Cambridge Bay (Oct 11/04) - Tahera Diamond Corporation is teaming up with Tiffany and Co. to deliver diamonds.

Tiffany will purchase all of the diamond production from Tahera's Jericho Diamond Project and provide a $35 million loan to assist in financing the construction of the mine.

What Tiffany doesn't use, it will sell on the international markets, said Tahera chairman and CEO Peter Gillan.

The $35 million loan will be repaid over five years. The deal is expected to be complete by Oct. 22.

Diamonds from the Jericho mine will be funnelled through Tiffany to Laurelton Diamonds' Yellowknife facility, a wholly-owned subsidiary of Tiffany and Co.

"This arrangement allows us to deliver to the facility in Yellowknife where Tiffany takes over," said Gillan.

"This provides a significant cost advantage for a small producer."

The agreement extends over the entire life of the project, which is estimated to be nine years.

Water permit hearings are expected to take place in Kugluktuk on Dec. 6 and 7.

Once the Nunavut Land and Water Board makes a decision, Andy Scott, Minister of Indian and Northern Affairs, will have a last say on the project.

This decision is expected to be made within 45 days of the Nunavut Land and Water Board's ruling.

The partnership with Tiffany follows the signing of an Inuit Impact Agreement with the Kitikmeot Inuit association in early September.

The agreement will ensure the Kitikmeot will have access to employment, training and business opportunities arising from construction and operation of the Jericho project, said Gillan.

In this agreement Tahera will provide considerations and compensation for Inuit regarding traditional, social and cultural matters, said Gillan.

Tahera is also considering changing Jericho's entire mine plan to an open pit plan, which it feels would be more feasible.