Ekati life extended by nine yearsPreliminary findings at Fox Deep could keep mine running until 2042
Northern News Services
Friday, September 8, 2017
Dominion Diamond announced on Wednesday that Ekati could live long and prosper, at least for an extra nine years.
Preliminary assessments of the Fox Deep site at Ekati Mine are expected to extend the life of the mine until 2042. - NNSL file photo
Dominion announced the results of the preliminary economic assessment of the mine on Wednesday. According to the assessment, a new cave mining method in Fox Deep pit could extend production until 2042.
"The Fox Deep project would extend the life of the mine by providing 31.3 million tonnes of additional feed to the process plant," stated Jim Gowans, chairman of the board, in an email.
Previously, Fox Deep was in production as an open pit from 2005 until 2014, producing more than 8.7 million carats of diamonds.
Ekati began production in 1998 and was previously slated to close in 2023. The Jay pipe project was approved last summer, which extended the life of the mine by 10 years to 2033, because of its large size and high grade of diamonds.
Todd Hoefer, executive director of the NWT & Nunavut Chamber of Mines, said anything to extend Ekati's mine life will benefit the NWT economy.
"Ekati is the largest mine in the Northwest Territories," he said. "So you can imagine its impact on the NWT economy is hugely significant."
Dominion also owns 40 per cent of the Diavik Diamond Mine, slated to close in 2025.
"So you lose that in 2025, then you've got a big void, a big contribution missing now from our economy," said Hoefer.
"So what do we have to replace that?"
Hoefer said several other smaller projects, like Fortune Minerals' NICO project outside Whati, and Canadian Zinc's Prairie Creek project in the Deh Cho region, are waiting in the wings, but he says they're expected to employ hundreds of workers, while Ekati and Diavik each employ thousands.
"It would take six of those mines to equal a Diavik," said Hoefer.
The start of production at Fox Deep is expected to coincide with the end of operations at the Jay open pit mine.
According to Dominion, as of Jan. 31, Ekati contained approximately 105.4 million carats of total probable reserves. The new mine plan for Fox Deep includes the extraction of 31.3 million tonnes of kimberlite, the rock containing diamonds, from five underground production levels, which could reveal approximately 11 million carats. According to Dominion's latest price book, each carat would sell for US$232.
That's good news for The Washington Companies, which bought Dominion in July for US$1.2 billion.
The Fox Deep project will require new infrastructure, such as ramp portals, fan installations and dewatering lines, as well as 28 kilometres of new underground construction and the purchase of new underground mining equipment. Dominion expects to invest around US$628 million between 2028 and 2034 in development, plus about US$192 million to keep the project going.
US$137 million of that will go to extend the life of the Ekati process plant, power plant and other infrastructure.
The next step is another study to look in more detail at the economic worth of the project, including whether Fox Deep could be developed earlier. That study will be completed by the end of the fiscal year.
Dominion is also considering a supplementary drilling program on the Fox kimberlite to start this winter.