Guy Quenneville
Northern News Services
Published Monday, November 26, 2007

YELLOWKNIFE - The life expectancy of the Diavik Diamond Mine just got a major boost.

The mine will be in production until beyond 2020, one of its major shareholders recently announced.

The Harry Winston Diamond Corporation, which has a 40 per cent interest in the mine, unveiled production plans on Monday for the major underground kimberlite deposits at the Diavik project 300 kilometres northeast of Yellowknife.

The deposits in question were first discovered in 1994 and subsequently underwent a feasibility review. Production from the underground mine - located directly beneath the open-pit mine currently in production - is slated to begin in 2009.

"It's great news," said Nancy Murray, a spokesperson for Harry Winston.

"As the largest publicly-traded diamond supplier, it's important to know that you have a strong supply of high-grade diamonds, especially in a world where the demand is facing a lack of supply."

Rio Tinto, the other, London-based partner behind the mine, has approved the investment of US$563 million for the underground project, to be cost-shared between Rio Tinto and Harry Winston, headquartered in Toronto.

Tom Hoefer, a spokesperson for Diavik, said the underground deposit - which currently employs less than 50 people, mostly explorers - will increase its workforce by 100 to 200 employees in the first two years, staying relatively steady thereafter.

Hoefer said the economic benefit to the North will be substantial, if Diavik's past spending is any indication.

"We've spent about $3 billion to date, and three-quarters of that money has gone to Northern businesses," said Hoefer. "The mining industry probably hasn't ever created a benefit like that.

"If you're a Northerner and you're a Northern businessperson, then I would say this is a really strong signal that we've still got a lot of good years ahead of us."

The company will have to construct additional underground infrastructure to service the mine, including a vast array of tunnels big enough to accommodate transportation vehicles.

The ramping up of the underground deposit also means the construction of a paste backfill plant to house the materials that workers use to fill in (and thereby secure) dug-in areas after they've been mined. Additional camps to house the influx of new workers will also be established.

Exploration of other sites on the Diavik project is expected to continue, said Hoefer.

"We're always exploring, because we're always hoping to find another A-154 south (the open-pit mine above the underground mine), which is our best deposit."