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SOMBA K'E/YELLOWKNIFE
A new diamond cutting and polishing facility has failed to open as projected this past spring and again in June, but it's coming, according to the CEO of Deepak International Ltd.

Industry Minister David Ramsay, left, and Deepak Kumar, president and CEO of Deepak International Ltd., sign the agreement granting the Edmonton-based company licensing rights to the Polar Bear diamond brand in early January. Kumar said he is still completing a "tremendous amount of paperwork," after which his company plans to open a new diamond cutting and polishing factory on Archibald Street. - photo courtesy of Deepak International Ltd.

"People should know that, notwithstanding anything, the factory isn't open, but we just want to make sure we haven't left any stone unturned," Deepak Kumar said.

In January, Kumar said the privately-funded diamond distribution company would purchase two vacant factories on Archibald Street at the Yellowknife Airport, known as "Diamond Row," and have them in operation by this past spring. When they did not open by April, he told Yellowknifer the factories would be ready for production by this past June. The buildings were in the midst of renovations, he added.

"I didn't realize that that tremendous amount of paperwork would take longer than anticipated," Kumar said last week.

The pair of factories had previously been owned by Arslanian Cutting Works, which went into receivership in 2010, owing more than $42 million to creditors, including $5.8 million to the GNWT, which took over the facilities.

The GNWT granted Deepak International with Approved NWT Diamond Manufacturer status in early January after Kumar agreed to purchase the buildings. The company also signed agreements giving it exclusive use of the Polar Bear Diamond trademark. The Edmonton-based company can now purchase a portion of the 10 per cent of NWT rough diamond production offered by the territory's diamond producers to NWT cutting and polishing operations.

The agreements include a required monitoring agreement with the GNWT, ensuring all NWT-mined diamonds purchased by Deepak under supply agreements with NWT diamond producers are fully manufactured in the NWT.

Brian Nagel, director of infrastructure operations and accommodations services with the GNWT Department of Public Works and Services, declined to comment on the sale of the properties, which are still listed as "sale pending" on the Coldwell Banker website. He did say the purchase price for both properties is $1.79 million.

Arslanian previously held the Polar Bear Diamond trademark before it folded. Crossworks Manufacturing Ltd., the NWT subsidiary of the HRA Group of Companies, is the only authorized diamond manufacturer active in Yellowknife, but it does not use the trademark.

Earlier this year, Industry Minister David Ramsay said the GNWT's agreement with Deepak International would herald the "rebirth" of the secondary diamond industry.

Kumar would not speculate on when his company would begin production, but he said the paperwork is in the process of being finished up.

"The paperwork is regarding the opening of the factory, and that includes getting the land lease from the GNWT and finalizing those agreements and, plus, we also had to prove that there is no environment issue," Kumar said. "That takes time."

The company has hired around 30 experienced diamond polishers and expects to hire another five to 20 workers this fall, according to Kumar.

"We are going to wait until the time all the legalities are complete and we are in a position to make an announcement and give a notice to people - 'OK, this will be your start date,'" he said.

Kumar said the company will make a public announcement about the diamond facility later this month.

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