Yellowknife (May 13/05) - The board of directors for De Beers has approved $636 million for construction of the Snap Lake diamond mine project.

Snap Lake is the first fully underground diamond mine in Canada.

Cathie Bolstad, manager of public and corporate affairs for De Beers' NWT projects, confirmed the formal approval.

Through a press release, De Beers chairman Nicky Oppenheimer said the company's board was very impressed with the work done by the Canadian team on the project's technical challenges.

"We are excited that this project is now on track to be De Beers' first Canadian diamond mine," said Oppenheimer.

Mike Vaydik, executive director for the NWT and Nunavut Chamber of Commerce, said it's good to see another diamond mine opening up in the Northwest Territories.

"Further, it's also good to see De Beers, long a leader in the Diamond mining industry, investing in Canada," he said.

The annual operating costs are set at $167 million, otherwise stated at $147 per tonne.

The diamonds at Snap Lake are valued at an average of $144 per carat throughout the estimated 20-year mine life.

Currently, there are close to 50 De Beers employees working on the Snap Lake Project. Another 175 contractors are working on the project. At full production, there will be 500 people working at the mine.

As of April 15 of this year, $44,840,740 has been spent on construction commitments. Territorial contractors received $33,472,740 in construction contracts, 75 per cent of the overall total. Spending accruing to aboriginals amounted to $15,603,180.

The decision by the De Beers board provides the remaining capital required for completion of the project. Prior to April 15, $110 million of the total had been approved in November 2004.

Snap Lake will begin production in 2007, reaching full production in 2008. It is expected to produce 1.5 million carats a year per annum for 20 years.