Diavik Gets Funding Approval for Underground Mining Phase

Surface mining at the Diavik diamond mine is expected to cease in 2012. Majority owner Rio Tinto recently approved funding
for the mine to proceed with an underground mining phase that will have an overall capital cost of at least $787 million.
Construction of a decline for underground exploration began in early 2005. Photos courtesy of Diavik Diamond Mines Inc.
Diavik Diamond Mines announced in late November that its co-owner, Rio Tinto, approved a $563-million investment in the underground mining phase of the Diavik mine. The additional funding, which brings the total investment to date in the underground mine to $787 million, will be funded by the two Diavik joint venture partners—Rio Tinto (60%) and Harry Winston Diamond Corp. (40%).

Under the current life of mine plan, diamond production from underground would begin in 2009 and continue beyond 2020. Open-pit mining is expected to cease in 2012, at which time Diavik would become an all-underground mine. Diavik’s total mine life remains within the 16 to 22 years projected in the original feasibility study of 1999.

To support underground operations, Diavik will construct new surface facilities including a crusher and paste backfill plant, expand its water treatment and power generating plants, and build ancillary facilities including fuel and cement storage, and additional accommodation facilities. Approximately 20 km of underground development works will also be established to bring underground mining into production. The project’s $563 million cost will be spent over the next two years, adding to the $224 million invested in 2006-07 for the underground feasibility studies and related capital projects.

The Diavik mine, located 300 km northeast of Yellowknife, Northwest Territories, is an unincorporated joint venture between Diavik Diamond Mines Inc. (DDMI) (60%) and Aber Diamond Mines Ltd. (40%). Both companies are headquartered in Yellowknife, Canada. DDMI is a wholly-owned subsidiary of Rio Tinto, and Aber Diamond Mines is owned by Harry Winston Diamond of Toronto, Canada. DDMI is the operator of the project.

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