News release via Canada NewsWire, Toronto 416-863-9350
Attention Business Editors:
Jericho Diamond Project - Updated Feasibility Study
TAHERA CORPORATION
(TSX: TAH)
TORONTO, June 18 /CNW/ Highlights
-
Developing Tahera's wholly-owned Jericho Diamond Project as
Nunavut's first diamond mine
-
Updated Jericho Diamond Project feasibility study indicates robust
economics for a diamond mining operation centered on the land-based
Jericho kimberlite
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Forecast diamond production of +3,000,000 carats over a minimum mine
life of 8 years
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IRR of 44% and NPV(5%) of $123 MM (WWW modeled diamond valuation)
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NPV(5%) increased by 8% (WWW valuation), and NPV(5%) increased by
26% (SRK valuation) versus previous study
Tahera Corporation is pleased to announce the results of the updated
Jericho Diamond Project feasibility study. SRK Consulting completed the
original feasibility study in 2000, and Tahera engaged SRK Consulting to
update the study to reflect current conditions.
Dowding Reynard & Associates (Pty) Ltd. (DRA), who have extensive
experience in design and construction of diamond plants; Nuna Logistics,
experienced Nunavut mining contractors; and WWW International Diamond
Consultants Limited (WWW), well known diamond industry experts, provided input
for the study. SRK Consulting also engaged Tinus Oosterveld, a professional
mining engineer, for input regarding diamond valuation and reserve estimates.
Mr. Oosterveld was previously employed with De Beers Consolidated Mines Ltd.,
where he was in charge of the mineral resource department, and responsible for
the assessment of kimberlite deposits throughout the world.
The mineral reserves changed slightly in the updated study versus the
original study, resulting from increasing the open-pit dilution factor. The
mine plan, which indicates that approximately 3.1 million carats will be
produced over an eight-year mine life, is relatively unchanged. The current
plan consists of open-pit mining of approximately 2 million tonnes (2.4
million carats) of kimberlite reserves, followed by underground mining of
615,000 tonnes (673,000 carats) of kimberlite reserves.
The following chart shows a summary of the updated feasibility study
results. SRK Consulting utilized an average diamond valuation for the base
case feasibility study (i.e. mid point between WWW diamond valuation and Tinus
Oosterveld diamond valuation). The feasibility study results using the WWW
diamond valuation is indicated in the right hand column.
<<
------------------------------------------------------------------------Jericho Diamond Project
2003 Feasibility Study
(C$ 000's, unless otherwise noted)
--------------------------------------SRK Consulting
WWW modeled
diamond valuation
diamond valuation
------------------------------------------------------------------------Total resource
7.1 million tonnes
7.1 million tonnes
(at) 0.84 c/t
(at) 0.84 c/t
------------------------------------------------------------------------Indicated resource
3.7 million tonnes
3.7 million tonnes
(at) 1.17 c/t
(at) 1.17 c/t
------------------------------------------------------------------------Inferred resource
3.4 million tonnes
3.4 million tonnes
(at) 0.52 c/t
(at) 0.52 c/t
------------------------------------------------------------------------Diamond valuation
US$81/ct
US$92/ct
------------------------------------------------------------------------Mineral reserve
2.6 million tonnes
2.6 million tonnes
(at) 1.2 c/t
(at) 1.2 c/t
------------------------------------------------------------------------Total carats produced
3,115,000
3,115,000
------------------------------------------------------------------------Carats mined open-pit
2,442,000
2,442,000
------------------------------------------------------------------------Carats mined underground
673,000
673,000
------------------------------------------------------------------------Revenue
364,628
412,451
------------------------------------------------------------------------Operating cost
173,289
173,289
------------------------------------------------------------------------Operating cost per carat (C$/ct) 56
56
------------------------------------------------------------------------Operating cash flow
191,339
239,162
------------------------------------------------------------------------Capital expenditures - open pit
Diamond Plant Facilities
13,995
13,995
Ancillary Facilities
14,896
14,896
Site Preparation
5,537
5,537
Mobilization / Demobilization
2,954
2,954
Owners' Costs
1,621
1,621
Pre-production mining
8,929
8,929
--------Sub-total
47,932
47,932
------------------------------------------------------------------------Contingency
4,793
4,793
------------------------------------------------------------------------Total Capital Open pit
52,725
52,725
------------------------------------------------------------------------Capital - Underground
8,672
8,672
------------------------------------------------------------------------Sustaining capital
2,854
2,854
------------------------------------------------------------------------Contingency
1,152
1,152
------------------------------------------------------------------------Total Project Capital
65,403
65,403
------------------------------------------------------------------------Cash flow after capex
125,936
173,759
------------------------------------------------------------------------NPV (at) 5%
85,510
123,089
------------------------------------------------------------------------IRR
32.7%
43.6%
------------------------------------------------------------------------Mine life (years)
8+
8+
------------------------------------------------------------------------Figures are before taxes, royalties, and financing.
C$ (equal sign) 0.70US$
Approximately 80% of the mineral reserve is derived from the high-grade
centre lobe, containing a mineral reserve of approximately 2.08 million tonnes
with a recovered grade of 1.31 carats per tonne. Approximately 520,000 tonnes
of ore at a recovered grade of 0.75 carats per tonne will be mined from the
northern lobe, which will be processed at the end of the mine life. As part of
the mine plan, approximately 1.63 million tonnes of inferred resource will be
mined and stockpiled. Tahera is confident that a considerable amount of this
inferred resource may be converted to mineral reserve following adequate
assessment of its diamond grade and value, resulting in an extension of the
mine life.
The proposed 50 tonne per hour diamond processing plant will be
constructed approximately 1 kilometre from the Jericho kimberlite and will
operate year round. At full capacity, the diamond processing plant is capable
of processing 68 tonnes per hour.
Capital and operating costs increased by approximately 19% and 11%
respectively versus the 2000 study. The increased capital cost is in part due
to an increased contingency factor applied in the updated study. The operating
cash flow increased significantly in the current study versus the 2000 study
(13% - 25% increase), as did the NPV(5%) (8% - 26% increase).
Permitting, Project Financing & Timeline
---------------------------------------The Nunavut Impact Review Board (NIRB) recently determined that the Final
Public Hearings for consideration of the Jericho Diamond Project Environmental
Impact Statement (EIS) would be rescheduled to ensure that all of the relevant
environmental and socio-economic data and information are available before the
NIRB executes its decision-making obligations regarding the Project.
To facilitate the EIS review process, Tahera has organized a series of
meetings with various regulatory groups who submitted additional information
requests regarding the Project. The meetings, which are scheduled to occur
during the week of June 16th, will provide a discussion forum whereby Tahera
and the regulatory groups can address and clarify any outstanding issues
regarding the Project. Many reviewers have focused on issues related to water
quality and details regarding the design of the processed kimberlite
containment area in their submissions. Tahera will endeavour to respond to all
issues and information requests within 90 days. Following this schedule, it is
likely that the Final Hearings will be rescheduled as early as September,
which will allow for the Company to meet its original goal of achieving
approval of the Jericho Diamond Project EIS during 2003.
In conjunction with the permitting activities, Tahera is actively
pursuing project financing for the Jericho Diamond Project, with the goal
being to debt finance a large portion of the required project capital.
Development of the underground mine will be financed from project cash flow.
The following time line been established for development of the Jericho
Diamond Project:
Target to complete permitting
Project financing
Design & procurement of plant
Mobilization
Diamond plant construction & commissioning
2003
2003/04
2004
2004/05
2005
>>
Andrew Bradfield, P. Eng. of SRK Consulting is the qualified person with
respect to the Jericho Diamond Project.
About Tahera Corporation
Tahera Corporation (www.tahera.com) is a unique Canadian diamond Company
in that it has a positive feasibility study completed on an advanced-stage
diamond project. Tahera is focused on developing its wholly-owned Jericho
Diamond Project as CANADA'S NEXT and NUNAVUT'S FIRST DIAMOND MINE. Tahera has
several other prospective diamond projects in Canada's prolific Slave Craton,
including the Rockinghorse Property joint venture, where the significantly
diamondiferous Anuri kimberlite occurs. The common shares of the Company trade
on the Toronto Stock Exchange under the symbol 'TAH'.
%SEDAR: 00003313E
/For further information: Tahera Corporation, Grant Ewing - Vice
President, Investor Relations & Corporate Development,
Tel: (416) 777-1998, Fax: (416) 777-1898, Toll free: (877) 777-2004,
Email: investor_relations(at)tahera.com/
(TAH.)
CO:
Tahera Corporation
CNW 10:02e 18-JUN-03