Diavik Diamond Production Falls 31% in Q1

Diamond production from the A154 South pipe at Diavik in the first quarter totaled 1.8 million carats, a 31 percent decline over the same quarter last year, due to lower ore grade and processed volumes.

According to mine operator Diavik Diamond Mines Inc. (DDMI), extremely cold temperatures in the first quarter affected equipment reliability and productivity, resulting in lower ore recovered and processed.

Mining activity is still taking place at a low grade area of the A154 pipe.

In its quarterly report, DDMI also said that work on the new A418 open pit is continuing as planned, with diamond production expected to begin in the next quarter. Underground development work reportedly remained largely on schedule, advancing the approximately 20 kilometers of access tunnels and ventilation raises.

Construction of surface infrastructure to support underground mining continues on the crusher and the paste backfill plant, and on the expansion of the water treatment and power plants. Diamond production from underground is scheduled to begin in 2009, and is expected to replace open pit mining by 2012.

In exploration, a large diameter reverse circulation drilling program was successfully conducted to obtain an additional bulk sample to better define the A21 kimberlite pipe, located near the existing mining operations. Results are pending. In addition, DDMI has mounted an exploration program on its claim block around the mine, with a budget of $10 million for 2008.

The miner estimated Diavik’s ore reserve at the end of 2007 in the A154 North, South and A418 pipes at 21.9 million tons. The ore grading is 3.5 carats per ton for a total of 77.1 million carats. Diavik has produced 41.5 million carats since production began in January 2003.

Diavik, with no lost time due to injuries and only two medical treatments, has been selected to receive the John T. Ryan Regional Safety Trophy for the third time in its five years of operations.

The diamond mine is an unincorporated joint venture between DDMI (60 percent), a wholly owned subsidiary of Rio Tinto, and Harry Winston Diamond Mines Ltd. (40 percent).