Low diamond prices forces suspension of Nunavut mine

A bullish plan to revitalize Nunavut’s Jericho diamond mine, which last functioned from 2006 to 2008, is now up in the air as Canadian-based Shear Diamonds (CVE:SRM) decided to put the brakes on production only months after it restarted operations.

The reason that drove the company to stop looking for diamonds in its high-grade stockpiles last week was the “continuing weak world diamond prices,” which have dropped from $232 per carat in September 2011 to $218 this September.

Until prices improve, Shear said it will continue to look at the diamond resources at Jericho’s pit and on other properties located close to Jericho, which lies about 350 kilometres south of Cambridge Bay.

Shear holds a 100% interest in its recently acquired Jericho Diamond Mine and surrounding exploration assets, located in the Kitikmeot region of Nunavut.

The junior now plans to seek other financing or, “alternative transactions to move the project and exploration forward, in order to be in the position to proceed to production when diamond markets recover,” said in a press release.

Major mining companies currently conducting exploration work and mine developments in Nunavut include Xstrata, AngloGold Ashanti, Commander Resources, Vale, XingXin Iron Pipes, Areva, and ArcelorMittal.

Image: Jericho mine pit, Wikipedia