Third Canadian Mine Opens

By Rob Bates -- JCK Online, 10/1/2006 2:00:00 AM

A third diamond mine has opened in Canada—the $120 million Jericho, based in Nanuvet.

The mine is considered relatively small— it’s expected to produce 500,000 carats a year, for an estimated annual production worth $50 million. (By contrast, nearby Diavik produced 8.7 million carats last year.) It has an estimated life of 8½ to 9 years, says Peter Gillin, chairman of Tahera Diamond Corp., which owns Jericho.

Still, it’s important enough that its opening in Nanuvet attracted Canadian Prime Minister Stephen Harper and 140 other dignitaries.

Tiffany & Co. will market all of Jericho’s diamonds. The noted retailer has the option to either purchase the stones outright or sell them on the international market.

Gillin said the mine decided to hand marketing over to Tiffany to save on the costs of doing it itself. “For a comparatively small producer, being able to turn the goods over to the Tiffany organization in Yellowknife was a very attractive proposition because we didn’t need to establish our own marketing channels,” he said. “Also, Tiffany is a first-class name, so we thought it was a great partner to have.”

He notes that Tahera has extensive agreements with the local Inuit population and wants 60 percent of its workforce to be Inuits. He calls it a “significant economic spark plug” for the area.

The mine has already had one stroke of luck: In June, it unearthed a good-quality, 59 ct. stone worth an estimated $400,000.

While Jericho is the latest Canadian mine, it assuredly won’t be the last: De Beers plans to open Snap Lake, its first non-African mine, next year in the Northwest Territories.

Tahera is also exploring a property adjacent to Jericho, with De Beers as a joint venture partner.