SOMBA K'E/YELLOWKNIFE
A milestone at the Gahcho Kue diamond mine has been reached as the plant that processes ore into rough diamonds has completed commissioning, mine officials announced last week.

Inside the Gahcho Kué mine process plant where diamond-containing ore is crushed and washed, resulting in production of rough stones. - photo courtesy of De Beers

The news the mine is shifting from construction and commissioning toward commercial production comes as one of the few bright spots in a suffering mineral industry.

De Beers, majority owner of the mine about 280 km northeast of Yellowknife, and minority owner Mountain Province last week announced the plant that crushes and washes ore has completed commissioning - a system of checks to ensure it works as planned.

"Successful plant commissioning and the start of ramp up to production at the world's largest new diamond mine is a major achievement for the Gahcho Kue joint venture and a tribute to the operating partner De Beers Canada," stated Patrick Evans, president and CEO of Mountain Province, in a news release last week.

At this point about 97 per cent of construction and commissioning work at the site has been completed, said De Beers spokesperson Tom Ormsby.

The first ore was exposed in March and sent to the process plant June 30, according to Mountain Province.

The $1 billion project is ahead of schedule and remains on budget, De Beers and Mountain Province stated. Full commercial production is expected to occur in the first three months of 2017.

The mine is expected to produce 4.5 million carats per year and operate for 12 years.

"It's certainly exciting," Ormsby said. "This is our third mine in Canada. That's fairly significant in the last 10 years for us. It's certainly a very big mine as well, it's the biggest one we'll have in Canada and it's going to be a significant player not just in Canada but on the global diamond scene."

There are about 300 people working at the site, with about 60 per cent of them being De Beers employees, he said.

That's expected to grow to 530 employees and contractors once the facility is complete.

Premier Bob McLeod, also minister of Industry, Tourism and Investment, said the Gahcho Kue announcement is good for residents of the territory.

"We're very pleased," McLeod said. "The start-up of Gahcho Kue is good news especially with the state of our economy these days. This will have a direct impact on Northwest Territories residents, especially in the communities and their companies."

The announcement comes at a time of shifting fortunes for the mineral extraction sector in the territory.

In December, De Beers shuttered its unprofitable Snap Lake mine, laying off hundreds. More than 100 former Snap Lake workers have been transferred to Gahcho Kue, according to Ormsby.

Inkling of sector recovery?

Ahead of devolution in 2014, McLeod touted seven new mines in various stages of development that he predicted would double the territory's gross domestic product by 2020.

Of the seven, Gahcho Kue is the only one to reach production. Four have gone through the regulatory process and were approved but have yet to move forward.

It also comes after years of relatively stagnant spending on exploration and development of new deposits.

Natural Resources Canada survey results estimate companies will spend $99.3 million in the territory this year, which is about the same spent during the past five,

excluding 2013 when spending dropped to $77.9 million.

Changes to the sector have hit government revenues.

In 2015-16, the GNWT estimated it would receive more than $81.2 million in non-renewable resource revenues. A revised figure cut that total 22 per cent to $63.4 million. This fiscal year, the government has slightly reduced its estimated resource revenue to $63.2 million.

McLeod, when asked when he expects to see a turnaround in the mineral sector, said that's an open question.

"That remains to be seen," McLeod said.

"I'm hopeful that mining will turn around sooner than later."

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