by Richard Gleeson
Northern News Services

NNSL (Mar 09/98) - Diavik on Friday triggered the process it hopes will lead to the establishment of Canada's second diamond mine.

In a press briefing held Friday, Diavik officials unveiled a description of their project, located near BHP which plans to begin mining operations in the fall.

Diavik's government affairs specialist, Tom Hoefer, said Diavik hopes to begin production in 2001.

"This is step one," explained Hoefer. "This puts our project into the public domain. From here the government starts telling us what it requires to take the project through the environmental assessment process."

In fulfilling the government's requirements, Diavik will compose a document that will be the reference for public hearings.

BHP's environmental assessment document fills eight binders. Diavik put the description of its project onto CD ROM to ease handling of the information.

Hoefer said it anticipates completing its environmental assessment document by the third quarter of this year.

The Diavik diamond find, located at Lac de Gras, includes four kimberlite pipes with a total weight of 37 million tonnes. Rio Tinto Ltd. has a 60 per cent stake in the project, with Aber Resources Ltd. holding 40 per cent.

Hoefer emphasized not all of the kimberlite will be economic to mine, but bulk sampling has revealed the grade to be very rich, from 2.9 to 4.41 carats per tonne.

The company estimates the mine will employ 300-400 people with a total annual payroll of about $25 million and require in $90 million in goods and materials each year, said Hoefer.

Though following a trail blazed by BHP, according to mineral stock analysts Goepel Shields and Partners, the Diavik project has a major technical hurdle that will likely be one of the focuses of the environmental assessment.

Three of its pipes are located beneath Lac de Gras, from 25 to 150 metres offshore. Mining these pipes will require construction of a four-kilometre dyke to hold back lake water.