Thorunn Howatt
Northern News Services

Iqaluit (Feb 18/02) - Nunavut is going to have to wait a bit longer for its first diamond mine, but the project could be bigger and better than initially projected.

Less than a year ago Tahera Corporation was forecasting production in 2003 at its Jericho project. Permitting was expected to be in place by the end of last year. But plans to mine Jericho were slowed down last summer when new chief executive officer and president Joseph Gutnick took Tahera's helm.

"It is a shift from the direction that Tahera was going with the permitting process. It presents an opportunity for there to be a much larger project," said company spokesperson Greg Missal.

Previous senior management looked at developing Jericho alone but the new president sees greater potential joint venturing with large mining companies. He wants to go for something bigger than Tahera could have handled on its own.

Tahera already had a joint venture with Kennecott on another Nunavut property called Rockinghorse.

"So we were able to come to an agreement with Kennecott on the Jericho claim," said Missal.

Kennecott is owned by Rio Tinto, a huge global mining company. Diavik Diamond Mines Inc. is also a subsidiary of Rio Tinto.

"Obviously they have much larger resources than Tahera would to develop projects like this," said Missal.

With Kennecott's involvement, the focus shifted to Rockinghorse, located 120 kilometres northwest of Tahera's Jericho claims.

The Tahera Rockinghorse Anuri kimberlites are centred in an area being called the "new diamond district." The frenzy of activity last fall was nicknamed the Coronation staking rush.

"With the staking rush it is pointing to a real hot spot in that area," said Missal. The new plan is to do some exploration drilling in the Rockinghorse area, where the Anuri pipes are. After that exploration should continue at Jericho.

The scope of Tahera's Jericho permit application could also be changed by the addition of Kennecott to the Jericho project.

The current permit application at Jericho is for mining an open-pit mine for eight years.

"We had fairly aggressive timelines when we first started with the permitting with Jericho," said Missal, of the process that started last year. Tahera had one false start with Jericho's permitting. The company originally wanted a satellite mining operation from the Echo Bay Mine's Lupin gold mine site, which is only 30 kilometres away. But after further investigation the idea was abandoned. Now it is hard to say how long permitting for the Jericho project will take. Kennecott has until September to decide if it wants to move forward with a joint-ventured Jericho project or not.

"If Kennecott were to find another large kimberlite near Jericho and it proved to be economic and Kennecott was interested in including it in a mining plan then it would change the existing mining plan that has been put forward for just one kimberlite," said Missal. Discovery of additional kimberlites would change the project described in the application.

Tahera's letter of understanding with Kennecott has Kennecott exploration drilling at Jericho this year. If it is successful then Kennecott would have the opportunity to finalize a joint-venture agreement any time before September 2002. If they are not successful then Kennecott can opt not to enter into the joint venture and Jericho would be back in Tahera's hands.

In the meantime, Tahera can continue with Jericho's permitting according to the letter of understanding. So if Kennecott decides to opt out, Tahera can still move forward. But if Kennecott does come into the joint venture, it has two years to make a production decision.

"The idea with that time is that if they make additional kimberlite discoveries in the Jericho area, they will need time to assess those and determine whether they can bring them in and build a larger project," said Missal. "The Nunavut play is a new and exciting one, that's for sure," said Missal. He wouldn't commit to a date for Nunavut's first diamond mine.

"I would hope there's one there in five years," he said.