Thorunn Howatt
Northern News Services

Yellowknife (Oct 28/02) - Ekati diamond mine is a first for both Canada and BHP Billiton.

Since the mine opened in 1998, more than $1.5 billion Cdn of rough diamonds have been mined and sold.

Ekati produces three to four million rough gem quality diamonds carats annually -- about 9,000 carats a day -- with an average value of more than $156 Cdn per carat and annual sales of $783 million Cdn. It's output represents nearly four per cent of current world diamond production by weight and six per cent by value.

In 2000, Ekati produced 2.3 million carats worth $569 million Cdn. Per carat values were $247 Cdn. Ekati's resource is 78 million tonnes of kimberlite ore with a grade of 1.09 carats per tonne for 85 million carats.

Located about 300 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle in the NWT, Ekati uses open-pit mining methods.

Panda and Misery pits are being mined right now. Diamonds at Panda pit were estimated to have a value of $134 per carat but BHP Billiton is getting $168 per carat.

Five pipes planned

Waste rock was mined at the Misery pit in September 2000. By October 2001 workers were mining ore and by December 2001 the first diamonds were sold from the mine. Misery's resource is estimated at 5.5 million tonnes of kimberlite containing 4.26 carats per tonne. While ore from Misery holds more carats per tonne than Panda, it has lower per carat values. That means overall per carat values of Ekati's diamonds dropped. But diamond values change with market conditions.

Koala North, Koala and Fox kimberlites are in development.

The mine plan foresees mining five kimberlite pipes -- Panda, Koala, Misery, Fox and Leslie by open-pit methods. Panda and Koala will be later mined by underground methods. Koala North is a test underground operation scheduled to go into production in 2002. Applications were submitted for permitting of Sable, Pigeon and Beartooth pipes.

The application has been through the Mackenzie Valley Environmental Impact Review Board and is now before the Mackenzie Valley Land and Water Board awaiting the necessary permits and licences.

The expected life of Ekati is about 12 years but three more years would be added with mining at Sable, Pigeon and Beartooth. The company continues to explore for more pipes.

Over 1,300 onsite

BHP Billiton Diamonds Inc. employs on average 650 people, most working at the mine in shifts. There are about 700 employees working for contractors at a variety of jobs, from catering and housekeeping to construction and contract mining at the Misery pit.

Hiring preference is given to aboriginal Northerners and other NWT residents who have the required skills. The hiring target is 62 per cent Northerners and 31 per cent Northern aboriginals. The mine is accessible by air only, except during a three-month winter ice-road period. The Dogrib community of Wekweti is about 180 kilometres southwest.

Ekati's employees are provided with transportation from points of hire communities including Yellowknife, Lutsel K'e, Gameti, Wha Ti, Wekweti, Kugluktuk, Hay River, Fort Resolution, Fort Smith, Deline, Inuvik, Norman Wells, Fort Simpson and Cambridge Bay.

Mined ore is crushed, scrubbed and ground to release diamonds from the surrounding kimberlite. Diamonds are then separated from non-diamond material through a series of X-ray sorters. The mine's diamonds go to a sorting and valuation facility in Yellowknife. The sorting house is used for cleaning, sizing and basic sorting of stones as well as the division of product for various marketing channels, government valuation and sales to Northwest Territories manufacturers. About 10 per cent by value in specified sizes and qualities is sold to three manufacturing operations located in the NWT.

Of the run-of-mine production, 35 per cent is sold to the Diamond Trading Company, formerly De Beers. The remaining 55 per cent is sold through Antwerp to international manufacturers and traders. In 2001, BHP Billiton launched a program for the sale of branded, polished Ekati diamonds through a network of retailers in Canada and the United States.

The diamond mining company has offices in Yellowknife and Vancouver and an exploration office in Kelowna, B.C. The main sales office is located in Antwerp, Belgium, with a small office in London, England.