Underground Mining Investment Approved by dfn15928


									                                  VOLUME 10                                                                                                                3RD QUARTER 2007

                                 Underground Mining Investment Approved
Welcome                              We are very pleased to announce that Diavik’s owners, Rio            projected in the original feasibility study of 1999.
                                  Tinto (60%) and Harry Winston Diamond Corp. (40%), have                    The US $563 million will be spent over the next two
    I am delighted to make
                                  approved the mine’s next phase – underground mining.                    years, adding to the US $224 million invested in 2006/07 for
my first contribution to this
                                     This is a significant investment at US $563 million and shows         underground feasibility studies and related construction.
newsletter on a positive
                                  investor confidence in the mine.                                            This investment in underground mining will provide training,
note.                                Under the current life of mine plan, diamond production from         employment, and business opportunities, in addition to those
    In the weeks since I have     underground would begin in 2009 and continue beyond 2020.               benefits that Diavik already provides.
joined Diavik, we have            Open-pit mining is expected to cease in 2012 when Diavik would             Diavik remains firmly committed to continuing its work with
received approval for the         become an all-underground mine.                                         local communities and governments to meet its socio-economic
funding of the underground           Diavik’s total mine life remains within the 16 to 22 years           and environmental commitments.
operation and associated
surface works.
    The approval marks a
very significant milestone
                                  Much Construction Needed
in the history of Diavik,            To support Diavik’s underground mining phase, several new
probably the most                 construction projects are required. These include more tunnel, a
important news since the          new crusher and paste backfill plant, expanded water treatment
opening of the surface            and power generating plants, as well as additional other ancillary
operation.                        facilities.
    However, with the             Underground Decline Work
approval now comes
                                    Prior to the start of Diavik’s underground mining phase,
the responsibility of
                                  approximately 20 kilometres of new underground development
ensuring that we build an
                                  will be required.
underground operation and
                                    This tunnel, or decline, will be in addition to the work already
business that is sustainable
                                  completed as part of the underground feasibility study.
into the future.                    At the end of the third quarter, nearly four kilometres of tunnel
    We take our social and        has been completed for the underground feasibility study.
community responsibility
very seriously, and remain        Water Treatment Plant
committed to ensuring that           To protect the environment, Diavik has a comprehensive water         This illustration shows how the three pipes could be underground mined.
we create a positive legacy       management system. The heart of the system is the mine’s water          Open-pit mining in the A154 pit, right, commenced in 2003, while
through the careful use of        treatment plant, which removes suspended solids from the water.         open-pit mining of the A418 pipe is expected to begin in 2008.
the benefits and wealth we         Building tens of kilometres of tunnel will open up pathways for
all obtain from the mining        water to enter the mine. This water will be pumped to the surface       Power Plant
operation.                        where it will be stored then treated to remove suspended solids.           To support the mine expansion, Diavik will need to increase
    It is, however, a fact        As a result, Diavik will need to increase the capacity of its water     power capacity. Currently, Diavik’s power plant has five
that the mine will not last       treatment plant.                                                        4.4 megawatt diesel generators. A second plant will house two
forever. It is, therefore,           Currently Diavik’s water treatment plant can treat up to 45,000      3.3 megawatt gensets, two 4.4 megawatt gensets, and have
important that this positive      cubic metres of water per day. The expansion will double the            space for two more 4.4 megawatt gensets if required. Like the
                                  plant’s treatment capacity.                                             existing gensets, waste heat will be captured, significantly raising
legacy is created carefully,
                                     Prior to entering the plant, water is stored in the North            efficiency.
and in a manner so that
                                  Inlet, part of Diavik’s water management system. To ready for              With the need for power, comes the need for additional fuel
it outlasts the mining
                                  underground, and the associated increase in mine water requiring        storage. Construction of two new 18 million litre tanks will bring
operation. This is the true
                                  treatment, Diavik has added and raised impervious dams to               the total to six. As well, there will be a need for an expanded
meaning of sustainable            increase water storage capacity.
development.                                                                                              power distribution system, including cabling, transformers, and
                                     In addition to the North Inlet dam work, Diavik is raising           substations.
    At site we have made          dam levels around its processed kimberlite containment area to
significant progress and           increase that structure’s storage capacity.
achieved important
milestones in recent months,      Accommodations/Offices
including:                           Diavik will need to expand its main accommodation complex               New President Joins Diavik
• We achieved our best            for increased workforce. Underground mining also means there
    ever recordable injury        will be a need for more offices and what is known as a mine dry,               Diavik Diamond
    free period of 88 days.       a facility for underground miner gear.                                     Mines Inc. is pleased
• Substantial progress has        Crusher/Paste Plant                                                        to announce that
    been made on the surface                                                                                 Kim Truter has been
                                     For underground mining, Diavik will combine crushed granite,
    works required for the                                                                                   appointed President
                                  water, and concrete to make what is known as paste backfill. A
    underground operation.                                                                                   and Chief Operating
                                  crusher will supply rock to the paste plant and make crushed rock
                                                                                                             Officer of Diavik.
• We progressed                   for various mine needs, such as roads. To eliminate dust, these
    our underground                                                                                             Mr. Truter joined
                                  buildings will be enclosed. Inside, dust will be managed through
    development (tunnels).                                                                                   Diavik in October
                                  dust collection and air filtration.
                                                                                                             from Rio Tinto Coal
• We were granted our
                                                                                                             Australia where he
    water licence for a period
                                                                                                             was General Manager
    of eight years.
                                                                                                             of Mount Thorley
    I look forward to many
                                                                                                             Warkworth, a large-       Diavik President Kim Truter
more positive milestones as
                                                                                                             scale surface coal
we now embark on the next                                                                                    operation.
chapter in the life of Diavik.                                                                                  After completing a Bachelor of Science degree in mining
    I also wish to remind                                                                                    engineering and receiving diplomas in mine surveying
everyone that our value                                                                                      and linear geostatistics, Mr. Truter began his career as a
is that if it cannot be done                                                                                 miner with Rand Mines in South Africa. He advanced
safely it will not be done at                                                                                to management positions, among them mine planning
Diavik.                                                                                                      manager at Richards Bay Minerals and mine operations
                                                                                                             manager at Hamersley Iron, both Rio Tinto operations. His
                                                                                                             mining career includes 10 years underground experience
Kim Truter
                                                                                                             in deep level hard rock, highly automated nickel mining,
President                                                                                                    and coal mining. Surface mining experience includes
                                                                                                             mineral sands, iron ore, and thermal coal.
                                  Diavik’s new crusher plant under construction.

                             Diavik Diamond Mines Inc. • Phone: 867-669-6500 • Fax: 867-669-9058 • E-mail: info@diavik.com • Web site: www.diavik.ca
Process Plant Staff Add to Technical Skills
   At Diavik, we began training                coordinate and monitor the plant’s         shift, as well as the control room               separate the diamonds from the non-
process plant operators early.                 various machines that crush the            operator, there are several technicians          diamond material.
   Under the plan, our trainees                diamond-bearing kimberlite ore down        at work in the 11-storey process plant.             In addition to the CCRO
advance though four levels to achieve          to the desired size for the plant’s            To date, six trainees have completed         designation, plant workers can gain
central control room operator (CCRO)           cyclones, where a density-based,           all four operator levels. Currently, 16          Mineral Technologist designations
designations.                                  non-chemical process creates a heavy       others are in varying stages of their            certification from the Northwest
   From the mine’s computerized                mineral concentrate of rough diamonds      training. Two-thirds are northerners.            Territories Apprenticeship Board. At
central control room, operators                and indicator minerals. On any given           Two process plant workers are also           Diavik, over the past year, two central
                                                                                          fully trained in the recovery plant              control room operators and two ore
                                                                                          where the material is subjected to               processing trainers have completed this
                                                                                          x-rays, magnets, and a grease table to           program.

                                                                                                Production Remains Strong

                                                                                                                          A154 North Pipe
                                                                                                                            Rockfill Cap

Aaron Campbell, who has completed operator level II, is among 16 process plant workers
progressing toward central control room operator certifications.
                                                                                                                          A154 South Pipe

88 Days a Safety Milestone
   During the third quarter, Diavik’s          rate of 0.96 and a lost time injury
                                                                                                    Diamond production continued to be strong in the third quarter with
workforce reached a safety milestone           frequency rate of 0.52. In other safety
                                                                                                3.1 million carats recovered. Ore was largely from the A154 South pipe,
– 88 consecutive days with no medical          news, the Diavik Mine Rescue Team
                                                                                                with lesser production from the A154 North pipe. Through the first nine
treatments or lost time incidents.             won the underground firefighting
                                                                                                months of 2007, diamond production was nine million carats. To allow safe
Unfortunately, two lost time injuries          event at the Western Regional Mine
                                                                                                underground mining of the A154 North pipe, Diavik is building a concrete
did occur late in the quarter, resulting       Rescue Competition in September in
                                                                                                rockfill cap over the pipe, top centre. Just right of the A154 North pipe, a
in a year to date all incident frequency       Fernie, B.C.
                                                                                                small blast occurs at what will be a second underground access. Foreground
                                                                                                is a blast in the A154 South pipe.

Majority of Operations Employment
and Business Spending is Northern                                                               Diavik at a Glance
   At Diavik, we are committed to                 On business spending, we have             The Diavik Diamond Mine is located 300 kilometres northeast of Yellowknife,
creating local benefits from our work.          now reached total spending of                NWT. It consists of three diamond-bearing deposits, called kimberlite pipes,
    The latest Diavik socio-economic           $3 billion, of which 74 per cent, or         located just offshore of a 20-square-kilometre island, under the waters of Lac de
report shows a significant portion of           $2.2 billion, is northern. This includes     Gras. To mine these underwater ore bodies, Diavik has built dikes out from the
the employment and business benefits            initial construction, operations since       island surrounding the pipes.
associated with the mine are with              2003, and new construction. For the six
                                                                                            •    Initial construction completed – January 2003
northerners and northern companies.            months ended June 30, spending was
                                                                                            •    Initial capital cost – C $1.3 billion
   For the first six months of 2007,            $375 million, with 68 per cent northern.
                                                                                            •    Reserves (2006) – 24.5 million tonnes at 3.3 carats per tonne
Diavik’s workforce averaged 773                   Details of Diavik’s socio-economic
                                                                                            •    Three ore bodies called A154 South, A154 North, and A418
people, of which 513 were northern.            benefits are in the Socio-Economic
                                                                                            •    Annual ore production – approximately two million tonnes
Approximately half of the northern             Monitoring Agreement report posted
                                                                                            •    2006 diamond production – 9.8 million carats
workforce is Aboriginal.                       on www.daivik.ca.
                                                                                            •    Total mine life – 16 to 22 years (currently in year 5)
                                                                                            •    Operations workforce – approximately 775
                                                                                            •    Total operations and construction spending – C $3 billion (74% northern)
 Operations Employment                                  Total Spending
                                                                                                                                                         Diavik ore bodies
         34%                                             32%                                                                                                                     NORTH
       Southern                                        Southern                                                                                                      A154 dike
                        66%                                             68%
                      Northern                                        Northern


Water Licence Renewed                                                                                                     Underground access

   During the third quarter, the federal       process which included various                                                                                         A418 dike
government approved the renewal of             technical and public hearings.
the Diavik water licence. The renewed             The new licence was granted,                                                                                  Lac de Gras
licence, covering eight years, was             subject to substantially increased
effective November 2007 and replaces a         environmental monitoring, reporting
previous seven year licence.                   and management controls, revised             A21 Underground access
   The Wek’eezhii Land and Water               discharge limits, and increased                                                                 0          800         1600
Board, established under the Tlicho            numbers and types of ongoing annual
                                                                                                                                                   Scale in Metres
Land Claims and Self-Government                approvals.
Agreement, recommended renewal of                 Diavik continues to operate in                                                  A21
the licence to the Minister following          compliance with all environmental            Image, taken July 2007, of the Diavik Diamond Mine, East Island, Lac de Gras, NWT.
an intensive, two year public review           permits, licences, and authorizations.

   Want to Learn More?
  For more information about the Diavik Diamond Mine, please visit our web site at www.diavik.ca. Information may also be obtained from the Diavik Diamond
Mines Inc. head office in Yellowknife, where you can also visit our Diavik Visitors’ Centre, open Monday through Friday from 8:00 a.m. to 5:00 p.m.

                                            Diavik Diamond Mines Inc., P.O. Box 2498, 5007 - 50 Avenue, Yellowknife, NT, Canada X1A 2P8

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