Shear Diamonds reports “good or better” recovery of diamonds than expected

The Jericho mine in western Nunavut is starting to produce diamonds again from stockpiles of rock left at the mine site, shown here. (FILE PHOTO)

Shear Diamonds Ltd. reports it’s successfully started 24-hour operations since June 15 at its Jericho mine, which Shear bought from insolvent remains of the Tahera Diamond Corp. in August 2010.

And since starting round-the-clock operations, Shear’s average production rate has been in excess of 80 tonnes per day.

More importantly, the average recovery since May 17 has been 10.9 carats of diamonds per tonne of rock processed — an amount that meets the goals the company set back in May.

“Recoveries since commencing 24 hour operations have been as good or better than from the prior production period” when Tahera ran the mine, said a June 21 news release.

To help Shear with its “cash flow challenges,” Taché Company NV, Shear’s diamond marketing partner, has agreed to advance Shear an additional $550,000 over the course of the next few weeks, the release said.

These advances are pre-payments for future production to be sold through Taché, and are conditional on Shear continuing its processing on an acceptable basis, the release said.

Shear’s next parcel of diamonds is due to be delivered to Taché in early July.

The Jericho mine, which last operated from 2006 to 2008, was Nunavut’s first diamond mine, located 420 kilometres northeast of Yellowknife.

From 2006 to 2008, the mine produced 780,000 carats of diamonds from 1.2 million tonnes of kimberlite mined from its open pit operation.

When Shear bought Jericho, it acquired a recovery plant, maintenance facility, fuel farm, offices, accommodation for 225 staff, an open pit and an estimated three million carats of diamonds underground.

After acquiring the site, Shear announced a plan to extract diamonds from stockpiles of ore that Tahera left behind.

Then, last December, Shear struck a deal with the Belgian diamond dealer, Taché, to give Shear the cash it needs to recover and sell diamonds from the mothballed site’s existing stockpiles.