Jericho owner strikes deal with Belgian diamond firm
"An exciting new strategic alliance"
The owner of what was once Nunavut’s first and only diamond mine, Shear Diamonds Ltd., on Dec. 8 struck a deal with a Belgian diamond dealer that will give Shear the cash it needs to recover and sell diamonds from the mothballed site’s existing stockpiles.
The Belgian diamond firm Taché has agreed to purchase rough and polished diamonds from the Jericho project and to provide Shear with a loan of $2 million, repayable over 12 months, after Shear begins recieving the proceeds of diamond sales.
And after Shear starts shipping diamonds, Taché will give them a $3 million line of credit.
“The debt provides us with the capital required to begin processing our recovery stockpiles in the near term, as well as long term support in the form of a marketing agreement that has Shear participating in profits on the sales of both the rough and, more importantly, the polished stones,” Julie Lassonde, the Shear’s CEO, said in a news release.
Headquartered in Antwerp, the family-owned Taché firm polishes, manufactures and markets diamonds through a global network of partner companies.
“This agreement provides an exciting new strategic alliance for Taché whilst respecting our need to partner with a group that share our vision and our values,” Jacky Taché, the CEO of Taché, said in a news release.
Shear bought the mothballed Jericho property from the insolvent remains of the Tahera Diamond Corp. in August 2010.
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.
From 2006 to 2008, the mine, 420 kilometres northeast of Yellowknife, produced 780,000 carats of diamonds from 1.2 million tonnes of kimberlite mined from its open pit operation.
Tahera opened the mine in 2006, at a ceremony that included Prime Minister Stephen Harper and Jim Prentice, then the minister of northern affairs.
But after numerous setbacks, including fuel supply shortages caused by the early melting of a winter road and problems with a diamond processing plant, Tahera entered bankruptcy protection in 2008.
After acquiring the site in the ensuing sale of assets, Shear announced a plan to extract diamonds from stockpiles of ore that Tahera left behind.
Shear believes the site holds good diamond potential and hopes to one day bring the mine back into production.
This past February, Shear announced a mutual cooperation agreement with the Nunavut Resource Corp..