SOMBA K'E/YELLOWKNIFE - With the diamond mining industry suffering under the weight of job cuts, production rate slowdowns and upcoming work stoppages, it might strike people as an odd time to be developing the NWT's next diamond mine.

Not to Patrick Evans.

"To make a decision to advance the development of (our) project during a time of market weakness actually makes more sense than it appears at first glance," said Evans, president of Mountain Province Diamonds.

The company owns a 49 per cent stake in the Gahcho Kue joint venture, named after the potential new diamond mine located 300 km northeast of Yellowknife at Kennady Lake.

Mountain Province and its partner, De Beers Canada, which owns the remaining 51 per cent stake, have been exploring at Gahcho Kue every year since Mountain Province discovered the ore body in 1995. Spending to advance the project reached $184 million in March, according to Cathie Bolstad, spokesperson for De Beers Canada earlier this year.

Earlier this month Mountain Province announced the number of confirmed diamonds has been updated to 50.5 million carats from the 36.5 million carats determined in 2003 - the last time a resource estimate was issued.

By comparison, BHP Billiton's Ekati diamond mine opened in 1998 with reserves of 71.8 million carats.

"We've upgraded the resource to a higher level of confidence," said Evans. "It's the largest diamond development project in the western world and the grade is very high."

Evans said Mountain Province is now looking at contractors to complete the project's feasibility study, the report that makes the financial case for the mine - a process that should take 12 months, said Evans.

"Then we'll have the basis to fund the project, which will take about three to six months, and then construction will start, which will take about 18 months."

Permitting on the project is also poised to begin. The last portion of the environmental impact study, the project description, will be completed in time for a submission of the study by the end of the year.

The partners hope to open the mine - which De Beers said will require about 400 workers during operation - by the end of 2012, said Evans.

Although Bolstad couldn't be reached for comment for this story, she said last March that for 2009, "Work ... includes ongoing collection of baseline environmental information, continued remediation work for continual improvements to the site, and hydrology studies regarding water flows and water quality."

Now is the perfect time to be developing the project, said Evans.

"It's true that costs are lower and labour is more readily available, equipment is more readily available," he said. "But also, given that it takes a few years to develop a mine, to build a mine, then there's a greater chance that market strength will have returned by the time production commences."

"You don't build a mine for today; you build it for tomorrow," added Evans. "The earliest that this mine will come into production is at the end 2012. We have to assume that the diamond market is going to return to its previous strength by that time."