Doug Ashbury
Northern News Services

NNSL (Aug 30/99) - This is it, according to BHP Diamonds spokesperson Graham Nicholls.

BHP has chosen the Northern manufacturers to whom it will supply rough diamonds and that is not going to change for some time, if at all.

"A number of years down the road (there may be a change but) for the time being this is the amount we're prepared to provide," Nicholls said Thursday.

BHP is providing about 7,000 carats of rough diamonds to Northern-based manufacturers. So far, only one is operational, Sirius Diamonds.

BHP, which markets all of the rough diamonds from the Ekati mine, recently announced it will deal with Deton'Cho Diamonds Inc. and Arslanian Cutting Works (NWT) Ltd.

The two companies -- both joint ventures with Northern aboriginal groups -- plan to set up diamond-cutting and polishing plants in the NWT.

Deton'Cho Diamonds is a joint-venture between the economic development arm of the Yellowknives Dene and Calgary-based Goldeos Ltd. This joint-venture would be set up in a Dene community.

Arslanian Cutting Works (NWT) is a joint- venture by the Dogrib and the Arslanian family which operates plants in Armenia and Russia and have several diamond-buying offices in South Africa. The goal is to have this joint-venture operating out one of the four Dogrib communities.

"We still believe this is a substantial amount, around 10 per cent of the value of production," Nicholls said, referring to the 7,000 carats per month. The 7,000 carats range from stones of three-quarter carats to two carats and are of better quality. These diamonds retail from about $1,500 to $10,000.

BHP, at full production, produces 250,000 carats per month.

Nicholls said BHP, which over time had about 10 proposals cross its desk, chose Deton'Cho Diamonds and Arslanian Cutting Works for a combination of reasons.

"We were looking at a number of criteria, quality of business plan, effective mechanism to sell, people with the right kind of experience and reputation in the business," Nicholls said.

BHP recently announced it would sell 35 per cent of its run of mine to De Beers.

After the Northern allocation of 7,000 carats and the 35 per cent sold to De Beers, the rest of BHP's rough diamonds are marketed through the company's Antwerp sales office.