Underneath the Fort à la Corne forest in Saskatchewan, about 60 kilometres east of Prince Albert, lies what may be the world’s largest undeveloped diamond mine.
A Saskatoon natural resource company hopes to unearth these precious stones – and the economic benefits they’ll bring to the province and country.
“We’re talking about millions of diamonds of unsurpassed clarity – rare, high-value diamonds that can be produced right here in Canada,” says Ewan Mason, interim CEO and chair of Star Diamond Corporation (TSX: DIAM), which is working to advance mining in the central Saskatchewan forest.
The stones are contained in a field of more than 60 kimberlites – the most common host rocks for diamonds – in the southeastern part of Fort à la Corne, where Star Diamond holds a 25 per cent participating interest in two extensively evaluated kimberlites, Star and Orion South.
The remaining 75 per cent – which Star Diamond aims to acquire, according to Mr. Mason – is currently held by Montreal-based Rio Tinto Exploration Canada Inc.
Between 2003 and 2009, underground bulk samples taken from Star and Orion South yielded 13,300 carats, including a 49.5-carat stone, from about 98,000 tonnes of kimberlite ore. An unusually high proportion of the yield was made up of Type IIa diamonds – rare stones, which can be very large and of the highest quality, that account for less than 1.3 per cent of global production.
A 2018 preliminary economic assessment authored by an independent international consulting firm concluded that, over a 38-year project lifecycle, the Star and Orion South sites could yield about 470 million tonnes of ore containing 66 million carats, at a weighted average grade of 14 carats per hundred tonnes.
The assessment also set the average weighted price per carat at $210 (U.S.) for diamonds from Star, and $169 (U.S.) from Orion South – more than double the world average at the time.
“Just imagine the economic benefits to Canada, in particular to Saskatchewan,” says Mr. Mason. “Preliminary studies show cash flow from this project into Saskatchewan will be at least $25-billion over 38 years.”
Beyond their abundance of high-value diamonds and mining longevity, the Star and Orion South projects – which are expected to incur just over $1.4-billion in construction costs – feature a number of other advantages. The sites are close to existing power and transportation infrastructure, and all federal and provincial environmental permits are in place, says Mr. Mason.
The preliminary economic assessment from 2018 points to a 19 per cent internal rate of return based on a net present value, after taxes and royalties, of $2-billion.
Advertising feature produced by Randall Anthony Communications with the Prospectors & Developers Association of Canada. The Globe’s editorial department was not involved.