Doug Ashbury
Northern News Services

Yellowknife (Jun 21/00) - It's time to find financing for Jericho.

That's what Tahera Corp. has decided after completion of the feasibility study on the diamond-bearing Jericho pipe, located about 420 kilometres north of Yellowknife in Nunavut.

"Tahera Corporation plans to proceed to project financing as the Jericho diamond project is technically and economically robust," the company said in a release. Spokesperson Grant Ewing was not available for comment as of press time.

Tahera plans to extract three million carats over eight years from the land-based Jericho kimberlite pipe. Two-thirds of the resource will be open-pit mined for the first four years. The remaining one-third will extracted by underground mining over the last four years.

During construction, planned over two years starting in second-quarter 2002, the project will employ 100 people. The diamond plant operation, located one kilometre from the pipe, will process 50 tonnes of kimberlite per hour, operate year-round and employ 40 people.

The open-pit mining contractor will employ 104 people for nine months of the year. The underground mining contractor will employ about 24 people for three years.

Over $300 million in diamonds

The three million carats are valued at $110 ($75 US) per carat. Based on the per carat amount, the resource is worth $330 million ($225 million US) worth of diamonds.

When it comes to the per carat value, the project does have an upside.

In the feasibility study, Steffen, Robertson and Kirsten Canada Inc. (SRK Consulting), used a $110 per carat amount. But in their study done in late 1999, WWW International Diamond Consultants used a figure of $129 ($88 US) per carat.

The later per carat figure translates into a $387 million resource.

"Achieving the WWW modeled diamond valuation would significantly improve the economics of the Jericho diamond project," the company said.

Open pit capital costs to build the proposed Jericho diamond mine are estimated at $44.5 million in the feasibility study. Tahera had planned to build a processing plant at the nearby Lupin mine site but the two companies failed to reach an agreement.

Building the plant at Jericho has added $4.2 million to the capital costs of the project. Underground capital costs are estimated at $7.9 million. Cash flow after capital expenditures is estimated at $98.1 million under the SRK study. Based on the WWW numbers, this figure would rise to $156.1 million.

Tahera says the property around Jericho could contain other kimberlite properties.

Since the diamond plant will now be located at the Jericho site, Tahera has withdrawn its water permit application made to the Nunavut Water Board. New water permit and land lease applications will be submitted this month.

Tahera is anticipating the project permit phase will be complete in second-quarter 2001. Financing will likely come in the form of debt financing. Tahera's shares jumped 13 per cent, or two cents, to 17 cents Monday. Trading volume was about two million shares.