Diamonds in Canada May 2016

—IN CANADA—

MAY | 2016

ROCK HOUNDS

THE LATEST NEWS FROM CANADA’S MINERS

+

Q&A

WHY DIAMOND STOCKS ARE STILL SHINING

DOMINION’S TOUGH YEAR

Complimentary PM no. 40069240 MAY 2016 v 1

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Contents 8

MAY 2016

12

20

EDITORIAL

ROCK HOUNDS

A bit of excitement . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Our annual roundup of Canadian-listed diamond miners, developers and active juniors

By Alisha Hiyate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

TOUGH YEAR TESTS DOMINION Miner pursues ‘twin track’ approach to growth

By Alisha Hiyate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ON THE COVER: The Diavik Foxfire 187.7-carat diamond.

STORNOWAY ADDS THREE YEARS TO MINE LIFE AT RENARD

WHY DIAMOND STOCKS HAVEN’T LOST THEIR SHINE

By Trish Saywell. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

A Q&A with BMO mining analyst Edward Sterck. . . . . 8

GAHCHO KUÉ SHIFTS THE FUTURE OF DE BEERS CANADA

Credit: Rio Tinto

By Lesley Stokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Digital copy available to subscribers at www.northernminer.com

80 Valleybrook Drive, Toronto, ON M3B 2S9 Phone: (416) 510-6768 Fax: (416) 510-5138 E-mail: ahiyate@northernminer.com

PUBLISHER: Anthony Vaccaro

EDITOR: Alisha Hiyate

ADVERTISING SALES: Joe Crofts Michael Winter

ART DIRECTOR: Melissa Crook

PRODUCTION MANAGER: Jessica Jubb CONTRIBUTING WRITER: Lesley Stokes & Trish Saywell

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A bit of excitement ALISHA HIYATE EDITOR

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The mainland Chinese market is changing from a luxury-driven market to one that’s being driven by an expanding middle class.

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ot long after Lucara Diamond installed a large diamond-recovery circuit at its Karowe mine in Botswana last year, the mine produced a record-breaking stone.

The 1,109-carat Lesedi La Rona is the largest gem-quality stone recovered in over a century — the 3,106-carat Cullinan diamond, found in South Africa in 1905, being the only one to surpass it.

The Type IIa stone hasn’t yet been sold, but it’s sure to fetch a price as exceptional as the diamond itself. What’s even more interesting than this particular diamond is Karowe’s larger potential. Lucara is now installing a mega-diamond recovery circuit at Karowe, meant to avoid breaking diamonds over 1,000 carats. At US$15-18 million, the cost is tiny compared to the value of the stones it could recover.

Lucara’s story is a bit of good news in a sector that could use some excitement right now.

In our last issue, I wrote that the diamond market was in wait-and-see mode. Now that the typically busy holiday season is behind us, we can clearly see that the market is in oversupply. Major producers responded to the imbalance in the second half of 2015 by holding back inventory from the market and cutting production. But that wasn’t enough to stop rough prices from sliding 12-15% for the year.

The good news is that there was strong buying over the holidays in the U.S. — still the world’s biggest market for diamonds.

As about 40% of U.S. buying happens over the holiday season, the healthy demand has started to clear out inventories in the middle pipeline.

In addition, Dominion Diamond’s executive vice-president Jim Pounds noted on a recent conference call that Chinese retailers, which

have been absent from the market as they tried to sell down their inventories after overestimating the growth in demand last year, are starting to come back to the market.

While the Hong Kong and Macau markets remain weak “as a result of the slowing mainland tourist trade,” Pounds remarked that the mainland Chinese market was changing from a luxury-driven market to one that’s being driven by an expanding middle class.

Prices have been stronger than expected in the first few months of 2016. De Beers’ sights have so far increased progressively in value, from US$540 million to US$610 million and finally US$660 million.

But don’t expect a recovery in prices in the short-term. Despite a strong start to the year, BMO Mining Analyst Edward Sterck thinks we’ll see a softening market through the end of the year.

He projects it won’t be until 2017 and beyond that we start to see 5-7% annual increases in rough prices (see Page 8).

In the meantime, Canadian-listed diamond miners, developers and explorers are setting themselves up for big gains when the market does return (See page 12).

In closing, we’d like to extend a big congratulations to Pat Sheahan, who was honoured with the Prospectors & Developers Association of Canada’s Distinguished Service Award in March. In 1972, Sheahan founded a worldwide technical information service for explorers that has become “indispensable” for diamond explorers, and was profiled in the November 2011 issue of Diamonds in Canada.

Congratulations also goes out to Lucara Diamond, which won the PDAC’s 2016 Environmental & Social Responsibility Award.

As ever, we welcome your feedback at ahiyate@northernminer.com.

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Tough year tests

Dominion The Ekati mine, in the Northwest Territories.

Credit: Dominion Diamond

LEFT: Rough diamonds from the Ekati mine.

Credit: Dominion Diamond

BY ALISHA HIYATE

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t’s been a turbulent year for Dominion Diamond (TSX: DDC; NYSE: DDC).

2015 was always expected to be a transitional year for the miner: At its 88.9%-owned Ekati mine, the company knew it would be mining lower-grade ore before starting to mine the extremely rich Misery Main pipe in 2016 (Dominion’s fiscal 2017).

But a slide in diamond prices combined with lower-than-expected quality diamond production from the Misery Southwest Extension at Ekati, and demands by activist shareholders near the end of the year all ramped up the challenges for the miner.

The company reported a net loss of US$34.9 million or 41¢ per share in its fiscal fourth quarter, ended Jan. 31, 2016, compared with a loss of US$2.2 million in the same quarter a year earlier.

Part of the wider loss was due to rough diamond prices. For the year, prices were down 10% for Dominion — in the fourth quarter alone, they dropped by 5%.

Adding to the loss was a US$19.8 million inventory impairment recorded on “work in progress” inventory at Ekati, due to lower than expected quality of material being mined from Misery Southwest. Estimated prices for goods from the Misery Southwest Extension were lowered to US$40-55 per carat from a modeled price of US$70.

“Approximately 60% of the carats we recovered in the fourth quarter were low-value material from Misery Satellites and coarse ore rejects, both of which are non-reserve material,” said CEO Brendan Bell in a conference call. “Following the single-sourced sampling of Misery Southwest material in

October, we confirmed that Misery Southwest diamonds were of lower value than originally modeled.” Efforts to increase diamond liberation at the Ekati plant – although successful — also slowed throughput. Processing volumes were 12% lower than the previous year, with throughput decreasing to 10,500 tonnes per day from 12,000.

Dominion’s 40%-owned Diavik mine also saw reduced production. In 2015, production was 9% lower than planned at 6.4 million carats due to a combination of lower mining rates from the A-154 North kimberlite, lower grades from A-418, and availability of the process plant in the fourth quarter. Operator Rio Tinto (NYSE: RIO; LSE: RIO) owns 60% of the mine.

Despite the operational and market challenges, Dominion still generated positive free cash flow of US$27.5 million for the fourth quarter. It spent US$56.1 million on the Misery Main, Sable and Pigeon pipes, the Jay feasibility and the development of the A21 pipe at the Diavik mine against strong operating cash flow of $83.6 million.

Activist challengei But as rough diamond prices sank in 2015 — by about 12-15%, according to BMO Capital Markets — so did Dominion’s share price. From a high of nearly $24 mid-year, the stock sunk to as low as $10.50 in November.

Late last year, a group of activist investors holding 5.4% of Dominion’s stock complained that the miner’s shares were undervalued and that management was not doing enough to address issues around project priorities, capital allocation, diamond marketing and corporate governance.

Soon after, Dominion came to an agreement with the group, appointing former De Beers Canada CEO, and more recently

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co-president of Barrick Gold, Jim Gowans as chairman in April.

Gowans replaced company cofounder, ex-CEO and Dominion chairman for 12 years, Bob Gannicott. Gannicott, who was on medical leave during much of 2015, will remain a director. The company also appointed investment fund portfolio manager Josef Vejvoda to the board.

Meanwhile, two Dominion directors also resigned in December.

The turbulence at Dominion appears to be over — at presstime, its shares were back up near $16. The diamond market also started to pick up in the first quarter, Jim Pounds, executive vice-president, noted in a conference call in April.

However, Dominion is still in the middle of a strategic review announced in late December.

The company hired an investment firm to help it maximize shareholder value. CEO Brendan Bell says Dominion will provide more information on the review at the end of May, when it expects to release a feasibility study on Jay. The company has also confirmed that it’s doing optimization work to lower costs at Jay. A prefeasibility released in January 2015 pegged initial development capital for the project at US$657 million. Over an 11-year mine life, the study projected Jay’s post-tax net present

value at US$610 million and its post-tax internal rate of return of 16%, using a real discount rate of 7%.

While diamond prices have declined since the Jay study was compiled, pricing in Canadian dollars has actually remained at comparable levels because of the decline in the Canadian dollar.

Jay is currently in the permitting stage with a decision by the Northwest Territories’ Minister of Lands expected in May. The Mackenzie Valley Environmental Impact Review Board has recommended development be approved, subject to 22 measures. Dominion believes it can meet the conditions without compromising the project’s economics.

Misery Maini Operationally, the company will continue to invest this year, but will see a big increase in cash flow from Misery Main.

First ore at Misery Main was mined in the fourth quarter, with revenues from the pipe expected to flow starting in the second half of 2016.

While Misery Main diamonds are not particularly high value at US$75 per carat, Dominion expects to be able to pay for the development of Jay with cash flow from the pipe because of its exceptionally high grade of 4.7 carats per tonne. It is also expecting partners at Jay (including Archon Minerals) to

Largest diamond recovered in over 100 years

1,109 carat Type IIa diamond Historical in its recovery, brilliant in its appearance.

WHERE BIGGER ISTM lucaradiamond.com

TSX, BSE, OMX: LUC

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We have adopted a twin-track approach to building our future.

—Dominion CEO Brendan Bell

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contribute their share. Dominion owns 65.3% of Jay. In addition to advancing Jay, Dominion will spend $55 million this year on development at Sable, where first production is expected in fiscal 2019.

The pipe, which has a 10-year mine life, is part of the Core Zone at Ekati, in which Dominion holds an 88.9% interest.

A prefeasibility study for the project, released in February, projects 10.1 million carats could be recovered at Sable from ore grading 0.8 carat per tonne at an initial capital cost of US$142 million. Prestripping capital was estimated at US$85 million and sustaining capital at US$19 million. The study, which used a base-case diamond price of US$140 per carat estimates the project’s post-tax, incremental net present value at US$137 million and a post-tax internal rate of return (using a discount rate of 7%) of 16.2%.

Dominion has a strong balance sheet to support its devel-

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opment ambitions: At the end of January, the company had unrestricted cash and equivalents of $320 million, restricted cash of $63.3 million, and available credit of $210 million.

Rio Tinto and Dominion recently doubled probable reserves at the A-154 North kimberlite at the Diavik mine to 4.7 million tons containing 11.1 million carats. A new mine plan will follow.

In 2016, Dominion expects production at Ekati of 3.7 million carats and Diavik production (on 100% basis) 7 million carats.

Dominion is also investing in exploration, CEO Brendan Bell recently noted.

“From a growth perspective, we have adopted a twin-track approach to building our future,” he explained in a conference call. “Alongside construction of Sable and the advanced valuation of Jay, we have started earlier-stage work on the existing portfolio of kimberlites on the Ekati property and nearby.”

The miner is investing $1.3 million in early stage exploration at its Lac de Gras joint venture with North Arrow Minerals (TSXV: NAR). Analysis of till sample results from a 2013 program in conjunction with historic data suggests there are three strong regional KIM trains on the property, plus local trains and other anomalies to investigate Dominion is also evaluating several undeveloped kimberlites on the Ekati property for further drilling in 2017.

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Q&A

Why diamond stocks haven’t lost their shine

After a 12-15% decline in rough diamond prices last year, 2016 has seen a stronger start to the year. Even so, Edward Sterck, Director of Equity Research, Metals and Mining at BMO Capital Markets, is forecasting a flat year for diamond prices in 2016.

The London, U.K.-based mining analyst spoke with Diamonds in Canada in April about what that means for diamond equities and why he’s optimistic about the diamond market beyond 2016.

Diamonds in Canada: What can we expect in terms of diamond prices this year after a substantial decline last year and a relatively flat 2014?

Edward Sterck: I think if we get rough prices remaining roughly flat then it will have been a good year. We’ve had a reasonably strong start to the year so far — better than the market had been anticipating. Just in terms of demand, if you look at the De Beers and Alrosa sights as proxies for the market as a whole, prices have lifted a bit, but I think the likelihood is we’ll probably see a little bit of softening in terms of the pace of demand. Prices will probably end up back where we started 2015 — that’s exactly where I think I think we’ll finish 2016.

DiC: Despite your outlook for flat prices this year, you have an outperform rating on most of the diamond companies that we’ll be talking about today: Dominion Diamond (TSX: DDC; NYSE: DDC ) Stornoway Diamond (TSX: SWY) and Mountain Province Diamond (TSX: MPV; NASDAQ: MDM). So why are diamond equities a good place to invest right now?

Closeup of a rough diamond from the Ekati mine.

Credit: Dominion Diamond

ES: I’ve got a forecast of flat prices for this year, but if one looks at next year and beyond that, I’m expecting prices to increase 5-7% per annum. Now for the purpose of my modelling, I flatten prices after a couple of years, but 5-7% is in line with the historical rate of diamond price appreciation. So there’s nothing particularly startling in that.

That, I think is a pretty attractive element for investors and if one compares the diamond stocks as a subsector to the whole of the mining sector, the valuation multiples are very attractive.

Furthermore, the balance sheets are generally stronger than the other mining subsectors and if you look at the cash generation going forward, the dividends they’ve started paying, they just stack up really well compared to most of the rest of the mining sector.

To put that into perspective, roughly speaking on 2017 EV/ EBITDA multiples, the diamond stocks are trading at less than 3 times, which looks very good compared to, for example, the golds stocks which are trading at an average of around 9 times.

DiC: There was a bit of a liquidity crisis for diamond cutters and polishers in late 2014 and into 2015 that hurt diamond prices.

Has that liquidity issue been resolved?

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DiC: You noted in a report about a year ago that diamond producers are pretty strong and resistant to a substantial decline in rough prices because of their strong operating margins and strong balance sheets. So how have they fared with the 12-15% drop in diamond prices last year?

Lucara Diamond’s sorting operations in Botswana.

Credit: Lucara Diamond

ES: I think it has, yes. The industry’s in a better position at the moment and people are generally feeling just a little bit more comfortable with everything with the diamantaires exhibiting higher cash flows, lower debt and so on. However, there is always the possibility that the lenders within the industry may in the future continue to downscale their exposure.

ES: I think they’ve weathered the storm pretty well. They still have strong balance sheets — the exception would be Petra Diamonds (LSE: PDL) which is still going through a period of significant capital investment. So last year was a little bit tough for them. For the rest of the space, particularly the Canadian diamond stocks, balance sheets remain strong and in strong financial position. Cash generation last year did take a hit with the decline in diamond prices, but still remained good when compared to the producers of other commodities.

DiC: The bigger diamond producers last year reacted to the drop in rough prices by holding back some inventory from the market and letting sightholders defer purchases. Are the big producers still holding substantial inventories?

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LEFT: The water treatment plant at Stornoway Diamond’s Renard project in Quebec.

Credit: Stornoway Diamond

RIGHT: Construction at the Gahcho Kué mine, in the Northwest Territories.

Credit: Mountain Province Diamonds

ES: De Beers and Alrosa (MICEX: ALRS) allowed significant customer purchase deferrals and ended the year with something like $1.5 billion worth of inventory above normal levels of working inventory. At the same time, De Beers actually curtailed production in response to market conditions, so production guidance for this year is pretty much flat on last year, which was itself lower than in 2014. The lower production from De Beers means that with normalized demand for diamonds, that inventory should be consumed relatively quickly. For Alrosa, it may take a little bit longer if they have the production levels of last year which were fairly strong. I think one of the key factors that resulted in the price decline last year was the absence of big Chinese jewellers from the market. If one looks at Chow Tai Fook and Luk Fook and some of the mainland jewellers, they were operating inventory levels based upon an expectation that Chinese demand would continue growing in the high 20% range. But nothing lasts forever, and demand dropped to the low teens because of the economic slowdown in China and the clamp down on “gift giving.” As a consequence the Chinese retailers were running down those excess inventories themselves last year and they were more or less completely absent from the diamond market.

And that really resulted in the price pullback as the non-Chinese diamantaires also became skittish — if you’ve got 12-15% of the market absent, it has an effect. That’s the other thing about that excess inventory, is if or when we see the Chinese jewellers come back to the market then the restocking could consume the inventories carried over from last year relatively quickly. There are some indications that the mainland Chinese jewellers have begun restocking, but the big Hong Kong and Macau jewellers still appear to be absent.

DiC: We’ve got two diamond mines in Canada that are going to be starting production this year — Gahcho Kué (owned by De Beers and Mountain Province Diamonds) and Renard (owned

by Stornoway Diamond). Are they going to be selling their production into a healthy market?

ES: We’re looking at next year in terms of a first material diamond sale so my expectations are that we’ll see normalization of market conditions by then — the situation should be improved from where we are today. And that’s really good news for those guys.

DiC: Is production from those two mines enough to affect diamond prices at all?

ES: Not really. In my view these are high-quality operations but the production volumes are not that material from a global perspective.

DiC: Your top diamond pick is Dominion Diamond — you have a $22 target on the stock, which is trading around $15.50 at presstime. Why the gap between your valuation and the trading price?

ES: The disconnect reflects in part the softening of diamond prices seen last year, which impacts the producers more that the development companies. There have also been some board changes at Dominion due to investor pressure, and the communication from the company has not necessarily been totally clear in terms of its mine plans, so investors have struggled to understand the corporate strategy. The attractive aspect of Dominion is that the company is expected to generate really serious cash flow once it starts getting into mining the Misery main pipe, which is within the existing mine plan. But with sales from the Misery pipe not expected until the second half of this year, I think investors have just taken the view of why buy it now when you can buy it in 6 months and jump on the bandwagon then? That’s one factor and the other is they have plans to develop the Jay pipe. In their figures, that’s funded internally and on my forecasts Dominion should still have significant levels of

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DiC: The cost of the recovery circuit is only US$15-18 million, so that’s not a huge spend for them.

ES: No, and I would imagine that they wouldn’t make the investment unless they were confident that it would pay for itself. To put that into perspective, we don’t know the value of the 1,111-carat diamond, but if you look at some of the numbers that are being put around in the press and on the street, just one of those diamonds will pay for the mega-diamond recovery circuit quite easily.

excess cash beyond that to return to investors. But I think there’s an erroneous view in the market that Jay may consume the cash generated from Misery so therefore, we wouldn’t really get a massive benefit from Misery.

DiC: You mentioned communication — what is it that shareholders what to hear from Dominion?

DiC: Stornoway’s stock price has been taking off as they get closer to production later this year. They just released a new mine plan — what were your impressions of the plan?

ES: It was a little bit less than my previous estimates, so costs were a bit higher and diamond prices were lower. They take a very conservative view with their diamond price assumptions. So it was a bit of a negative on the numbers, but not enough to change my Outperform recommendation.

ES: I think just a well-articulated mine plan that remains consistently in place for a period of time. They took over the Ekati mine from BHP Billiton (NYSE: BHP; LSE: BLT) a few years ago in a situation which made it quite hard for them to report their mine plan given that not all of the ore being mined had been defined to National Instrument 43-101 standards as BHP didn’t need to worry about that.

The mine plan that’s been communicated to the market as time has gone on has changed on a fairly frequent basis. As a consequence I think that’s created a little bit of uncertainty in investors’ minds.

DiC: Lucara Diamond (TSX: LUC) completed a $55-million plant upgrade last spring at Karowe and they subsequently recovered some pretty impressive diamonds — one of them was over 1,100 carats and now they’re putting in a mega-diamond recovery circuit to recover diamonds over 1,000 carats. How likely are they to find more gem-quality diamonds of that size there?

ES: I think that’s a question that can’t be answered, I’m afraid. We just don’t know.

However, one assumes that the company has enough confidence in the size frequency distribution to justify the investment.

TSXV:NAR

Exploring Diamond Opportunities

in Canada

info@northarrowminerals.com Suite 960, 789 West Pender Street Vancouver, BC V6C 1H2 604.668.8355

@narminerals northarrowminerals northarrowminerals.com

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Alto Ventures

OUR ANNUAL ROUNDUP OF CANADIAN-LISTED PRODUCERS, DEVELOPERS AND ACTIVE JUNIORS.

A 0.14-carat fancy orangey yellow brilliant cut diamond from North Arrow Minerals’ Qilalugaq project.

Credit: North Arrow Minerals

TOP LEFT: The 1,109-carat Lesedi La Rona diamond from Lucara Diamond’s Karowe mine.

Credit: Lucara

TOP RIGHT: Drilling at Kennady Diamonds’ Kelvin project.

Credit: Kennady Diamonds

(TSXV: ATV) Alto Ventures has negotiated more time to earn a 60% stake in the GEFA claims next to North Arrow Minerals’ Pikoo project, in north-central SasBY ALISHA katchewan. It now has until July 20, 2017 to pay North Arrow HIYATE $35,000 in cash and complete a total of $750,000 in exploration work. The junior has already spent $500,000 on exploration and identified multiple kimberlite targets at GEFA. In return for the extension, Alto is issuing 1 million common shares to North Arrow.

Alto has already earned a 100% interest in the nearby Fisher property from North Arrow.

Alto attempted to raise $400,000 in flowthrough and common shares last fall, but the financing did not proceed.

Arctic Star Exploration (TSXV: ADD) North Arrow Minerals began drilling again in March at Arctic Star Exploration’s Redemption project, in the Northwest Territories.

North Arrow can earn up to 55% of the project by spending $5 million on exploration by July 1. By the end of the current drilling program, it will have spent $3.5 million.

The company reassessed its till sampling and survey data after failing to hit kimberlite in 6 of 7 holes drilled at the project in 2014. North Arrow is aiming to find a kimberlite bedrock source for the Coppermine indicator mineral train.

Redemption is located 32 km southwest of the Ekati mine and 47 km west of Diavik.

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Canterra Minerals (TSXV: CTM) Canterra Minerals completed a till sampling program across its South Slave properties in November. The company plans to add the 204 samples collected to its proprietary database of 22,850 till samples, microprobe analyses and 70,000 line-km of airborne and ground geophysics to generate drill targets.

Preparations were also made at the Hilltop property for a 70 line-km OhmMapper survey planned for early 2016.

After a review of in-house data, Canterra added four metallic and industrial minerals permits in two areas to its Buffalo Hills project, 400 km northwest of Edmonton. The land packages are 5 km north of its K91 kimberlite, and 15 km west of its K8 kimberlite.

It’s In a release, Canterra president and CEO Randy Turner noted that the decision came as the result of developing a geologically coherent model for the Buffalo Hills kimberlites. The model suggested that untested geophysical anomalies in certain areas “had a high probability of being diamondiferous kimberlite.”

Canterra also conducted a breakage study on diamonds recovered from the K6 kimberlite in 2008. A 1.77-carat, colourless single tetrahexahedroid crystal was broken during processing. The study concluded, however, that diamond breakage in the sample was minimal. A 231.9-tonne sample from the K6 returned 16.28 carats of commercial-sized diamonds for a grade of 7.02 carats per hundred tonnes.

for testing. The sample was collected from five holes drilled in 2008 — part of an infill drilling program that was cut short by the difficult conditions of the Financial Crisis. The samples returned grades of 0.3 carat per tonne, 0.31 carat per tonne and 1.14 carats per tonne, and yielded 16, 17 and 48 diamonds larger than 0.85 mm, respectively.

The largest diamonds recovered include 0.245-carat, DDC _ DiamondsMagazine _4.5x7.5_Colour _160412 PRINT

Look North.

where you’ll find Dominion Diamond, Canada’s largest independent diamond producer and third largest in the world by volume.

Crystal Exploration (TSXV: CEI) In October, Trigold Resources changed its name to Crystal Exploration to reflect its new focus on diamonds. The junior acquired the Muskox, Contwoyto and Hood River diamond properties in the Slave Province last year.

The claims contain the diamond-bearing Rush, James River and Muskox kimberlites.

Mini-bulk sampling at Muskox, discovered by De Beers and Tahera Diamond, has returned grades of 0.53 carat per tonne in the magmatic phase and 0.35 carat per tonne in the pyroclastic phase. The largest diamond recovered at Muskox, 14 km southwest of the past-producing Jericho mine, was a broken, 2.73-carat white octahedron.

In January, Crystal sent 12 tonnes of previously unprocessed drill core from Muskox

www.ddcorp.ca

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0.365-carat and 0.253-carat stones described as off-white and transparent, with no to minor inclusions.

Further results are expected in the second quarter.

Diamcor Mining (TSXV: DMI) Diamcor Mining secured a long-term water-use licence in April for its alluvial Krone-Endora diamond project, in South Africa. The 15-year licence will allow the company to achieve its processing target of 300,000 tons per month, and help it make a production decision.

Diamcor has not completed any economic studies on KroneEndora; it is using revenue from production during commissioning and testing to advance the project, which so far has a small inferred resource.

A Tomra XRT sorting unit installed at the project last year started processing about 600,000 tons of oversized stockpile in the +26-mm size fraction in December.

The unit recovered a 12.78-carat special and a 7.5-carat diamond in Diamcor’s fourth quarter ended March 31. The diamonds sold for US$4,747.47 per carat and US$4,152 per carat, respectively.

Diamcor sold 6,896.5 carats during the quarter for US$1.03 million or US$149.12 per carat — a 49% increase over the same quarter a year earlier.A former De Beers project, Krone-Endora is located next to the diamond giant’s Venetia mine and is thought to be a direct shift of material from Venetia.

Dunnedin Ventures (TSXV: DVI) Dunnedin Ventures tested three kimberlites in Nunavut last year that were previously held by a joint venture of Shear Diamonds, Stornoway Diamond and BHP Billiton.

It also conducted till sampling, and identified new targets.

A 0.82-tonne sample from the PST kimberlite returned 96 diamonds greater than 0.85 mm for a grade of 5.34 carats per tonne. A 2.4-tonne sample from Notch was being processed at presstime, but had already returned 36 commercial size stones at 40% complete.

The Kahuna kimberlite near Rankin Inlet is a 5.5-km long, 2to 4-metre wide dyke, that has returned a grade of 1.04 carats per tonne in three previous bulk samples totalling over 360 tonnes.

GGL Resources (TSXV: GGL) GGL Resources received $25,000 in a line of credit from

shareholders related to one of the company’s directors in March. The funds will allow GGL to pay property fees and other overhead costs.

The company also closed a portion of a previously announced private placement in November, raising $45,000.

GGL has diamond claims in the Northwest Territories, as well as gold and VMS exploration projects.

Kennady Diamonds (TSXV: KDI) At presstime, Kennady Diamonds was still working on a maiden resource for the Kelvin kimberlite at its Kennady North project in the Northwest Territories. While a resource report was ready early in the year, in February, Kennady announced that more time was needed to capture the north end of the Kelvin North Lobe in the geological model.

The company believes that drilling completed at the north end in late 2015 could account for 20% of the overall tonnage at Kelvin. Kennady expects to release a resource incorporating the new information in the second quarter.

In the meantime, Kennady is continuing a 500-tonne bulk sample at the Kelvin North lobe via large-diameter reversecirculation (RC) drilling. The program is aimed at collecting 1,000 carats of diamonds for valuation and revenue modeling.

The junior has also commissioned a preliminary economic assessment for Kelvin, which should be ready in the fourth quarter.

In March, Kennady discovered a third body at the Faraday kimberlite cluster, when a drill hole about 80 metres southwest of Faraday hit 55.8 metres of kimberlite.

Meanwhile, samples at Faraday 1 have continued to return high grades, including a 0.5-tonne sample that yielded 2.41

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The pit at De Beers’ and Mountain Province Diamonds’ Gahcho Kué mine.

Credit: Mountain Province Diamonds

BELOW LEFT: Construction at Gahcho Kué.

Credit: Mountain Province Diamonds

carats of commercial-sized diamonds for a grade of 4.65 carats per tonne.

In December a 14.7-tonne sample from the Kelvin North Lobe returned 3.29 carats of commercial-sized diamonds for a grade of 3.55 carats per tonne.

Kennady Diamonds was spun off from Mountain Province Diamonds in 2012. As it moves into a more advanced phase, two independent directors and a new CEO have been appointed to provide independent governance. In April, Rory Moore replaced Mountain Province head Patrick Evans as CEO. Moore has 30 years of diamond experience, including as manager of diamond exploration for BHP Minerals.

Lucara Diamond (TSX: LUC) In November, Lucara Diamond recovered the second-largest diamond in history, and the largest in the past century from its Karowe mine in Botswana. The 1,109-carat, gem-quality Type II stone has been dubbed the Lesedi La Rona, meaning ‘Our Light.’

The exceptional diamond was recovered with the US$55million large diamond recovery circuit Lucara finished installing at Karowe last spring. The company installed XRT machines at the processing plant to replace dense media separation processing in the coarser size fractions and recover diamonds up to 1,000 carats. Shortly after recovering the Lesedi La Rona, 813- and 374-carat stones were also recovered.

The 1,109-carat stone, which measures 66 by 56 by 40 mm, is the largest ever recovered by a processing facility. Before its recent upgrade, the Karowe plant couldn’t process anything larger than 35 mm.

Believing the mine could yield even larger diamonds, the company is installing a US$15-18 million “mega” diamond recovery circuit to recover stones greater than 1,000 carats.

For 2016, Lucara forecasts that Karowe will produce more than 350,000 carats of diamonds, generating revenue of $US200-220 million, excluding the sale of the Lesedi La Rona and the 813-carat stone.

Lucara posted earnings of 21¢ per share for 2015 on revenues of $224 million, compared with 13¢ per share on revenue of US$265.5 million in 2014.

The company is off to a good start in 2016: its first special tender of the year generated US$51.3 million from the sale of 10 stones at an average of US$33,632 per carat.

On the exploration front in Botswana, Lucara is expecting sample results from the company’s BK02 kimberlite in the second quarter, and is also conducting a bulk sample at the AK12 kimberlite and trench sampling at AK11.

The company has relinquished its 75% stake in the Mothae project to the government of Lesotho after a sale of the asset fell through last year.

Mountain Province Diamonds (TSX: MPV; NASDAQ: MDM) Mountain Province Diamonds and 51% partner De Beers are on target for first production at their Gahcho Kué mine, in the Northwest Territories in the third quarter.

At presstime, the project was more than 90% complete.

In a release, Mountain Province CEO Patrick Evans noted that in March the joint venture was focusing on remaining earthworks, commissioning of the primary crusher and diamond plant, prestripping and stockpiling of kimberlite.

Evans said that ice road deliveries were being made as planned, and critical large mining equipment had already been delivered to the site.

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As construction nears completion, the joint venture has hired 10 senior operational staff. The appointments included Allan Rodel, a longtime senior De Beers manager and most recently project manager at Gahcho Kué as the operation’s new general manager.

In October, Mountain Province named Reid Mackie, a former manager of sales and marketing for Argyle Pink Diamonds, as its new vice-president, diamond marketing. The company will market its own share of production from Gahcho Kué.

North Arrow Minerals (TSXV: NAR) Recent drilling at North Arrow Minerals’ Pikoo project, in Saskatchewan, has intersected two to four new kimberlites. The most significant discovery was in the North Pikoo area. PK346, which North Arrow interprets as a near-vertical northeast-trending body, is located 25 metres north of PD314, discovered in 2015. North Arrow also completed 2,124 metres of drilling to test new targets and delineate the diamond-bearing PK150, PK311 and PK312 kimberlites discovered in 2013 and 2015. Kimberlite was intersected in 14 of the 19 holes drilled in the North Pikoo, South Pikoo and East Pikoo areas.

Of seven kimberlites discovered so far at Pikoo, four have proven to contain diamonds, including, at South Pikoo, PK150, where a total of 531.1 kg have returned 1,232 diamonds greater than 0.106 mm, including 32 stones larger than 0.85 mm.

North Arrow has earned an 80% stake in the project from Stornoway Diamond; After spending $1.69 million on drilling this year, its interest will rise to 85%.

The junior also has a drill program at Arctic Star Exploration’s Redemption project (see Page 12). To fund the campaign, North Arrow sold a royalty interest on base and precious metals in Redemption for $800,000 to Umgeni Holdings International, a company connected with North Arrow director Chris Jennings.

Lastly, North Arrow’s Qilalugaq project in Nunavut may see more work in the future after disappointing but inconclusive results from the valuation of a 383.55-carat parcel last year. The diamonds were valued at US$36 per carat, with a possible high model price of US$92 per carat. However, the small sample size and the presence of two distinct diamond populations — including a population of rare Type Ib yellow stones — mean that a larger sample is required.

Olivut Resources (TSX: OLV) Olivut Resources completed a $340,000 private placement in October.

Insider Pierre Lassonde increased his stake to 16.7% by buying 571,400 flow-through common shares priced at 17.5¢ each for a total of $100,000.

President and CEO Leni Keough purchased 50,000

Rio Tinto and Dominion Diamond’s Diavik mine.

Credit: Rio Tinto

The Pangolin team at the Malatswae project, in Botswana.

Credit: Pangolin Diamonds

common shares. A total of 1.8 million common shares were issued at 13.5¢ per share, generating $240,000.

In preparation for a better financing environment, Olivut is defining new drill targets at its HOAM project in the Northwest Territories, based on its extensive regional airborne geophysical database.

Pangolin Diamonds (TSXV: PAN) Botswana-focused explorer Pangolin Diamonds closed a $693,000 private placement of 13.9 million units at 5¢ a unit (one share and a 5¢ warrant) in April. Insiders represented $100,000 or 14.7% of the offering. (Pangolin also raised $628,600 in September.)

The funds will be used primarily to continue exploration, including drilling at its Malatswae project, 90 km southeast of the Orapa mine.

The company has so far discovered 11 diamonds through soil sampling in three different areas of Malatswae: the MSC, Modala, and most recently MTS grid areas. Nine of the diamonds are white, and two brown. Sampling has also returned many KIMs, including pyrope garnets with near-source surface features.

Five of 30 targets tested so far have not hit kimberlite.

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Further drilling, guided by the soil sample results, is planned for this year.

Peregrine Diamonds (TSX: PGD)

open-pit development is expected in 2018. Current operations are underground only.

The Diavik mine plan extends to 2023.

Rio Tinto recently appointed Simon Trott to lead its Diamonds business, replacing Jean-March Lieberherr.

Last June, the company sold its Zimbabwe diamond assets to local partner RioZim Ltd.

Peregrine Diamonds is working towards a June release of a preliminary economic assessment for its Chidliak project, in Nunavut.At presstime, a maiden inferred resource for the CH7 kimberlite was also due out.

In the meantime, it has increased inferred resources for Rockwell Diamonds (TSX: RDI; JSE: RDI) the CH-6 kimberlite at Chidliak by 33%. CH-6 now contains In late 2015, alluvial miner Rockwell Diamonds conducted a 11.4 million carats in 4.6 million tonnes grading 2.45 carats strategic review of its operations in South Africa. As a result, per tonne. the company is restructuring, closing its head office in JohanIn January, Peregrine announced that an 814-tonne bulk nesburg and transferring personnel to the Middle Orange River sample from CH-7 yielded a grade of 0.88 carat per tonne and area where its operations are located.

717.65 carats of diamonds of +1.18 mm and greater. Fifty-three Early this year, Rockwell stopped mining at its Saxendrift weighed 1 carat or more and 183 were more than 0.5 carat. mine, which has reached the end of its economic life. Mining As a high proportion of the diamonds were broken during will continue by contractors who will keep any revenue genercollection of the sample via RC drilling, the company believes ated minus a 10% royalty to Rockwell. the grade is conservative.

The company is also recommissioning its Wouterspan mine A valuation of CH-7 stones (the 717.65-carat parcel plus at a cost of $4.4 million, using processing and mining equip47.29 carats of previously recovered diamonds) in March rement from Saxendrift, and other closed operations. The project will be able to handle 200,000 cubic metres of material a vealed a base modeled price of US$114 per carat, and a modmonth with commissioning expected mid-year. Rockwell is eled average price ranging from US$94 per carat to US$155 also bringing its Remhoogte-Holsloot Complex operations per carat. The eight highest-value stones (between 1.35 carats up to 180,000 cubic metres a month by increasing in-field and 5.33 carats) had an average value of US$1,619 per carat. screening capacity.

The highest-valued diamond, a 5.33-carat sawable, white/ A fatality at Rockwell’s Remhoogte plant in September, a colourless octahedron with no inclusions, was valued at weak diamond market, and lower grades at its mines negatively US$16,555 or US$3,106 per carat. affected Rockwell’s third quarter, ended Nov. 30. Cont. on pg.22 White gem goods make up 25-30% of the parcel, with brown diamonds making up the same proportion.

The modeled prices take into account the high level of diamond breakage, particularly www.crystalexploration.com info@crystalexploration.com of seven large stones that would have been 3 carats or larger before breaking.

In Botswana, Peregrine has budgeted $550,000 for exploration this year. The program will focus on its recently acquired Sikane licence, a former De Beers project that contains diamond-bearing kimberlites.

Five kimberlitic occurences will be tested Unlocking Untapped Potential with about 500 metres of core drilling.

Rio Tinto (NYSE: RIO; LSE: RIO) In December Rio Tinto unveiled a 187.7-carat diamond mined at its 60%-owned Diavik mine in August. The Diavik Foxfire is the largest on record ever recovered in Canada.

Rio and 40% joint-venture partner Dominion Diamond, are spending US$350 million to develop the A21 kimberlite pipe at Diavik – the fourth to be mined. First ore from the

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Stornoway adds

THREE YEARS

TO MINE LIFE AT RENARD

A

BY TRISH SAYWELL

new mine plan that incorporates revisions to mineral resource estimates completed in 2013 and 2015 adds three additional years of production to Stornoway Diamond’s (TSX: SWY) Renard project, which will become Quebec’s firstever diamond mine when commercial production kicks off in December.

The plan, released just six months before the first ore is scheduled to be processed at the end of September, has extended the mine life to 14 years from 11 years, based on a 24% increase in probable reserves.

“We’re progressively converting pieces of the large resource inventory to the mineral reserve and into the mine plan,” Matt Manson, Stornoway’s president and CEO, says of the diamond project, 350 km north of Chibougamau in the James Bay region.

“We’ve updated our resource statement twice since we put out the feasibility study in 2013 and so we have a larger indicated resource that fed through to the mine plan and into reserves.”

Probable reserves have grown to 22.3 million carats in 33.4 million tonnes averaging 0.67 carat per tonne from 17.9 million carats in 23.8 million tonnes averaging 0.75 carat per tonne. The lower grade is due to the addition of new lower grade material within the open pit and underground mining envelopes.

Stornoway is also five months ahead of schedule

and $36 million under budget. In April 2014, the project’s capital cost to complete was estimated at around $811 million. Now it’s down to $775 million, including all costs, contingencies and escalation allowances.

“When we started construction in July 2014 the schedule was to achieve commercial production in May 2017 at a capital cost of $811 million,” Manson says. “On February 3, we announced that we were ahead of schedule and that we would be coming in with the first ore in September 2016 and commercial production by December 31 — five months ahead of schedule. That’s hugely important.”

Manson puts the company’s development success down to execution.

“We’ve been able to move very quickly and so that’s why we’re ahead of schedule and below budget — we’re doing everything faster and there is a savings in doing everything faster.”

It’s also helped that few other projects are being built in the mining space, so there’s been less competition for resources.

“We’ve really been able to capture a lot of efficiencies that are in the current construction market,” he notes. “We’ve had a free run at suppliers, at contractors, and people, and so we’ve been able to move very quickly.”

In addition, Stornoway has benefited from a weak Canadian dollar as some of the money it raised to build Renard was in U.S. dollars.

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Construction of the conveyors at Renard.

Credit: Stornoway Diamond INSET:

The Renard site, in Quebec.

Credit: Stornoway Diamond Credit: Stornoway Diamond

“That’s as deep as we can expect with the ramp that we’ve got, but we know the orebody goes down to below 1,000 metres, and at that depth it’s about a one hectare cross-sectional area,” he explains. “This is about one hectare at surface and 1.6 hectares at 600 metres, so it’s like a tube with a bulge in the middle.”

In addition, the project continues to demonstrate a robust valuation and a cash operating margin of 59% after all taxes, royalties and the Renard diamond stream, despite the substantial recent reduction in rough diamond prices, he points out.

According to roughprices.com, there has been a 19% decline in price for rough diamonds between March 2014 and March 2016. Stornoway expects diamond prices will rise by 2.5% a year between now and the end of 2028.

Over the last year, Stornoway has traded within a range of 62¢ and $1.08 on the Toronto Stock Exchange. At presstime shares were trading at $1.04 apiece.

— Trish Saywell is a senior staff writer with The Northern Miner.

Under the revised mine plan, Renard will produce 1.8 million carats per year in years one through ten, up from the previously estimated 1.6 million carats.

In 2018, the processing rate is scheduled to rise from 2.2 million tonnes a year or 6,000 tonnes per day to 2.5 million tonnes a year – 7,000 tonnes per day.

Life-of-mine average operating costs are anticipated to be about $56.20 per tonne or $84.37 per carat.

Mining operations in the Renard 2 and 3 open pits, which began last year, are expected to provide the bulk of ore production until 2018, when production from the underground mine is expected to start. Underground ore will be taken from the Renard 2 kimberlite only between 2018 and 202 and from Renard 3 and 4 between 2027 and 2029.

“The Renard project is on track and getting better,” Eric Lemieux of Pear Tree Securities, commented in a research note.

Stornoway is confident there remains a lot of exploration upside, too. Five kimberlites make up the resource — Renard 2, Renard 3, Renard 4, Renard 65 and Renard 9 — and all of them remain open at depth.

“We believe there’s a lot of additional ore that can be mined below the current mineral reserve and that holds true for all of the ore bodies,” Manson says. “Renard 2 is the biggest and has one of the highest grades, so that’s been the focus, but there are five ore bodies in the current mineral resource and four in the current mineral reserve and all of them are open at depth and all of them are mineable grades.”

At Renard 2, Stornoway has defined mineral reserves down to a depth of 700 metres but Manson says they company knows there’s more below that level.

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De Beers and Mountain Province Diamonds’ Gahcho Kué mine, in the Northwest Territories.

Credit: Mountain Province Diamonds

GAHCHO KUÉ shifts the future of De Beers Canada

W

BY LESLEY STOKES Special to Diamonds in Canada

ith the Gahcho Kué diamond mine more than 90% complete, De Beers Canada and 49% joint-venture partner Mountain Province Diamonds’ (TSX: MPV; NASDAQ: MDM), are on the home stretch towards developing the project, 280 km northeast of Yellowknife.

On track for production in the second half of this year, De Beers Canada CEO Kim Truter says that Gahcho Kué will become the company’s secondlargest producer behind its Jwaneng mine in Botswana, which produced 9.8 million carats last year.

“Gahcho Kué is the largest new diamond mine in the world, and certainly our flagship mine in Canada,” Truter says during a phone interview.

“The way we’re building it will make for a very efficient business, so therefore we need to match it with a very efficient organization.”

The $1-billion, open-pit mine is scheduled to deliver an average of 4.5 million carats a year over a 12-year mine life from three kimberlite pipes — 5034, Hearne and Tuzo.

Which is why, Truter says, the diamond miner is leaving Toronto and moving its Canadian headquarters to Calgary this June.

“We needed to move our centre of gravity closer to our operations in the North … so we’re connected to them, and service their needs better,” he says. “We chose Calgary because it’s the logistical hub, and in our business a lot of our work involves logistics like moving equipment and people.”

Gahcho Kué is welcome news for the territory, after being hit hard in December last year by De

Beers’ decision to place its troubled Snap Lake underground diamond mine on care and maintenance, laying off 434 employees.

Snap Lake produced 1.24 million carats in 2015.

“Snap on its own is a very challenging operation, something will have to change fairly radically for it to come back online — either the market or the way we mine and operate it,” he says. “In some ways our shift to Calgary helps by lowering our cost-base, but at this stage we foresee it staying on care and maintenance for quite a long period.”

With Snap Lake on the shelf, Gahcho Kué will become De Beers’ second operating diamond mine in Canada, alongside the open-pit Victor Mine in the James Bay Lowlands of northern Ontario, which produced 600,000 carats in 2015.

De Beers spent $1 billion on the construction of Victor before reaching commercial production in 2008, and estimates that the mine will contribute $6.7 billion cumulative gross-domestic-produce impact for Ontario during its life.

“Victor is a really wonderful asset, it’s never produced poor financial or operational results,” he says, noting that the mine was recognized in April by “Workplace Safety North in Ontario” as being the safest mine in the province.

Truter says that reserves at the mine are scheduled to diminish by late 2018 to early 2019, but there are “quite a few options” to extend that mine life.

“The Tango extension is one of them but there are other options, like how we could potentially mine the remainder of the orebody, or our low-grade stockpiles we could potentially process,” he says. “We

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De Beers’ Victor mine, in northern Ontario.

Credit: De Beers

“

Efficiency is the heart of what we’re trying to do.

Kim Truter, CEO, De Beers Canada

are focused on seeing how we can extend its life in any way, shape, or form … and we’re reasonably confident that we’ll succeed.”

The Tango Extension kimberlite is one of 19 potentially diamond-bearing kimberlites identified in the vicinity of Victor that De Beers is currently exploring.

In 2015, De Beers’ global production fell 12% to 28.7 million carats, compared to the previous year. The drop was driven largely by cuts in production at the diamond giant’s operations in Botswana. Anglo American (US-OTC: AAUKY; LSE: AAL) owns 80% of De Beers, while the government of Botswana holds a 20% stake.

Truter says that the production cuts were a necessary measure to help restore balance to the diamond market, which has been losing its sparkle in the recent commodity rout.

“De Beers is the leader in the diamond market, and because of that we had to take a leadership position in terms of how we respond to the market,” he says. “So we’ve tried to be very responsible to make sure we don’t contribute to any oversupply.”

For 2016, the company expects to produce between 26 million and 28 million carats.

“We do not anticipate any further production cuts. We’ve already seen some stabilization as a result of our actions,” Truter says, noting that the first two rough diamond sales this year were “certainly better than expected.”

According to a company release, rough diamond demand is showing improvement as excess inventory has worked through the system in recent months. De Beers’ first and second sales this year were valued at US$545 million and US$610 million, respectively.

This is positive news considering that the company saw lacklustre numbers in sales for 2015.

Anglo’s fiscal results showed a 39% reduction in consolidated sales volumes to 19.9 million carats in 2015. That drove down total revenue by 34% to $4.7 billion and dropped earnings before interest and tax down 58% to $571 million, compared to 2014.

“Those two sales were very positive signals for the start of the year,” he says. “But we’re

”

being cautiously optimistic — we don’t want to be too positive about things growing or improving — we’re assuming it’ll stay pretty flat at the moment.”

Truter says that from a Canadian perspective, De Beers aspires to grow its new roots in Calgary and prepare the business for the future.

“Efficiency is the heart of what we’re trying to do — we’re going to make the whole organization more efficient,” he says.

“We’ve got a new leadership structure in place, with really capable people backed by modern technology, and it’s something we’re all proud to be a part of.”

— Lesley Stokes is a Vancouver-based writer with The Northern Miner.

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Stones from Peregrine Diamond’s CH-7 kimberlite at its Chidliak project.

Credit: Peregrine Diamonds

Cont. from pg.17

The company processed about half the volume during the quarter than it had a year earlier, with grades down 25% and carat production down 61% to 3,990 carats.

Rockwell’s mid-term target is to process 500,000 cubic metres a month in total.

Shore Gold (TSX: SGF) In November, Shore Gold updated resources at its Star-Orion project in Saskatchewan. Indicated resources at the Star kimberlite jumped by 38% to 28.2 million carats, while the grade rose by 11% to 15 carats per hundred tones (cpht). At Orion South, indicated resources climbed by 134% to 27.1 million carats at 14 cpht. The estimate at Star was also recalculated with the same methodology as Orion South.

The estimate incorporated results from a 12-hole largediameter drill program completed on Orion South in 2015.

A valuation of Star-Orion South diamonds was completed in October in order to update resources. Using June 2015 prices, the value of diamond parcels from the various units of Star and Orion South increased between 31% and 125% in U.S. dollar terms compared with the last valuation conducted in March 2008.

With the decline in the Canadian dollar, the increase in model prices would be higher measured in Canadian dollars. Model prices for the kimberlite units range from US$161-333 per carat.

Talmora Diamond (CSE: TAI) At presstime, Talmora Diamond had announced a $60,000 financing to cover administrative costs. The financing, a partbrokered private placement of up to 3 million shares at 2¢ per share, was to close by the end of April.

The junior is waiting for better markets to raise money for a major drill program on its claims in the Lena West diamond region of the Northwest Territories.

Tango Mining (TSXV: TGV) Tango Mining has agreed to sell its 51% interest in the Oena mine for $3 million. South Africa-based Bothma Diamante will buy the alluvial diamond project, located in the Northern Cape, in a two-stage transaction.

Oena is in the middle of a bulk-sample program, which Bothma will continue in stage one. Tango will receive at least 15% of the proceeds of all diamond sales for 12 months, or until the sale is approved by South Africa, whichever is the longer term.

Tango is focused on acquiring the past-producing BK11 diamond project in Botswana from Firestone Diamonds. The purchase will cost US$8.8 million in total.

In March, Tango lined up a proposed US$30-million, fiveyear-term loan with Vanderbilt Commercial Lending. Tango has secured an extension on the acquisition from Firestone to July 29 in order to finalize the loan.

True North Gems (TSXV: TGX) Construction at True North Gems’ Aappaluttoq ruby and pink sapphire mine, in Greenland, is well under way.

In April, the company reported that all major heavy processing equipment was already in place at the processing plant as construction progresses. Stripping operations at the pit area have been under way since early December.

Aappaluttoq is a joint venture with LNS Greenland, which will own 27% of the open-pit mine once it reaches production.

In August 2015, Greenland Ventures bought a 7% stake in the operation.

In January, True North entered into an offtake agreement with Chinastone, a gemstone polisher and gem supplier. Under the deal, True North must supply Chinastone with US$7 million in rough gemstones per year for the next three years.

The project has an initial mine life of nine years.

In April, True North engaged Endeavour Financial to help it find additional financing to boost its working capital.

Tsodillo Resources (TSXV: TSD) Tsodilo Resources needs to raise about $4 million to conduct a bulk sample at its BK16 kimberlite, in Botswana. The junior owns a 75% interest in Bosoto Ltd., which holds the BK16 claims. BK16 was discovered by De Beers in 1969. While a previous sample returned low grades, it was taken from a diluted basalt breccia zone, and Tsodilo expects grades to be much higher in “clean kimberlite.”

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The world’s leading “mining-101” reference has been fully translated into Spanish.

Educate, Inform and Empower key individuals or communities essential to your success in Spanish-speaking regions.

ORDER YOUR COPY TODAY Mining Explained (English Version) Send me _____ copies at $29 $ _______ v Minería Explicada (Spanish Version) Send me _____ copies at $29 $ _______

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Canada $4 $ _______ USA $7 $ _______ Foreign $14 $ _______

CDN Residents add 5% GST (excl. NB, NL, NS, ON, PEI) BC orders add 7% PST ON, NB, NL orders add 13% HST NS orders add 15% HST PEI orders add 14% HST TOTAL DUE

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Mail this form to The Northern Miner 38 Lesmill Rd., Unit 2, North York, ON M3B 2T5

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Or call 1-888-502-3456 Or order online at northernminer.com

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QUALITY STANDARDS SINCE 1973

As one of the largest commercial diamond recovery laboratories in the world, SRC offers secure, high quality processing services for every stage of your diamond project.

We Offer:

- KIMBERLITE INDICATOR MINERALS RECOVERY - MICRO AND MACRO DIAMOND RECOVERY - DIAMOND DESCRIPTION, WEIGHING & PHOTOGRAPHY - DIAMOND BREAKAGE STUDIES - DIAMOND TYPING BY FTIR

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