Dominion Diamond Corp. is proceeding with development of an open-pit mine on the Jay kimberlite pipe at its Ekati operations in Canada’s Northwest Territories. The company’s decision followed receipt of a positive feasibility study and subsequent completion of a revised project schedule and Ekati life-of-mine plan.

The Jay pipe is located beneath Lac du Sauvage, a moderate-sized lake north of Lac de Gras, approximately 1.2 km from the shore. The pipe is 7 km northeast of Ekati’s currently active Misery pit and related infrastructure and 30 km southeast of the main Ekati mine infrastructure.

The Jay feasibility study assumes mining of 44.7 million mt of kimberlite and 136.0 million mt of waste. A recovered mine grade of 1.8 carats/mt will produce an estimated total of 78.6 million carats.

Jay operations will utilize existing Ekati mine infrastructure. Total development capital for the project is estimated at $647 million. Dominion expects to fund the project from existing cash and internal cash flow.

Due to its large size and high grade, the Jay pipe is the most significant undeveloped deposit on the Ekati property. Production from the pipe will extend overall life of Ekati operations to at least 2033.

Dominion Diamond CEO Brendan Bell said, “With a revised project schedule and updated mine plan, this positive feasibility study sets out a clear long-term plan for Ekati. We are very confident in the outlook for the diamond market and believe the mine-life extension provided by Jay positions us well for the future. While work remains to complete project permitting, and identify optimization and cost reduction opportunities as we build Jay, we are very pleased with the results.”

The primary capital development cost for the Jay project will be $329 million to be spent for construction of a water-retention dike and project infrastructure, including crushing, roads and pumping infrastructure. Engineering, design, crusher quality control and quality assurance costs are estimated at an additional $42 million.

Equipment costs are estimated at $86 million, including purchase of eight haul trucks, one hydraulic shovel, four front-end loaders, three production drills, two dozers and other support equipment. The maximum fleet required for construction is estimated at 19 haul trucks, but the capital cost estimate is based on renting 11 additional smaller haul trucks that would not be used during mine operations. Other smaller pieces of mining equipment and specialized dike construction equipment will also be rented during the construction phase.

To support a large truck fleet remote from the main Ekati mine site infrastructure, new maintenance facilities and upgrades to existing facilities will be required at a cost of $15 million.