NORTHWEST TERRITORIES
It's hard enough to move hundreds of trucks full of equipment and supplies to the mines. This year, Mountain Province Diamonds has had to co-ordinate thousands.

Two drills work away at the Gahcho Kue Joint Venture exploration site, located 300 km northeast of Yellowknife. The joint venture partners, De Beers Canada and Mountain Province Diamonds, are spending $10 million on a feasibility study for the project, potentially the fourth diamond mine in the Yellowknife-area. - photo courtesy of De Beers Canada

The company recently announced that as of March 17, 1,669 out of the 2,143 planned truckloads of equipment and supplies have been made by mid-March for its Gahcho Kue diamond mine project with De Beers Canada. With this year's favourable weather conditions, Mountain Province Diamonds representatives expect all of its planned deliveries will be made before the ice road's closure.

Mountain Province president and CEO Patrick Evans said it was important to stress how much risk the ice road contributed to developing the project. Shipments included items such as the mining fleet, drills, high-pressure grinding rolls, structural steel, cement, fuel and other supplies that would otherwise be impossible or extremely difficult and expensive

to transport by air.

"It's been critically important for us that we have a normal ice road season," Evans told NWT News/North, adding that the ice road is expected to be usable into early April. "We're very confident that we're going to get everything up that we need to complete the construction."

Evans said that for the company's shareholders and lenders, the prospect of missing an ice road and 12 months of additional delays was pretty grim. The official statement was a note of reassurance things were on track and the project's risks hadn't grown in scope.

"We're in the final stages of arranging a $370 million debt draw-down against our facility which is taking place in a month," he said, "And the lenders want to know that everything's going to be there to complete construction at the mine. So that takes a great deal of pressure off the company and the shareholders' perspective as well."

With everything running on schedule, lenders have also been reassured the company won't be incurring higher costs.

Evans said the memory of the one shortened ice road season years ago still makes everyone nervous.

"It caused a tremendous amount of difficulty for the diamond mines up there," he said. "Not being able to get all their supplies up on the ice road and then having to fly stuff in ... is much more expensive."

Contingency plans were made with the operators of the ice road but Evans described the conditions as "perfectly normal" and not "abnormally cold," leading to the transportation route opening two weeks early on the first of February.

Evans called current industry conditions a "dreadful market" and "probably the worst in the last 15 years," leading to investors being burned and now much more discerning as a result. "It's their own fault," he said. "They've been chasing low quality, low-grade assets in dodgy jurisdictions and they've lost money."

However, according to the Evans, Mountain Province hasn't been impacted that much or encountered that many problems raising investment funds, due to the project's high quality. "Attracting capital and debt to a high-grade diamond mine in Canada is a lot easier than attracting it to a low-grade copper mine in South America or Asia," he said, adding that even for his other, earlier stage project, Kennady Diamonds - they were able to arrange $18.5 million in the last few weeks without too much difficulty.

"It's not doom and gloom across the board."

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