Tahera Diamond Corporation is a unique Canadian diamond Company focused on developing its wholly-owned Jericho Diamond Project as Canada's next, and Nunavut's first diamond mine.
Development
Tahera achieved several very significant project development and financing milestones during 2004, culminating in project mobilization and commencement of construction of the Jericho Diamond Mine in February 2005. Detailed engineering is now 90% complete and all major equipment and materials have been purchased and scheduled for delivery to the site.
Winter road access to the site was completed in mid-February following receipt of the land lease on February 11, and mobilization and construction activities commenced immediately thereafter. Over 200 truckloads of supplies and equipment have been delivered to the mine site. It is anticipated that over 500 truckloads will be required to complete mobilization. Extensive site preparation activities are currently underway. The fuel storage farm is scheduled for completion by the end of March, and the accommodation facilities are expected to be ready for occupancy by the end of April. The current development schedule calls for substantial completion of mine construction by the end of the year, and attainment of commercial diamond production in early 2006.
As a result of the terms contained in the water license and land leases, Tahera is required to make arrangements to satisfy environmental reclamation bond obligations on an earlier schedule than in the previous budget. In addition, the Company is required to own the truck shop and accommodation facilities which were originally planned to be leased, with the lease payments included in the budgeted operating costs. Tahera has several options with which to deal with these financial timing differences. Tahera has increased current estimates for plant construction by approximately $5 million to include additional scope, labour, material and equipment costs based on the detailed engineering and procurement activities completed to date.
Tahera’s diamond purchase, marketing, and finance agreement with Tiffany & Co., one of the world’s leading jewelers, provides the Company with both a world-class partner to assist with project financing and an attractive arrangement for the sale of its Jericho production. As part of the agreement, Tiffany has provided a $35 million credit facility to Tahera to assist with project construction costs.
Exploration
During the Jericho Diamond Mine development phase, Tahera will continue to be an active diamond explorer over its prospective landholdings. The Company’s primary exploration focus is to increase its diamond reserves in the Jericho area, thereby extending the mine life of the Jericho Diamond Mine.
Tahera’s exploration budget for 2005 is approximately $6 million. The spring exploration program will run from March through to May, and the summer program will commence in July and run through to September.
During March and April, Tahera will conduct further evaluation of the Muskox kimberlite, located on the De Beers joint venture property (Polar Project) approximately 14 kilometres southwest of the Jericho kimberlite. Based on sampling campaigns completed to date, the kimberlite is significantly diamondiferous and has considerable tonnage potential. A large portion of the kimberlite has not been tested by drilling. Approximately 6 tonnes of kimberlite drill core will be extracted during the spring exploration program. An updated geologic model will be created to examine the diamond grade and tonnage potential of the kimberlite, and based on these results, a much larger bulk sample may be extracted to assess the diamond valuation potential of the kimberlite.
During April and May, Tahera will conduct an exploration program on the Rockinghorse property (Anuri kimberlite), located approximately 90 kilometres northwest of the Jericho mine site. The Anuri kimberlite is 75% owned by Tahera (25% Kennecott Canada Exploration Inc.). The surrounding exploration property is wholly-owned by Tahera. The Anuri evaluation program will include the collection of approximately 6 tonnes of drill core, with approximately one half of the sample scheduled for processing by caustic dissolution. The results of this program will provide the necessary data to update the geologic model, and determine a more accurate diamond distribution model. Based on the results of this program, a decision regarding a much larger bulk sample to determine diamond valuation potential will be made.
The spring program will also include geophysical surveys and drilling of prospective kimberlite targets near the head of unresolved kimberlite indictor mineral trains on the Polar Project, the Rockinghorse property, the Jericho Claims, and on the Tenacity South property (Tahera / Strongbow joint venture). Regional exploration is planned to occur during the spring and summer programs as part of Tahera’s new projects initiative.
Mr. Eugene Flood, P. Geol., is Tahera’s qualified person as defined in National Instrument 43-101 for its exploration programs.
2004 Year-End Results
At December 31, 2004, Tahera Diamond Corporation’s cash balance was $57,889,000. Tahera recorded a loss of $2,542,000 ($0.01 per share) for the year ended December 31, 2004, which compares with a loss of $20,612,000 for the year ended December 31, 2003 ($0.06 per share). Operating expenses increased moderately to $2,889,000 for the year ended December 31, 2004 compared to $2,403,000 for the year ended December 31, 2003. The net loss for 2003 included a write down of exploration and development projects of $18,449,000, whereas no similar write down was recorded in 2004. Expenditures incurred on exploration and development projects increased in 2004 to $5,517,000 compared to $3,454,000 in 2003. In addition, $6,483,000 was incurred on capital assets associated with the construction of the Jericho Diamond Mine.
Financial Statement Highlights (in thousands of Canadian dollars, except for per share data):
Please refer to Tahera’s website (www.tahera.com) to view the complete audited financial report for the twelve months ended December 31, 2004.
On Behalf of the Board,
R. Peter Gillin
Chairman and CEO
Tahera Diamond Corporation
Grant Ewing – Executive Vice President
For further information:
Investor Relations
Tel: (416) 777-1998
Fax: (416) 777-1898
Toll free: (877) 777-2004
Email: investor_relations@tahera.com
|