De Beers to Supply 10% of Snap Lake Production to Local Sightholders

In a joint statement with the Government of the Northwest Territories (GNWT), De Beers Canada confirmed its intention to supply 10 percent of Snap Lake’s production by value to local manufacturers. The manufacturers will be approved by GNWT and will need to pass the Diamond Trading Company's (DTC's) client selection criteria.

The local supply, a growing requirement from De Beers wherever it mines, will fulfill its political and contractual obligations to comply with the GNWT policy regarding support for the secondary diamond industry in the Northwest Territories.

De Beers will make the goods available for sale starting in 2008. The goods will not be 10 percent run of mine, but rather in economically cuttable categories.

All of Snap Lake’s production will be sorted in Yellowknife for royalty valuation purposes in accordance with the requirements of the Canada Mining Regulations, before being sent to London for sale to Sightholders. This is similar to the arrangement the DTC has with Botswana.

“In order to ensure the identity of the Snap Lake production, the GNWT will have the right to monitor the valuation process in Yellowknife and the process for selling ten percent of Snap Lake Diamonds,” announced a press release yesterday. The arrangements also include a commitment by De Beers to provide diamond sorting training for NWT residents.

“I am confident that GNWT approved manufacturers, who qualify as DTC clients, will have equitable access to Snap Lake rough diamonds and that we will be able to certify these diamonds as mined, cut, and polished in the NWT,” said Brendan Bell, minister of Industry, Tourism, and Investment.

Next month, GNWT approved manufacturers will attend a presentation in Toronto on the DTC client application process, a first step in applying for a Sight. The next contract period is for three years, starting in 2008.