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Jericho bailed out

David Ryan
Northern News Services

Iqaluit (Nov 20/06) -After losing more than $10 million last quarter, Tahera Diamond Corp. has been propped up by a global mining giant.

The company entered into an agreement with Teck Cominco, which gives Vancouver-based Teck a 16 per cent share of Tahera for $30 million.

NNSL Photo/graphic

Tahera chairman and chief executive officer Peter Gillin speaks during Tahera's Jericho diamond mines grand opening this summer. - David Ryan/NNSL photo

Earlier this month, Tahera announced lower than expected results at its Jericho diamond mine, poor exploration findings from its Muskox kimberlite and financing problems with one of its key creditors, Tiffany & Co. Now with additional financial support and mining expertise from Teck, Tahera finally anticipates getting Jericho up to top speed, said company chair and chief executive officer Peter Gillin.

"We're very pleased with the deal. It put the company in a solid financial position," he said.

One way of ensuring financial stability is a long running and fully functioning winter ice road, he said.

The company's problems largely stemmed from the early closure of last year's route after just 42 shipping days.

"We're hoping for very cold weather," said Gillin.

Tahera had hoped to transport 450 loads of supplies and fuel to the property via the Tibbitt to Contwoyto ice road, but was only able to send 60 per cent of what it wanted by truck last year, said Gillin.

An early cold snap two weeks ago provided a good base for the winter road this year, said Tibbitt to Contwoyto Joint Management Committee (JMC) member Erik Madsen.

The JMC is responsible for constructing and maintaining the ice road.

Ideally temperatures in December would be between -20 C and -25 C for road construction to move as quickly as possible, he said.

Plowing and construction didn't begin last year until early January, but the JMC is hoping to begin sometime between mid-December and Christmas, he said.

The use of amphibious vehicles known as Haglands should allow snow to be cleared earlier than in past, but safety is still the number one priority, he said.

Teck Cominco is also hoping for good ice road conditions to get as many trucks up to Jericho as possible, said senior vice-president of corporate development Ronald Vance. As a major mining corporation, Teck was looking to diversify its commodity base and saw buying into Tahera as an attractive opportunity, he said.

"There was an attraction to learn about diamond exploration, mining and marketing," he said.

Vance hopes Teck can use its vast experience to help Tahera become as productive as possible.

"We hope to have success," he said.

The new financing deal with Teck will allow Tahera to defer $10.4 million in debt payments to Tiffany & Co. until Sept. 30, 2007.