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SOMBA K'E/YELLOWKNIFE
The addition of a fourth diamond pipe to the life-of-mine plan for Diavik Diamond Mine has extended the NWT diamond mine's forecasted life by another year.

An aerial view of the Diavik Diamond Mine, located 300 km northeast of Yellowknife. - photo courtesy of Diavik Diamond Mines Inc.

Harry Winston Diamond Corp. released the updated life-of-mine plan Monday, which determined Diavik's net present value to be $2.6 billion.

"As we've gone underground -- and we will finish our open pit mining in the next month -- we've got much greater certainty on mining methodology, and on understanding the clarity on the cost structures, so this is more of an update of a detailed study with much greater certainty to show how superb this mine is," said Richard Chetwode, Harry Winston vice-president of corporate development. "And it's one of the world's great mines.

"This is basically a detailed plan to enable people looking at our business to understand exactly what the cash generation is and therefore the value of the mine through to the end of its mine life in 2023."

Diavik opened in 2003, and previous estimates have pegged the life of the mine at between 16 to 22 years. The last detailed life-of-mine update released in 2008 estimated the life of the mine to stretch to 2022.

The bulk of the additional year to the mine life is dependent on the fourth diamond pipe, A-21, which was not included in the last mine plan, coming on line, according to Kelley Stamm, manager of investor relations.

A-21 has yet to be approved by the mine's joint-venture partners, comprised of Harry Winston, which owns 40 per cent of the mine, and Rio Tinto's Diavik Diamond Mines Inc., which holds 60 per cent interest in the mine, located 300 km northeast of Yellowknife.

Ongoing drilling has determined indicated resource estimates at the A-21 diamond pipe to be 0.4 million tonnes, at 2.6 carats per tonne, and 1 million carats.

To the end of 2011, about 69 million carats of diamonds have been produced at Diavik.

Approval of A-21, which will cost an estimated $514 million to develop, is expected to be passed by the end of the year, Stamm said.

Ekati, Canada's first diamond mine, opened in 1998, and has an estimated mine life of 20 years, and Snap Lake, the territory's youngest diamond mine, opened in 2008 with an estimated mine life of 20 years.

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