| Putting kimberlite from the Tango Extension pipe though the mine's plant could add several years of life to Victor. Unfortunately, De Beers has been unable to get any agreement from the Attawapiskat first nation community to support the project, something that the company has said was a condition for proceeding with the development. Tom Ormsby, head of external and corporate affairs for De Beers, says his company is "sort of parking Tango as a project for now," adding that De Beers has several million tonnes of low-grade kimberlite at Victor that has been stockpiled. (It does, but it was stockpiled for a reason: what De Beers now calls low-grade ore was effectively deemed to be high-grade waste.) De Beers has yet to commit to processing the stockpile, as it has yet to do the work needed to determine if it would be profitable to do so. Mr. Ormsby says that if De Beers does determine the grade and diamond value to be sufficient, if it can get its costs down and if it can get ready to process the material before Victor is mined out, the stockpiles could "add years of processing and activity" to the mine. (The activity is as important as the profits, as it would delay the start of the costly remediation work at Victor, and it could also allow more time for De Beers to come to an accommodation with the locals.) Even so, getting a deal with Attawapiskat will be a challenge, as the current chief, Ignace Gill, appears opposed to the project no matter what De Beers proposes. Mr. Gill, with a promotional spin that would do Howe Street proud, manages to put a negative twist on De Beers's statement that it will not proceed with Tango Extension without the community's approval. He criticized that decision, describing it as an ultimatum being imposed on Attawapiskat by De Beers. Meanwhile, Metalex insists it continues to talk with the locals from Attawapiskat and Marten Lake in the hope of getting an agreement, or at least some sort of accommodation that would allow it to proceed with its bulk sample. Unfortunately, that may be the least of Metalex's worries. Unless the company can replace the $51-million deal that it had with Dundee Corp. (DC.A: $5.07), the big bulk sample is unlikely to take place. Dundee pledged that sum in staged investments to earn a 51-per-cent interest in the U2 project in 2012, but it backed out a few years later, ostensibly because it grew tired of waiting for the permits that were hung up by the lack of agreement with the Indians. (Dundee was facing a cash crunch of its own; perhaps a more pressing consideration.) In any case, finding a new partner is proving difficult as the grade at U2 is low, perhaps just 0.1 carat per tonne, and it will need plenty of large and exceptional diamonds to make it worthwhile. |