On target
Production running smoothly at Ekati mine

Doug Ashbury
Northern News Services

Yellowknife (Feb 23/00) - Production levels at the BHP Diamonds-Dia Met Minerals Ekati diamond mine continue to roll along at expected rates, says BHP spokesperson Graham Nicholls.

Production is "pretty much on target," Nicholls said Monday.

The mine is producing an average of about 225,000 carats per month.

Since going operational in October 1998, Ekati has produced a total of about three million carats of diamonds.

As of the end of November, the latest month for which production numbers have been released, some 2.8 million carats have been mined from Ekati. BHP's share is 1.4 million carats.

Ekati diamonds are selling at about $165 US per carat, well ahead of the projected $130 US per carat.

But despite the good production numbers and heathy per carat values, there have been some challenges, Nicholls adds.

BHP Diamonds will be replacing the primary crusher at the site, he says. A new crusher, which breaks up kimberlite ore, is estimated to cost about $2 million, adds Nicholls.

Because of cold winter temperatures, there is a lot of variation in the ore in terms of hardness and temperature. This sometimes prevents the ore from moving through the crusher properly, he said.

BHP Diamonds, owned by Australia's Broken Hill Proprietary Company Ltd., has a 51 per-cent stake in Ekati.

Dia Met Minerals owns 29 per cent. Geologist Stewart Blusson owns 10 per cent. The remaining 10 per cent is owned by geologist Chuck Fipke who is amid divorce proceedings in a B.C. court.

It is unclear how Fipke's divorce will effect the ownership of his stake in the multi-billion dollar property.

The matter is currently before a B.C. court and Fipke's assets have been frozen, the Financial Post reported Monday.

As for the value of the assets, the Financial Post story suggests Fipke's share holdings in Dia Met might currently be undervalued because delays at Diavik are hurting diamond company stocks.