De Beers sees potential in Canada diamond property

De Beers, looking for a bigger stake of Canada’s growing diamond industry, said on Friday it wants more work done on a diamond-bearing property in northern Ontario before it makes a decision to build the province’s first diamond mine, possibly by 2007, Reuters reports.

The diamond giant, taken private earlier this year by a consortium including Anglo American and South Africa’s wealthy Oppenheimer family, was preparing to begin a pre-feasibility study on the Victor diamond project near the coast of James Bay this winter, spokeswoman Jocelyn Fraser told Reuters.

She said the study would help determine if the diamond deposit could be mined economically after De Beers recently completed a desktop study on potential mining methods for the site.

Fraser said De Beers was also waiting for results from samples taken last winter that will reveal key valuations for Victor’s diamonds.

“We still see potential and we certainly feel that it merits the additional time and effort to do this extra work,” Fraser told Reuters. “A desktop study showed that results do not support moving into feasibility, but we are still interested and have decided to do a pre-feasibility study, which will give us an opportunity to review all of the risk that was identified, and hopefully propose alternative cost-effective, lower risk solutions.”

Fraser said work would begin once swamp around the property had frozen and equipment could be transported on a winter ice road which links the project with the town of Attawapiskat, a native Indian community of about 1,500 people, Reuters reported.

The Victor project consists of an 80-person camp and a processing plant.

De Beers is currently building Canada’s third diamond mine in the Arctic barren lands of the Northwest Territories. The Snap Lake mine, De Beers’ first major asset outside southern Africa, is expected to be fully operational in 1996.

The development of the Victor project could give a much-needed economic boost to an area of northern Ontario that was once bustling with gold prospectors until the decline of the gold price.

De Beers’ presence is also vital for training and employment of residents of the Attawapiskat First Nation. Many are already employed by De Beers as drill helpers, environmental technicians, clerical workers and geology assistants.

Fraser told Reuters that the kimberlite body of the Victor pipe was complex and the company wanted more time to study it.