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| November 13, 2014 --- Vol. 08, No. 46 | November 2014
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Northwest Territories
ASSESSMENT/RECLAMATION SECURITY – Dominion Diamond Corp. Nov. 6 said it has filed the Developer’s Assessment Report with the Mackenzie Valley Environmental Impact Review Board for the Jay kimberlite pipe at the Ekati Diamond Mine. The purpose of the DAR is to meet the requirements set out by the review board for the environmental assessment process. The Jay project is an extension of a large, stable, and successful mining operation with the potential to extend the Ekati Mine life out to about 2030: more than 10 years beyond the current closure date. The facilities required to support the development of the Jay project and to process the kimberlite already exist at the Ekati Diamond Mine. The submission of the DAR is the next step in the permitting process to develop the largest diamondiferous resource in North America. Following the submission of the DAR, the analytical and hearing phases of the Environmental Assessment process are anticipated to deliver a ministerial decision in late 2015. Once this decision is issued, the water license and land-use permitting process will take about a further 6 months. The project proposes the building of a water retention dike following a horse-shoe shaped alignment from the shoreline out into Lac du Savage to isolate the portion of the lake overlying the Jay pipe. The dike will be five kilometers (three miles) long with an average water depth of five meters. The approach is similar in concept, geographic environment and water depth to that implemented between 2008 and 2010 at the Meadowbank Gold Mine in Nunavut by Agnico Eagle Mines Ltd. The project timeline currently envisions that dike construction would commence in the summer of 2016 and would continue through to 2019. De-watering and pre-stripping would then commence followed by conventional open-pit mining, with production currently expected to begin in 2020. Although it is a requirement of the DAR to include economic parameters in support of modeling community and government benefits, these are illustrative only. Dominion said it plans to publish a pre-feasibility study based on engineered estimates before year’s end. The Jay kimberlite pipe is located in the southeastern portion of the Ekati mine property, roughly 25 kilometers southeast of the Ekati main facilities and some seven kilometers to the northeast of the Misery pit, in the Lac de Gras watershed. The Jay Project is part of the Buffer Zone Joint Venture, in which the company has a 65.3 percent interest. The DAR will be made available on the Review Board’s website at http://www.reviewboard.ca.
Separately, Dominion Diamond reported that Dominion Diamond Ekati Corp., the operator of the Ekati Diamond Mine, has posted surety bonds with the Government of the Northwest Territories in the aggregate amount of C$253,473,000 to secure the obligation under its water License to reclaim the Ekati mine site. As a result of the posting of the surety bonds, the company has been returned letters of credit in the amount of roughly C$82.6 million previously posted as security in respect of the aforementioned reclamation obligation. Letters of credit in the amount of about C$42.7 million continue to be held by the GNWT as security for reclamation and related activities at the Ekati Diamond Mine, pending completion of a review by the government of duplication between the security required under the water license and security held by the GNWT under the environmental agreement. The surety bonds have been issued by a consortium of insurance companies led by Zurich Insurance Company Ltd. and including ACE INA Insurance and AVIVA Insurance Company of Canada. The terms were brokered by Marsh Canada Ltd. on behalf of the consortium. Rothschild advised Dominion on the transaction. The current annual average cost of the bonds is 1.3 percent.
DIAMONDS – Margaret Lake Diamonds Inc. Oct. 28 said it closed the first tranche of a non–brokered private placement announced Sept. 23, for gross proceeds of C$592,300. The private placement is for 3 million non-flow-through units at a price of C25 cents per unit and up to 1.2 million flow-through common shares at a price of C28 cents per FT Share for combined gross proceeds of up to C$1.086 million. Each unit is comprised of one non-flow-through common share of Margaret Lake Diamonds and one half of one common share purchase warrant. Each warrant is exercisable to purchase one non-flow-through common share of Margaret Lake Diamonds at a price of C30 cents per common share for a period of 12 months from the date of issuance. In connection with closing the first tranche, the company issued 1.07 million units for gross proceeds of C$267,500 and 1.16 million FT shares for gross proceeds of C$324,800. Margaret Lake Diamonds is continuing to raise funds under the private placement. In connection with the first tranche, the company paid a cash finder’s fee of C$22,744 and issued 113,000 warrants to Jordan Capital Markets Inc. Each agent’s warrant is exercisable at a price of C30 for a period of 12 months from the date of issuance. The securities issued under the first tranche are subject to a four-month and a day hold period, expiring March 1, 2015. Margaret Lake Diamonds is a diamond exploration company focused on the Northwest Territories in proximity to the next Canadian diamond mining development by De Beers and Mountain Province Diamonds Inc. and adjacent to ongoing exploration by Kennady Diamonds. Proceeds from the private placement will be used for work programs on Margaret Lake Diamonds diamond properties under option in the Northwest Territories, Canada and for general corporate purposes.
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