Gahcho Kue on track, companies reassure investors

Mountain Province Diamonds, one of the companies behind the planned Gahcho Kue mine in Canada, reassured investors this week that the massive diamond project is indeed on track, contrary to some recent media reports.

Last week Reuters wrote that De Beers CEO Phillipe Mellier had said in an interview that first production could be delayed to early 2017 due to shipping delays.

"Mellier said he expects production to start at the end of 2016 or the beginning of 2017," Reuters wrote.

De Beers owns 51% of Gahcho Kue.

Mountain Province Diamonds, which owns the remaining 49%, wrote on Monday that "[a]s at the end of February 2014 the overall project was 17 percent complete and first production remains on schedule for Q3 2016."

The company also refers to a statement issued last week by De Beers in which the majority owner wrote that "there has been no change to the project plan … we are still aiming for first production during H2 2016. Both partners are happy with the progress to date."

Located in the Northwest Territories, Gahcho Kue is the largest new diamond mine under development in the world.

The Federal government approved the project last October but the joint venture is still waiting on a water license and a full land use permit. Mountain Province says it expects to receive these permits during the second half of 2014.

At peak construction, the project will employ about 700 people. About 120 workers are currently on site.

So far the companies have delivered 670 truckloads of equipment and supplies to the site using the 2014 ice road, which will close at the end of March. After the road closes, the miners will rely on an airstrip which should be ready by mid-2014.

Throughout the winter shipments of cement, steel, and other materials were delayed due to regulatory restrictions. In January Mountain Province wrote that it was "exploring opportunities to mitigate the impact on the project schedule."

"In the event that appropriate mitigation measures are not found, mechanical completion of the process plant and cold commissioning will occur in Q2 2016, and first production in Q3 2016," the company wrote at the time.