De Beers Canada says it has signed an agreement with Tahera Corporation for exploration and potential development of its property next to Tahera's Jericho Diamond Project in Nunavut in a further indication of the importance it places on pushing for growth in Canada.

 

The property covers around 36,000 hectares and includes four known diamondiferous kimberlites, including the large Muskox pipe 14 kilometers west of the Jericho project.

 

The agreement allows for one or more projects on the property to be developed individually and in each case the operator will market the production.

 

Describing the deal as "a natural fit” for both firms, Richard Molyneux, President and CEO of De Beers Canada, said "We believe that this partnership with Tahera is the most efficient means to move these kimberlite discoveries forward and this will put us firmly on the map with project development in Nunavut".

 

“The significance of this agreement is its flexibility regarding who will be the operator and how the product will be marketed,” he added.

 

Under the terms of the agreement, Tahera will earn a 50 percent interest in the property through expenditures of C$11 million ($8.2 million) by 2008. Each party may increase its interest in individual development projects depending on the project value.

 

For projects with a value of C$750 million ($555.7 million) or less, Tahera will be the operator and may increase its interest to 75 percent by making certain payments to De Beers.

 

For larger-scale projects where the construction of a new, stand-alone processing plant is economic, De Beers will be the operator and may increase its interest to 70 percent by making certain payments to Tahera. The operator will market production in each case.

 

De Beers has two mining projects under development in Canada, Snap Lake in the Northwest Territories and Victor in Northern Ontario. The Snap Lake project just received Federal approval.

 

De Beers' land holdings in Canada are approximately 163,000 sq km, of which around 139,000 sq km are in Nunavut.

 

"Our priority is to evaluate and move our projects through to production as quickly as possible. We see partnerships as a key component to our growth in Canada and we are actively targeting the ideal partners for each ownership scenario. To support this we have set up a dedicated joint venture engagement team," said Molyneux.

 

De Beers has five active joint ventures in Canada and negotiations are taking place with several other exploration companies.

 

Of the De Beers Group global exploration budget of $92 million for this year, 43 percent will be spent in Canada.