Resource World Magazine

o c t o b e r / n o v e m b e r 2 0 1 5 www.resourceworld.com 31 Gras, NWT. Their discovery became the Ekati Mine. It caught the attention of diamond giant, De Beers, and two other mining giants: BHP Billiton and Rio Tinto. Lac De Gras became the centre of a dia- mond rush that resulted in three diamond mines: Ekati, Diavik and Snap Lake. De Beers then bought up Snap Lake and devel- oped the Victor diamond mine in Ontario. Meanwhile, Canada has earned the third place in global diamond producers by value of diamonds produced; Botswana is first and Russia second. Since that original discovery in 1991, billions have been spent globally to find more diamonds. After an early period of Canadian exploration success in the 1990s, there has been little success in diamond discoveries. As a result, investor interest has waned. However, there are some prom- ising prospects. This article will examine some significant players. Dominion Diamond Corp. [DDC-TSX] – Performance YTD -26% Canada's leading domestic diamond company was formerly Harry Winston and, previous to that, Aber Diamonds. Dominion Diamond has ownership in two major producing diamond mines about 300 km northeast of Yellowknife. The company operates the 88.9% owned Ekati Mine as well as a 65.3% interest in the surround- ing areas containing additional reserves and resources), and also owns 40% of the nearby Diavik Mine. DDC is the world's third largest producer of rough diamonds by value. The company is evaluating the massive Jay Pipe, the largest diamond resource in North America – 85 million carats of probable reserves. The grade is a robust 1.9 carats/tonne. Of some concern is the diamond value, which according to their latest investor presentation is US $64/carat. In 2015, carat production from the Ekati Miine is expected to be lower than the last five-year average as the mine transitions to production from the Misery, Pigeon and Lynx open pits. Higher carat production is expected to return but the carat value will be lower. Lucara Diamond Corp. [LuC-TSX] – Performance YTD -20.69% Lucara's operation is in Botswana. It is an interesting contrast to the high cost of operations in Canada in that their mine grades about 0.15 carats/tonne. In Canada that would be a non-starter. Lucara has had outstanding success, however, due to the fact that they have found a sig- nificant number of exceptional diamonds from their Karowe Mine including 336, 342 and 204-carat diamonds. In three years they have produced more than 12 diamonds that sold for more than $5 million each. This has resulted in strong cash flow. Their ability to produce exceptional diamonds at a fairly regular rate is remarkable. De Beers Diamonds (a subsidiary of Anglo American) De Beers has been synonymous with dia- monds for well over a century. From their roots in South Africa to their current global operations, De Beers has been the leading company in diamonds with their tagline "A diamond is forever". In Canada, De Beers currently has two operating mines –Victor in Ontario and Snap Lake in the NWT. They are also constructing a third mine with their JV partner Mountain Province in the NWT. Mountain Province Diamonds Inc. [MPV-TSX; MDM-nYSE MKT] – Performance YTD -18.18% MPV's Gacho Kue (a joint venture MPV 49%/De Beers 51%) Mine, currently under construction, is the world's largest and rich- est undeveloped diamond deposit. Their mine is slated for production in the second half 2016. The original discovery was made in the mid 1990s and was solidified when De Beers Canada (then called Monopros) expanded the resource by finding four kim- berlites in 1997. With a share price in the $4.15 range, MPV trades at the same price it was nine years ago. However, the differ- ence today is that in one year, according to company estimates, cash will start to flow to the tune of $2.00 per share in 2016. The Ekati diamond mine of Dominion Diamond 300 km northeast of Yellowknife, Northwest Territories. Photo courtesy Dominion Diamond Corp.

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