NNSL (Jan 10/97) - The terms of the eight-year water licence for BHP's diamond project are "reasonable," a company spokeswoman said.

"In general, we can live with it," said Karen Azinger, manager of external affairs.

"We're very glad the regulatory process has been completed and we are looking forward to getting on with all segments of mining development."

On Tuesday, Northern Development Minister Ron Irwin announced approval of the water licence for the project. The licence requires BHP to pay $21 million over eight years as a security deposit to the Department of Indian Affairs and Northern Development (DIAND).

"That's by far and away the largest security deposit ever logged in the NWT," said Gordon Wray, chairman of the NWT Water Board.

But it is also the first project approved under the new security deposit system, he added.

Under this system, the project operator -- not the government and ultimately the tax payer -- pays the costs if there are problems with the development, Wray said.

"We didn't want to make sure the sum was so high it was an onerous burden," he said. "But we didn't want to leave things to the last minute."

BHP said it would perform reclamation work as it went along. If this work occurs then the company is given credit for that work against the security deposit.

With the water licence in place, the company, along with Inuit workers, will begin fishing out the first lake that is to be de-watered for the project, Azinger said.

The six land-lease permits BHP needs to conduct its mining plans were also signed earlier this week.

BHP hopes to have a permanent accommodation facility at its Koala Camp about 300 kilometres northeast of Yellowknife completed by April.