Dominion Diamond (TSX, NYSE:DDC) the world’s third-largest rough producer by value, will forge ahead with plans to open up a new mine in Canada’s Northwest Territories, after positive results from a pre-feasibility study, announced Monday.
Canada’s largest publicly traded diamond miner, which is also working on an extension of its iconic Ekati mine, said the Sable Project — located 17 kilometres northwest of Ekati’s existing infrastructure — will require construction of an access road, site infrastructure, and sedimentation pond allowing Sable Lake to be dewatered ahead of the start of pre-stripping operations.
Fully permitted, Sable has construction planned to begin as soon as the ice road opens, with mining and processing projected to begin by 2019.
Sable vs Jay
Unlike Dominion’s other project in the area — dubbed the Jay pipe — Sable would make little difference to Ekati’s lifespan, which is set to run out of diamonds by 2023. Jay is expected to add about 10 years to Ekati’s productive life.
However, the two pipes combined could keep the mine’s processing plant working at full capacity until 2033, even with Sable shutting down in 2027.
Key financial details from the study includes mined recovered carats at 10.1 million, diamond recovery of 94%, initial development capital of $142 million and post tax net present value of $137 million with a mine operational life of 10 years. The base case diamond price is at $140 per carat.
In a separate announcement, Dominion announced the appointment of a new director. David S. Smith will assume the role of Chairman of the Audit Committee in May 2016.
Last month, the man who co-founded Dominion Diamond — Robert Gannicott — said he was leaving the company for personal reasons.
Shares in the company were trading down Monday in both Canada and the U.S. The stock was down almost 2.8% to $15.38 in Toronto and more than 2.5% to $11.21 in New York at 3:43 pm ET.