 0.02 3.1 0.1 --- --- --- 0.02 3.1 0.1
Totals 13.1 3.0 39.6 5.0 2.7 13.7 18.1 2.9 53.3
The mineral reserves estimate reflects a bottom screen size of one millimetre.
Stockpiles are minor run-of-mine stockpiles that are maintained at or
near the process plant and are available to maintain blending of
kimberlite sources to the plant.
MINERAL RESOURCES AT THE DIAVIK DIAMOND MINE --
DEC. 31, 2014 (100-PER-CENT BASIS)
Measured Indicated Inferred
mineral resource mineral resource mineral resource
Mt Cpt Mct Mt Cpt Mct Mt Cpt Mct
Pipe
A154N --- --- --- --- --- --- 2.0 2.5 5.0
A154S --- --- --- --- --- --- 0.1 3.8 0.3
A418 --- --- --- --- --- --- 0.3 2.4 0.7
A21 --- --- --- 0.4 2.6 1.0 0.8 3.0 2.3
Totals --- --- --- 0.4 2.6 1.0 3.1 2.6 8.3
The mineral resources estimate reflects a bottom screen size of one millimetre.
The mineral resources have reasonable potential to be mined but do not
have mining losses and/or dilution applied at this time, and as such
they represent in situ values. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
Further conversion of resources to reserves is expected in due course as
continuing work plans progress. Specific and more immediate recommendations
include further work to define pipe shape ahead of mine development in
all four project pipes.
Updated mine plan for Diavik diamond mine
The following is a brief overview of the updated mine plan for the
Diavik diamond mine, including current estimates for anticipated annual
production by pipe, with associated operating and capital costs through
2023, and is based on the current reserves.
The Diavik diamond mine -- production
The table shows the planned mining tonnage at the Diavik diamond mine for each orebody. The data are given on a calendar year basis,
beginning as of calendar 2015. These figures do not include rough
diamond stocks held at the mine at the opening of each year, nor does
the model take into account any rough diamond inventory available for
sale that the company currently holds. Another table shows the planned
carats recovered for each orebody.
DIAVIK DIAMOND MINE -- TONNES PROCESSED
(millions) (100-per-cent basis)
Calendar year A154S A154N A418 A21 Total
2015 0.44 0.78 0.86 0.00 2.101
2016 0.44 0.79 0.87 0.00 2.10
2017 0.44 0.80 0.87 0.00 2.10
2018 0.35 0.80 0.80 0.16 2.10
2019 0.17 0.81 0.75 0.37 2.10
2020 0.00 0.88 0.75 0.57 2.20
2021 0.00 0.90 0.60 0.80 2.30
2022 0.00 0.73 0.05 1.52 2.30
2023 0.00 0.57 0.00 0.24 0.81
Total 1.82 7.04 5.55 3.67 18.11
DIAVIK DIAMOND MINE -- CARATS RECOVERED
(millions) (100-per-cent basis)
Calendar year A154S A154N A418 A21 Total
2015 1.63 1.61 3.58 0.00 6.891
2016 1.55 1.56 3.65 0.00 6.76
2017 1.58 1.66 3.62 0.00 6.86
2018 1.26 1.81 3.01 0.48 6.55
2019 0.72 1.89 2.58 1.14 6.32
2020 0.00 2.17 2.30 1.93 6.40
2021 0.00 2.23 1.51 2.13 5.86
2022 0.00 1.80 0.13 3.82 5.75
2023 0.00 1.37 0.00 0.53 1.90
Total 6.74 16.09 20.37 10.02 53.29
(1) The total ore processed and carats recovered for calendar
2015 include 22,000 tonnes of stockpile material containing an estimated
68,000 carats.
In addition to the current reserves, there are 3.1 million tonnes of
inferred resource, of which 2.4 million tonnes (in the aggregate) are
distributed among the lower parts of each of A154 South, A418 and, most
significantly, A154 North. The operator of the Diavik diamond mine,
Diavik Diamond Mines (2012) Inc., currently expects to process
this material as part of its mining operations as it reaches the lower
levels of each pipe. However, inferred mineral resources are considered
too geologically speculative to have the economic considerations applied
to them that would enable them to be categorized as mineral reserves,
and there is no certainty that they will be mined. They have therefore
not been included in the above mine plan. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
The Diavik processing plant has a potential capacity to process over two
million tonnes a year. To supplement mined ore in calendar 2015, Diavik
plans to continue processing old coarse ore rejects material (COR).
The grade of this material is variable but is generally high, as shown by
the results from COR production from 2012, 2013 and 2014, contained in
the table. Based on these historical recovery rates, the tonnage of this
material that is planned to be processed during calendar 2015 would
have produced 290,000 carats from COR. There is no plan to process
COR after calendar 2015.
COARSE ORE REJECTS TONNES AND CARATS --
DIAVIK DIAMOND MINE (100-PER-CENT BASIS)
COR Tonnes Grade cts. Carats
production (000) per tonne (000)
2012 5.3 26.1 139.0
2013 14.4 26.9 388.0
2014 8.2 27.0 220.8
Capital and operating costs
The table shows the currently estimated sustaining and mine development
capital for the Diavik diamond mine from calendar 2015 onward, in
millions of dollars. The table also shows current estimated
operating costs, in millions of dollars, and is based on DDMI's
operating experience, adjusted to present-day dollar terms. Given the
remote location of the Diavik diamond mine, a large portion of the
operating expenditure is fixed, with the major cost items being human
resources and fuel (for both power and equipment).
Development capital at the Diavik diamond mine relates to the
development of the A21 pipe. Expenditure on the development of the A21
pipe in 2015 will relate to crushing costs, pipeline construction, and
initial dike foundation and abutment work in preparation for expected
dike construction during the 2016 and 2017 summer seasons. Pit prestrip
is expected to commence in 2018 following dewatering of the pool within
the dike. The total capital estimate includes an average contingency of
15 per cent.
DIAVIK DIAMOND MINE --
CAPITAL AND OPERATING COSTS (100-PER-CENT BASIS)
Calendar Development Sustaining Total Operating
year capital capital capital costs
2015 66 71 136 398
2016 116 61 177 402
2017 131 62 193 404
2018 79 45 124 407
2019 0 43 43 454
2020 32 32 431
2021 6 6 418
2022 2 2 356
2023 0 0 280
Total 392 321 713 3,550
Not shown in the table are marketing costs, private royalties and
estimated reclamation costs. The Diavik diamond mine pays a Northwest
Territories royalty equal to the lesser of 13 per cent of the value of the
output of the mine or an amount calculated based on a sliding scale of
royalty rates dependent upon the value of output of the mine, ranging
from 5 per cent for value of output between $10,000 and $5-million to 14 per cent for
value of output over $45-million.
Under this mine plan, Diavik will cease mining operation in 2023. The
reclamation costs are estimated at $165-million based on a DDMI closure
cost model that is considered to be equal to or better than others used
in the industry. Most of these closure costs are expected to be
spent between 2024 and 2028, although the full reclamation plan will only
be completed in 2036.
Diamond prices
Using the prices from the company's January, 2015, rough diamond sale and
the current diamond recovery profile of the Diavik processing plant, the
company has modelled the approximate rough diamond price per carat for
each of the deposits listed in the table.
MODELLED DIAMOND PRICES BY DEPOSIT
January, 2015, average price per carat
Diavik ore type (in U.S. dollars)
A154 South $135
A154 North $180
A-418 $95
A-21 $135
COR $45
Qualified person
The scientific and technical information contained in this news release
has been prepared by Diavik Diamond Mines (2012), operator of the
Diavik diamond mine, under the supervision of Calvin Yip, PEng,
principal adviser, strategic planning, of Diavik Diamond Mines (2012), and a qualified person within the meaning of National Instrument
43-101 of the Canadian Securities Administrators.
We seek Safe Harbor.
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