January 26, 2005 Nancy Karetak-Lindell, Member of Parliament for Nunavut, on behalf of the Honourable Ethel Blondin-Andrew, Minister of State (Northern Development), announced today that the water licence has been signed for Benachee Resources Inc., a wholly owned subsidiary of Tahera Diamond Corporation. The licence allows the company to begin construction of the Jericho Diamond Mine, Nunavut's first diamond mine. The issuance of the water licence is one of the remaining federal regulatory requirements before construction can begin. Ms. Karetak-Lindell commends the Nunavut Water Board on the effort put forth in the water licence and acknowledges the diligent work done by the Board on preparing this historical licence. She also indicated that Indian and Northern Affairs Canada will continue to work with the company to finalize land leases required for the use of Crown land on the project. Jericho Diamond Mine: Project Summary Operator: Benachee Resources Inc., Tahera Diamond Corporation Location: 350 km southwest of Cambridge Bay in the west Kitikmeot region, Nunavut Jericho is a kimberlite deposit located at the north end of Contwoyto Lake, 25 km north of the Lupin gold mine site, in the Slave Geological Province. The deposit is located on Crown land although parts of the proposed project will be on land with Inuit-owned surface rights. The federal regulatory instruments will be in the name of Benachee Resources Inc., a wholly owned subsidiary of Tahera Diamond Corporation. The "Part 5" environmental review of the Jericho project was completed in July 2004 with the issuance of the Nunavut Impact Review Board's Project Certificate. An Inuit Impact and Benefits Agreement was signed between the Kitikmeot Inuit Association and the Tahera Diamond Corporation on September 8, 2004. Benachee Resources Inc.'s application for a water licence was then reviewed by the Nunavut Water Board under the Nunavut Waters and Nunavut Surface Rights Tribunal Act. Hearings were held in the Kitikmeot region in early December 2004. On December 22, 2004, the Nunavut Water Board issued a Type "A" water licence for the Jericho Diamond Project. Type "A" water licences requires the Minister of Indian Affairs and Northern Development's approval in order to come into effect. The Minister has 45 days to render his decision as of the day the Nunavut Water Board submitted the licence or he can ask for a 45 day extension to complete his review. On January 25, 2005, the Minister approved and signed the water licence. Indian and Northern Affairs Canada is currently negotiating land lease documents with Benachee Resources Inc. The water licence and land lease are key federal regulatory approvals required before the company can use Crown land and water resources. Development Plans Tahera Diamond Corporation plans a 900 tonne per day, fly-in, fly-out operation. According to the final environmental impact statement, construction is scheduled to begin in 2005 with materials being transported up the Lupin winter road this winter. The mine would begin commercial operation in 2006, and is expected to have an eight year mine life. Mine infrastructure would include tailings disposal in a lake south of the mine site. The mine site and pit would be located just south of Carat Lake. Northeast of Carat Lake is an airstrip capable of servicing the minesite. The first four years of production would be from a land-based open pit, followed by about two years of underground mining. A stockpile of ore would be generated during this time so that processing would continue for two years after the end of mining operations. The project would produce an average of 375,000 carats per year, for a total of 2.6 million carats. Mine life may be extended by the discovery of new resources nearby. Economic Costs and Benefits, Including Employment The proponent estimates capital costs at approximately C$45 million. The proponent also estimates that up to 60 jobs would be created during construction. Employment during mining would peak at 116 during open-pit mining, decreasing to 48 during underground mining and to 40 while processing stockpiled ore. Benefits to the Crown would include corporate and income taxes and royalties, probably in the range of a few tens of millions dollars. The Inuit Impact and Benefits Agreement will be implemented prior to the start of mining operations. Cambridge Bay, Kugluktuk and Gjoa Haven as well as the Northwest Territories are best situated to provide services and employees to the project. - 30 - For further information: Maria O'Hearn Indian and Northern Affairs Canada - Nunavut Tel.: (867) 979-7954 E-mail: ohearnm@inac.gc.ca
