Yellowknife (Feb 16/00) - Diavik believes quarrying work it was doing at its Lac De Gras mine site complies with permits it has in hand.

"We believe all of the work done to date has been done under the existing permit," said Diavik spokesperson Tom Hoefer Monday.

That work, however, is now subject of an investigation by the Department of Indian Affairs and Northern Development (DIAND).

Asked if Diavik has been doing any quarrying at the site, Hoefer said, "We can't get into detail (about that) right now because we understand we're under investigation."

He said his knowledge of the investigation is limited to what he has heard and read in the media, since DIAND has yet to contact the company about it.

DIAND is responsible for monitoring the site of the proposed diamond mine, 280 kilometres northeast of Yellowknife.

DIAND operations director Floyd Adlem said a routine inspection near the end of January sparked the investigation.

"They have a couple of permits there for exploration activity," said Adlem.

"We'll be looking at it to see if they allow the kind of work that was done up there."

Territorial land use regulations do not require an inspector to inform a permit holder an investigation is under way. The permit holder has to be informed once an inspector believes the terms of the permit have been violated.

Adlem said he had "no idea" when inspectors will visit the site again or when the investigation will conclude. He would not comment on what discussions, if any, have taken place in DIAND offices since the investigation began.

Violations of land use are subject to summary conviction, which can result in fines of up to $2,000 and six months in jail for each day an offence is committed.

DIAND records show that over the last two years Diavik has received permits allowing a total of 3,440 cubic metres of quarrying at the site of the proposed mine. The permit for 3,000 cubic metres of that total expired last year.

On Dec. 31 Diavik applied for a land use permit quarry 40,000 cubic metres of rock. The company issued a press release Jan. 19 publicizing DIAND's denial of the application. DIAND Minister Robert Nault noted the department's report on the environmental assessment of the project required all regulatory approvals be granted before the mine proceeds.

Days after Diavik issued its press release, it stated it would be removing 115-120 people it had at the mine site. Its permit application indicated the work would require 65-80 people.

Asked why so many people were on the site, Hoefer said they were doing a variety of jobs, including building a larger airstrip on the ice and ice roads on land, working on equipment, expanding staff facilities and providing medical and security services.