De Beers Canada, which operates the Gahcho Kue diamond project in the Northwest Territories, failed to successfully complete the winter drill program, Mountain Province Diamonds, its joint venture partner, announced yesterday.
The $825 million open pit project is a joint venture between Mountain Province, which has a 44% stake, De Beers 51% and Camphor Ventures, which has a 4.9% interest.
The main reason was the impact of the warmer weather, which reduced access to Gahcho Kue via the ice road.
In a statement, Mountain Province�s President and CEO, Patrick Evans said: �The failure of the winter drill program to meet expectations is disappointing.�
The joint venture partners are currently investigating the factors that prevented successful completion of the drill program, which was scheduled this season, Evans said. He said the partners were also changing future work plans.
Since 2000, Beers is responsible for the financing of the capital of the project, giving it the right to increase its stake in the joint venture to 60% following commercial production.
In February 2006, Mountain Province retained UK-based WWW International
Diamond Consultants to provide an independent valuation model for the Gahcho Kue diamonds, which should be completed soon, the junior miner said.
The Gahcho Kue mine is expected to have a life of 20 years from start of construction to closure and will produce an average of three million carats annually over 15 years of operations.
The environmental assessment process for permits needed to build and operate the mine was proceeding according to schedule, the company said.
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