As previously reported by Jeweller, De Beers announced production at Snap Lake mine, in Northwest Territories, Canada, would be brought to a halt in December 2015 and the site placed into an “extended care and maintenance” phase.
Last month, the Mackenzie Valley Land and Water Board granted interim approval to allow the diamond company to proceed with plans to flood the mine’s underground workings before the end of the year.
At the time, it was stated this was to preserve the mine as a long-term asset following a review of its operations in light of market conditions.
“We remain focused on preserving the significant diamond resource within the Snap Lake mine”, CEO of De Beers Canada, Kim Truter, said in June.
De Beers has now confirmed its intentions to sell the mine and is holding off on the flooding procedure in case a buyer can be found.
“As we work towards the flooding process scheduled for later this year, I can confirm that we have engaged [financial services provider] BMO Capital Markets to determine if there are other qualified operators in the market who may wish to buy Snap Lake,” a De Beers spokesperson told Jeweller.
“If no suitable qualified buyer is found, we will proceed with the controlled flooding of the underground workings.”
Reuters reported De Beers Canada spent CAD$2.2 billion (AU$2.2 b) on mine construction and operation up to the end of 2014. It was also said that that mine “had not made money since production began in 2008”.
Snap Lake challenges
According to a report by Anglo American, De Beers’ parent company, 280,000 carats of rough diamonds were produced at Snap Lake in the fourth quarter of 2015, shortly before ceased operations.
This marked a 7 per cent increase when compared with the corresponding period in 2014; however, Anglo American reports from 2015 and 2014 stated Snap Lake’s “complex ore body” and other challenges around water storage had an effect on productivity levels.
Snap Lake was said to be De Beers' first mine built outside of Africa and was initially planned to operate until 2028.
De Beers has scaled down its global rough production reportedly in response to challenges facing the industry such as falling prices and waning demand.
The company’s spokesperson said the ore body contained approximately 20 to 30 million unmined diamond carats.
“While we have no firm timeline for a potential re-start at this stage, we believe the long-term value of the ore body is significant and the responsible approach is to bring this asset back into production at some point in the future, creating economic value for the operator, the communities and the people of the Northwest Territories,” the spokesperson added.
The news follows De Beers’ decision to put its flagship Kimberley diamond mining operation in South Africa, which was said to have dominated the diamond industry for nearly a century, up for sale last year.
It was sold to a consortium known as Ekapa Minerals for approximately US$7.2 million (AU$9.8 m) in December 2015.
De Beers also operates the Victor Mine in Ontario, Canada.
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