Dominion Diamond has announced positive results from a preliminary economic assessment (PEA) of the Sable kimberlite pipe deposit on its Ekati mine property in Canada’s Northwest Territories. Sable is a fully permitted, undeveloped deposit, with a rapid development timeline and potential capital and operating synergies with Ekati’s forthcoming Jay project.

The Sable PEA evaluated the development of Sable concurrently with Jay, where construction has been planned to start in the second half of 2016. Sable would provide an additional high-value ore source for the Ekati mine, allowing for optimal mine sequencing and operational flexibility to maximize the value of the Ekati operation.

The Jay pipe is approximately 30 km southeast of the main Ekati mine infrastructure. The Sable pipe is located beneath Sable Lake, 17 km north-northwest of the main mine infrastructure. The Sable project will require construction of an access road, site infrastructure, and a sedimentation pond allowing Sable Lake to be dewatered ahead of the start of pre-stripping.

Operating parameters for the Sable project include mining of 104.4 million mt of waste and 12.1 million mt of kimberlite to recover 9 million carats at a grade of 0.8 carat/mt. Mine life is projected at 10 years.

Initial development capital for the Sable project is estimated at $147.4 million. Assuming a base-case diamond price of $190/carat, post-tax NPV is projected at $233 million.

Dominion’s timetable for the development of the Sable project is based on a construction start in the first half of 2016. Construction of the rock dams and site infrastructure would then be expected to take place in 2017, dewatering and pre-stripping in 2018, and mining and processing of kimberlite by 2019.

Dominion has a full-year 2015 production target for Ekati of 1 million carats, to be produced from the mining and processing of approximately 1.6 million mt of mineral reserves. As of January 31, the mine had 20.2 million carats of probable reserves in its Core Zone and 85.6 million carats of probable reserves in its buffer zone for a total of 105.8 million carats of total probable reserves.