Karelian's PEA Recommends Building Europe’s First Diamond Mine Outside Russia

Mining and Exploration
01/08/2017 16:25

Karelian Diamond Resources, the Ireland-based, AIM-listed diamond exploration company focused on Finland has received a Preliminary Economic Assessment (PEA) on its Lahtojoki diamondiferous kimberlite pipe in the Kuopio-Kaavi district in south eastern Finland, which recommends an open pit mining operation. It estimates a total of 2.11M carats recoverable with a gross value of US$211M over a nine year life of mine, with payback for the Lahtojoki mine - estimated to cost about $22 million to build, after two years. It would be the first ever European diamond mine outside of Russia. 

The PEA, conducted by Michael Brennan of Brennan Mining Services Limited, states that analysis of combined microdiamond and mini-bulk sample data suggests a +1mm recoverable grade of 39.7 Carats Per Hundred Tonnes (cpht) and indicates the presence of high quality stones within the diamonds that have been recovered to date. Drilling indicates 5.6 million tons are present to a depth of 160 metres below surface. For the purposes of the PEA US$100/carat has been used in the economic evaluation and mine design. 

A total resource (Non JORC) estimate is of 2,225,000 carats and a contained value of US$222.5 million. Pursuant to the PEA, it is appropriate to classify the resource into the inferred category based on the current available grade and diamond value data. Currently it is not possible to attribute reserves to Lahtojoki. Based on resource available and an appropriate technical and economic assessment it is possible to consider those resources that are likely to become mineable and economically viable subject to further exploration and feasibility work being undertaken.

Richard Conroy, Chairman, Karelian Diamond Resources commented: “I am delighted that a mining operation has been recommended. Clearly much work remains to be done but this report is a major and very encouraging step forward in our assessment of the Lahtojoki Diamond project and of its potential for development as a mine.”