Guy Quenneville
Northern News Services
Published Monday, January 28, 2008

NUNAVUT - Workers arriving last Wednesday at Tahera Diamond Corp.'s troubled Jericho mine for their two-week work cycle may have wondered if they were clocking in for the last time.

Tahera, which has been under court-ordered creditor protection since Jan. 16, announced last week that mine operations at Jericho will cease when the current two-week cycle runs out, tentatively on Feb. 6.

The move will affect approximately 60 Nuna Logistics employees who drill for ore at the mine over the course of two revolving two-week shifts.

Nuna officials declined to comment on whether the workers would be laid off or transferred to other projects.

Two shifts of approximately 30 to 40 Tahera employees also working two weeks in, two weeks out will continue to process ore and extract diamonds for an estimated two months, sifting through the kimberlite recovered during the next two weeks.

"Once those stockpiles are done, then we obviously won't have any more material to process," said Greg Missal, vice-president of exploration.

Tahera will be able to pay Nuna for its remaining contract work, and Tahera's ore processors will be paid for their work during the projected two-month period, added Missal.

An additional 20 or so workers are employed at Jericho as camp cooks and maintenance people.

About 30 per cent of all the workers at Jericho are Inuit, said Missal.

"Most of the people from the local Nunavut communities would be involved either in the mining or the processing plant," he said.

In the coming weeks, senior Tahera management will continue to work with financial monitor PricewaterhouseCoopers to form a restructuring plan that may mean crucial supplies such as dynamite and fuel will be supplied to Jericho through the winter road and mining operations will resume.

"We're trying to get the financial resources in place to get back to normal operations," Missal said.

"We have to keep an eye on our cash reserves and we have to (conserve) our fuel at the mine site. For the moment, that means suspending the mining. It's that simple."

As of September, Tahera had incurred a deficit of over $143 million in 2007. The fourth-quarter results will be released in February.

The company's debts run deep. Tahera owes Laurelton Diamonds Inc. $50 million and must make a payment of $4 million by the end of January.

Other creditors to whom Tahera owes money include Nuna Logistics ($14.4 million); Diavik Diamond Mines, for maintenance and operation of the winter road ($1.82 million); McCaw's Drilling and Blasting ($1.5 million); and Dyno Nobel Nunavut ($910,000).

Tahera also owes approximately $6.2 million to 200 other creditors.

Missal said he could not comment on whether the company is considering layoffs or what other long-term options - such as selling the company or its assets - Tahera's management team is leaning towards.

"It's too early to speculate what might happen," Missal said.

Uriash Puqiqnak, the mayor of Gjoa Haven, said he knows of a number of people in his community who work at the mine. He doesn't envy what potentially lies ahead for them, because he's been there before.

Puqiqnak said he worked for four years at a small mining operation at Roberts Lake southwest of Cambridge Bay until it closed in the early 1970s.

"I was really helping out my family those days, and after it closed down, it was kind of hard," Puqiqnak said. "I had to look for other jobs in the community, like water delivery or sewage delivery.

"It's the same thing with the people who work for Jericho. They're going to have to go somewhere else and look for a job. That's not easy."