Doug Ashbury
Northern News Services

NNSL (Apr 06/99) - A third player in the North's diamond-cutting and polishing sector has been given GNWT conditional approval to set up an operation in the North.

NWT company Deton'cho Diamonds Inc.'s plan to manufacture polished diamonds in Ndilo was given conditional approval March 25. The GNWT is requiring recipients of conditional approvals to show they have made a supply deal with BHP and provide training to Northerners.

As of Thursday, BHP has only agreed to supply Sirius Diamonds with rough stones but there is room for more agreements.

For its part, the GNWT secures bank loans that firms will use to buy rough stones from BHP.

Deton'cho Diamonds Inc. is equally owned by Deton'cho Investments North Ltd. and Goldeos Ltd. Deton'cho Investments is a wholly-owned subsidiary of Deton'cho Corp., the economic development arm of the Yellowknives Dene First Nation.

Goldeos is a private, Canadian-controlled corporation owned by Francis Liu and Frans van Looy. The corporation operates Calgary Diamond House, a diamond- manufacturing facility, and Vi Vi Jewellers, also in Calgary.

Calgary Diamond House, formed last October, has locally-trained employees, Lui said.

"We look forward to training Northerners."

Lui also said Deton'cho Diamonds is amid talks with BHP Diamonds on obtaining rough diamonds.

van Looy, with 40 years of experience in the diamond-cutting business, is Deton'cho Diamonds operations director.

Deton'cho Diamonds' plan is to be manufacturing diamonds next year.

Initially, the company hopes to be manufacturing 7,000 finished carats per year, rising to 24,000 carats per year about five years into production.

The plan also includes building a 744-square metre (8,000-square foot) facility in Ndilo.

The plant will employ up to 40 people, Deton'cho Diamonds said. Deton'cho Corp. president Darrell Beaulieu could not be reached for comment.

Deton'cho Diamonds will concentrate on producing finished diamonds larger than .25 carats and of better quality, ideal cut, round brilliant design.

Lasers will be used to cut and brand each diamond, identifying origin and place of manufacture.

It will be several months before BHP Diamonds decides which Northern manufacturing firms it will supply rough diamonds to, BHP spokesperson Graham Nicholls said Thursday.

The firms -- Nicholls said BHP has been approached by eight to 10 Northern firms looking for supply of rough diamonds -- are seeking higher-quality stones, Nicholls said.

"We're going to try to select the (firms) that will be most successful over time," he said.

Nicholls said the company's marketing arm, headed by Bill Zimmerman in Vancouver, is examining all proposals simultaneously.

There is room for two more diamond-cutting and polishing firms of similar size to Sirius Diamonds, he said.

That means, under the current arrangement between BHP and the GNWT, which provides about 7,000 carats a month for NWT-based manufacturing, the North could have three, possibly four, diamond-cutting and polishing plants.

BHP, at full production, will generate about 250,000 carats a month.

Although the amount to be provided to local manufacturers, at 7,000 carats a month, is only about three per cent by weight, it represents about 10 per cent by value.

"These are valuable carats," being sought by firms wishing to set up in the North, Nicholls said.

Asked if BHP would expand the number of carats it makes available to Northern firms, Nicholls said it will depend on how the company progresses with its marketing program.