Each one in plain English, with the numbers worked through for a shareholder.
14 Sept 2010resource reserve update▲ GoodMajor
On 14 September 2010 the company reported receiving the final draft of the JDS feasibility study, which is under up to 90 days of internal review by the partners and may change. Preliminary results: IRR above the 15% the joint venture agreement requires to support a decision to develop; an 11-year base-case mine life at about 4.5 million carats a year; initial capital of C$550M-C$650M; and cash operating cost of C$48-C$60 per tonne. The company plans to file the environmental impact statement with the review board before year-end. The 15% IRR also bears on the first C$10M repayment to De Beers, which the July 2009 agreement ties to a feasibility study with a 15% IRR or a decision to build (an inference).
On 25 January 2010 the company said the feasibility study is progressing satisfactorily, on budget and on schedule for mid-2010 completion. A draft project description (for guidance, subject to partner approval) shows about 3 million tonnes of ore a year, a roughly 12-year open-pit life and about 4.5 million carats a year; this is a different, more specific plan from the earlier 3 Mct/yr over 15 years. The environmental impact statement is being finished in parallel. Shares outstanding are 66,631,746.
On 1 September 2009 the joint venture appointed JDS Energy and Mining to carry out the Gahcho Kue feasibility study, which has started. It is expected to take about twelve months with a budget of about $10 million. This follows the July agreement under which the company pays the study cost.
A Form 6-K filed 12 June 2009 attaching the full AMEC technical report and consents behind the 26 May resource estimate. The text provided contains only the cover and exhibit list, so it adds no new figures beyond that estimate.
On 26 May 2009 the company released an updated resource estimate for Gahcho Kue prepared by AMEC: 50.5 million carats indicated (30.2 Mt at 167 carats per hundred tonnes) and 10.3 million carats inferred (6.0 Mt). This is a large change from the 2007-08 figures (about 23.6 Mct indicated, 22.9 Mct inferred), now with most of the stone in the indicated category; the filing says the data now supports a feasibility study that the joint venture partners are considering. The prices used to test economic prospects are mid-2008 prices with a 20% uplift (US$113/ct for 5034, $76/ct Hearne, $70/ct Tuzo), and resources are not reserves.
On 2 July 2008 the company announced a 25.13-carat gem-quality diamond recovered from the 2008 Tuzo bulk sample, independently valued at about $17,500 per carat (about $440,000), which it calls the largest gem-quality diamond from a Canadian drill program. The Tuzo large-diameter program (nine holes, about 1,390 m) finished in March 2008 and diamond recovery is under way, with overall results due in the third quarter of 2008. One stone does not set the grade or value of the deposit, so those results are what matter.
On 6 November 2007 the company reported full 2007 drilling results: 26 Tuzo holes (8,576 m) and five 5034 East Lobe holes (1,486 m), with four of six deep Tuzo holes ending in kimberlite. The operator's volume estimate for Tuzo inferred kimberlite rose 17% (4,337 to 5,080 thousand cubic metres), 5034 indicated fell 4% and 5034 inferred rose 13%; updated resource models are expected in early 2008. The 5034 North Lobe large-diameter bulk sample ended in October with five of six planned holes done and less kimberlite recovered than expected, though the operator is described as confident it will still support an upgrade to indicated.
On 24 April 2007 the company said the 2007 Tuzo winter drilling (26 holes, 8,400 m) is finished, with preliminary results showing the kimberlite flaring to depth and four of six 400 m holes ending in kimberlite. The 5034 North/East lobe holes confirmed continuity at about 150 m, so the joint venture plans a summer 2007 large-diameter drilling program at the North Lobe (five to seven holes, about 1,500 m, about 60 tonnes for a 100-carat sample). This follows the March update and the plan to shift bulk sampling earlier than 2008; the company also says compulsory acquisition of the rest of Camphor has started, leading to a 49% venture interest.
Preliminary 2007 winter drilling shows the Tuzo pipe flaring to depth, a material increase in volume to 300 m depth according to the company, and geology of the 5034 East and North lobes looks continuous. This cuts the sample needed from the North Lobe to 100 carats (from 500 previously estimated), and the venture is considering large-diameter drilling in summer 2007 instead of winter 2008. It also notes a take-over bid for the rest of Camphor was mailed on 23 February 2007.
A bundle of releases from Dec 2006 to Jan 2007. The main points: a proposed C$30M 2007 work program (26 Tuzo core holes, 8,400 m); bulk sampling at Tuzo and 5034 North Lobe delayed to 2008 because no contractor would do the large-diameter drilling; the board said it was 'deeply concerned' and referred to the 'failure of the 2006 bulk sampling program'; De Beers agreed to a standstill (no more shares or unsolicited bid) until 31 Dec 2007 while holding about 5.5%. The 11 January release gives 2006 drill results described as in line with expectations (table truncated in the text provided).
Interim results of the 2006 drilling: all 31 core holes were completed, including two extra Tuzo holes added because results were described as encouraging. Two Tuzo holes hit kimberlite earlier than expected, and most micro-diamond results were still pending. The release says the project was referred to an Environmental Impact Review in June 2006 and De Beers sought judicial review in July 2006, with full production still projected for 2012.
A summer drill campaign started at Gahcho Kue, run by De Beers, to finish four core holes left over from the 2005/06 winter program: two in the Tuzo pipe (plus one for geotechnical purposes) and one in the 5034 North Lobe. It is routine follow-up drilling on the existing project.
