Sourcing

Want to Buy a Diamond Mine?

SourcingJul 27, 2016

Want to Buy a Diamond Mine?

De Beers is set to flood its Snap Lake mine in Canada, unless another mining company wants it.

2016_Snap-Lake-mine.jpg
An aerial shot of De Beers’ Snap Lake Mine, which is located in Canada’s Northwest Territories not far from the Arctic Circle. De Beers is trying to find a buyer for the mine before flooding it.

Calgary, Alberta--De Beers plans to flood its Snap Lake mine in Canada this fall, unless another mining company wants to buy it.

Earlier this month, the diamond miner and marketer announced that it had received the necessary permits to flood the mine, which was Canada’s first underground diamond mine and one of the operations featured on the first season of Ice Road Truckers.

Snap Lake has been mothballed since December because it wasn’t profitable, but De Beers has been paying to keep the pumps going to keep water from flooding the operation, said Tom Ormsby, head of external and corporate affairs at De Beers Canada.

This type of maintenance is costly, however, and since there are no plan to resume mining there anytime soon De Beers asked, and received, permission from the local Mackenzie Valley Land and Water Board to shut down the pumps and let water fill the mine.

Ormsby said the flooding is set to take place in October or November and planning for that is taking place right now.

At the same time, De Beers is running a “parallel process” in which it is checking the market to see if another mining company wants to purchase Snap Lake, he said.

There’s still 20 to 30 million carats in the ground and the diamond mine, which had been in operation for eight years when it was shut down, is believed to have another 12 years left in it.

“We still believe there’s value in that ore body,” Ormsby said.

He could not comment on whether or not there’s been any interest in Snap Lake so far and declined to comment on a CBC News report in which analysts said it is unlikely De Beers will find a buyer for the mine.

“Certainly, everyone is entitled to their analysis of what may or may not work,” Ormsby said.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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