Mining and exploration review north of the 60th parallel

Shining Example

Diamond activities spurring economic growth in Canada’s dynamic north

10 - DPS Diamonds

Many people are aware of historic diamond activity in Africa, and the world-famous gems which have been discovered on the “Dark Continent,” such as the “Hope Diamond,” and the “Star of India.”  Few however are aware that another hot-bed of diamond activity is right here in Canada’s Northwest Territories (NWT) where three mines are in active production and further exploration and discovery work continues at a high level.

Actually, diamonds were first discovered in Canada on an accidental basis such as the discovery of a diamond in glacial debris in Ontario in 1863, and a 33-carat diamond being found during railroad construction near Peterborough, Ontario in 1920.  Later, in the 1960s, a discovery of small diamonds was reported near Prince Albert, Saskatchewan.

It was the discovery of diamond indicator minerals along the NWT/Yukon border in 1981 that finally informed the mining community that diamond exploration in Canada’s Arctic regions could generate significant discoveries. By 1989, exploration efforts had significantly intensified, resulting in the discovery of a major area showing a high concentration of indicator minerals in the Lac de Gras area northeast of the NWT capital city of Yellowknife, suggesting the presence of diamondiferous kimberlite pipes which could possibly result in economically viable diamond production.

A major landmark event in NWT diamond mining history took place in October 1998, when BHP Diamonds Inc/Dia Met Minerals announced the official opening of Canada’s first diamond mine, the Ekati Diamond Mine in the Lac de Gras area.  The other two productive mines are the Diavik and Snap Lake.

10 - Diavik MineDiavik Mine
The Diavik Mine is located some 300 kilometres northeast of Yellowknife, and has evolved into a joint partnership between Diavik Diamond Mines Inc. and Aber Diamond Mines Ltd.  Both companies are headquartered in Yellowknife with Diavik holding a 60 per cent interest in the mine and Aber 40 per cent.  Diavik itself is a wholly-owned subsidiary of Rio Tinto PLC of London, England, while Aber is a wholly-owned subsidiary of their parent company, Aber Diamond Corporation of Toronto.  Aber eventually changed their name to Harry Winston Diamond Mines Ltd.

Claim staking by Aber began near Lac de Gras in 1991, and the four mineral claims covering the Diavik project kimberlites were staked in late 1991.  A joint venture agreement was formed in early 1992 between Aber and Kennecott Canada and development work began in earnest.  In the spring of 1992 a property-wide helicopter-borne magnetic and electro-magnetic survey was completed; by mid-1992 glacial till sampling was conducted; and by 1993 an initial drill program took place.

Eventually, four kimberlite bodies were determined to have genuine possibilities, including A21, A154 North, A154 South, and A418. Specific kimberlite delineation and grade evaluation drilling took place in 1995, and this was followed by a bulk sampling program at A154 South in 1996. By 2000, sufficient data had been collected for the partnership to report resources at Diavik of 27.1 million tonnes grading 3.9 carats per tonne, containing 106.7 million carats of diamonds.

Construction of production facilities began and the mine opened in 2003 as a near-surface open pit operation, eventually transitioning over to underground operations by 2012.  Aside from other production advantages, underground mining also allows operations to continue without concern for the bitterly cold mid-winter surface temperatures. The estimated future mine life is approximately 10-years.

The Diavik Mine has had a considerable economic impact in this remote area just south of the Arctic Ocean where the only roads are mid-winter ice roads for transporting heavy equipment and, other than runways associated with particular projects; airplane travel is limited to helicopters and float planes. Diavik is providing significant training, employment, and business opportunities to the NWT.  The partnership has committed itself to hiring 64 per cent of its staff from the NWT, and 40 per cent of their staff is designated to come from Aboriginal communities.

10 - AERIALS EKATI - (BROSHA) July-09 010Ekati Mine
The Ekati Mine is also located in the Lac de Gras region northeast of Yellowknife and faces many of the same problems as described for Diavik, including remote location, short time frame for mid-winter ice roads and heavy reliance on air transportation.

Ekati was the first new Canadian diamond mine to enter active production which began in 1998.  The initial discovery of indicator minerals for diamonds was made in 1991 by two geologists, Chuck Fipke and Stewart Blusson and exploration, development, and subsequent production construction led to the initiation of mining in 1998.  At that time, Dia Met Minerals was a driving force in advancing the Ekati Mine, but they sold their interests to mining giant BHP Billiton and that company ultimately formed a joint interest with the discovery geologists with BHP having 80 per cent interest and Fipke and Blusson controlling 20 per cent.

Production at Ekati remained at high levels and from 1998-2009, and a total of 45,000,000 carats of diamonds were recovered during those years and by 2011 that total had exceeded 50,000,000 carats. Production from Ekati represents three per cent of rough diamonds entering world markets by volume and 11 per cent by value.  These recoveries have taken place at six open pits, but recoveries began to subside in recent years and the joint venture is now working toward increasing recoveries from underground mining, particularly beneath the Koala Pit.  Present indications point to an active mine life through 2018 based on contributions from two particular projects.
In the first case, a new expansion of the Misery open-pit began in 2011, and is expected to enter production lasting for two years in 2015.  In addition, Koala underground production, which began in 2007, is expected to last for 11-years.

The Lac de Gras kimberlites are quite unique in their similarities to kimberlite pipes in South Africa and Russia in the fact that they are overlain by small lakes.

The Ekati Mine has been a major contributor to the NWT economy since initial development began.  A total of approximately $5 billion has been expended for equipment, transportation, salaries, and other services over the past 20-years, and about 4$ of that amount has gone directly to northern and Aboriginal businesses.

Snap Lake Mine
The Snap Lake Mine, NWT’s newest such venture, is unusual for several reasons.  It is diamond giant DeBeers’ first producing mine outside of Africa, it is in an area outside of other NWT diamond mines, being located only 220 kilometres from Yellowknife, and it is Canada’s first entirely underground diamond mine.

The Snap Lake diamond-bearing ore body is also somewhat unique.  Where most other diamond mines are located within kimberlite pipes, the Snap Lake ore body is in the form of a 2.5 metre thick ‘dyke’ that dips an average of 12 to 15 degrees from the northwest shore down under the lake.

Snap Lake was originally discovered in 1997, and DeBeers Canada bought the project in 2000.  Exploration and development followed and the company was able to obtain permits to build and operate the mine in May 2004.  A period of engineering and pre-development design then took place, followed by the initiation of production construction in 2005.  De Beers found, as have other mining companies, that shipment of the heaviest equipment and supplies could only be performed on an economic basis via trucks utilizing an ice road from Yellowknife for six to eight weeks per year.  All other access to the project has been via air.

Construction and operation of the Snap Lake Mine through 2011 has resulted in total expenditures of just under $2 billion.  Of that amount, $1.29 billion has been spent with northern business, including over $750 million with Aboriginal enterprises.  The mine’s official opening took place on July 25, 2008, and the estimated mine life is on the order of 20-years.  Total employment at Snap Lake is about 600 with 250 involved in actual mining operations.

DeBeers Canada has made a particular effort to communicate with the local native populations and has signed four separate Impact Benefit Agreements with the Yellowknives Dene First Nation; Ticho Government; North Slave Metis Alliance and Lutsel K’e and Kache Dene First Nations.

Diamond mining has made an important contribution to the NWT, both economically and socially, and as long as diamonds are an intensely desirable commodity, activity is likely to continue to provide strong support to this fascinating and remote region of the Dominion of Canada.  Many experts believe in the future of “the true north strong and free,” and diamond mining is likely to play an important role in that future.

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