Tahera Ceases Jericho Mine Operations
December 16, 08
As expected, Tahera Diamond Corporation closed the Jericho diamond mine in Canada. Last Friday Tahera received court approval to cease operations at the mine on Saturday.
 Despite lucrative marketing deals for goods from Tahera's Jericho mine (above), the company did not take off |
The court approved an extension to the stay period until January 23. During this time, it will complete the sale of its remaining assets.
The Department of Indian and Northern Affairs Canada (INAC) intends to retain former employees of Tahera to conduct the ongoing care and maintenance activities at the diamond mine.
This is the end of what was to be Canada’s third diamond mine and the first in Nunavut. The start was very promising. In March 2003, it signed a letter of intent for rough diamond marketing with Diamond Trading Company (DTC) Sightholder Lazar Kaplan.
The first signs of trouble came in October of that year when Australian mining investor Joseph Gutnick resigned as president, CEO, chairman and director of Tahera. The reason for his resignation was not publicly disclosed.
As work progressed, Tiffany agreed to buy or market all of the diamond production from Jericho and provide a $28 million loan to assist in the construction of the project.
Most of the construction work was completed in 2005 and the first diamonds were produced in January 2006. Tahera declared commercial production on July 1 and in August Tahera officially opened the diamond mine.
But a year after the opening ceremony, Tahera found it difficult to take off, selling goods at an average of $92.70 per carat and reporting large operating losses.
By January of 2008, Tahera’s fate seemed all but sealed when it obtained protection from creditors under the Companies' Creditors Arrangement Act (CCAA) from the Ontario Superior Court of Justice. In May it started laying off staff and in the beginning of December it announced cash reserves will be exhausted by December 22.