Unlocking Ontarios Diamond Potential

1
Unlocking Ontarios Diamond Potential
Ontario Mineral Industry Cluster Council November
17, 2006 Presented by Jim Gowans President and
CEO
2
2005 world rough diamond production - estimated
Total US12.9 billion
All figures US billions
3
Current annual Canadian rough diamond production
in millions of carats
Total 12.1 million carats
Source Published carat production estimates
4
Forecast annual Canadian rough diamond production
by 2008
in millions of carats
Total 14.1 million carats

• Snap Lake and Victor
• Will increase Canadian production by 16.5
• Will increase Canadian production value by 40

Source Published carat production estimates
5
Archean cratonic regions in Canada
SLAVE 233,000 km²
Southern Africa Kaapvaal 0.8 million km2
RAE/HEARNE 1,500,000 km²
SUPERIOR 1,758,000 km²
6
Ground holdings in Ontario
322 individually staked De Beers parcels,
totaling 505km²
7
Victor Project, Ontario

• Value US420 per carat
• Production rate 600,000 carats per year
• Operating cost CDN41 per tonne
• Capital cost CDN1 billion

Diamond prices are subject to market related
fluctuations
8
Victor Project progress

• Official ground breaking ceremony in July with
  Premier Dalton McGuinty in attendance
• Exploration of adjacent kimberlites continues
• Power substation is complete and is now on grid
  power
• General construction ahead of schedule
• Airstrip extension completed
• Water treatment plant installation
• Site roads to pit area completed
• Signed IBA with Attawapiskat First Nation
• Negotiations ongoing with other communities on
  the James Bay Coast

9
Substation layout
Switchyard
Reactors
Substation
SVC Transformers
Harmonic Filters
Generators
10
IBA Commitments

• Employment
• Training and development
• Committed another 1 million to work with
  Attawapiskat First Nation for another training
  facility
• Job opportunities
• Environmental
• Cultural

11
Economic contributions

• Committed over 750 million in contracts in
  northern Ontario
• Committed over 103 million to First Nation joint
  ventures
• 375 full time positions during operations, from
  skilled labour to management level
• Increase of 1,500 jobs in north-eastern Ontario
• Increase of 3,200 jobs in Ontario
• It is estimated that De Beers will contribute
• 4.2 billion cumulative GDP impact for
  northeastern Ontario
• 6.7 billion cumulative GDP impact for all of
  Ontario during the life of the Victor diamond mine

Victor Project awarded a three-year air
transportation contract to CreeWest
Source Centre for Spatial Economics, January 2004
12
Community contributions

• Extended the Books in Homes program to northern
  Ontario, distributing almost 5,800 new books to
  over 1,600 children
• Investing 100,000 per year for five years in the
  Lieutenant Governor of Ontarios Literacy Summer
  Camps for five First Nation communities in
  northern Ontario

Victor Projects Books in Homes Program
13
Training and development contributions

• Significant contribution to education and
  training
• Invested 800,000 to build the Marc Guevremont
  Training Centre in Attawapiskat
• Investing 1.7 million in the James Bay
  Employment and Training Partnership with Federal
  and Provincial Governments
• Provided 50,000 to the Attawapiskat First Nation
  as part of an education bridging pilot program to
  upgrade math, science and literacy programs at
  the high school level

14
What is needed to maximize Ontarios potential?
2001
We need streamlined and harmonized regulatory
processes between federal and provincial
governments
MoU reached with Attawapiskat First Nation
June Environmental baseline studies
1999
Desktop Study
Advised scope would be issued in 6 weeks
Attawapiskat First Nation requests hold to EA
process
May Environmental Prospectus issued
2002
Pre-feasibility study
August 15 months after Prospectus NRCan chosen
as lead agency
December 19 months after Prospectus
January Attawapiskat First Nation agrees on EA
path forward
Draft EA guidelines from Federal Government
Feasibility study issued
April Presentations to regulators
June Draft of Federal EA issued
2003
21 months after Prospectus
March Comprehensive Study Level EA Report issued
Community concerns regarding access and power
supply addressed
February EA guidelines from Federal Government
August Re-evaluation of power supply complete
February EA scope finalized
2004
August Provincial transmission line EA process
complete
October Provincial land use EA process complete
June Comprehensive Study Report issued
August Federal EA process complete
2005
Over 3 years after Prospectus
15
What is needed to maximize Ontarios potential?

• Resolution to Aboriginal issues
• Aboriginal land claims
• Revenue sharing
• Land access for exploration
• Human resources capacity
• Training and development support for local and
  Aboriginal employees
• James Bay Employment and Training (JBET) Board
• Marc Guevremont Training Centre in Attawapiskat
• Facilitation of immigration processes for foreign
  skilled labour
• Improved industry collaboration in developing and
  implementing solutions to all of the above

16
Outstanding issues

• Finalizing the process for diamond sorting and
  valuation
• Winter road security, ensuring access for the
  season
• Ongoing IBA negotiations with communities along
  the James Bay Coast

17
World-leading diamond buying culture
Canada indexes 6th in the world, with only 0.5
of the world population, and 2 of the worlds
diamond value.
Source DTC commissioned research, 2005
18
Ontario captures half the market share
Source DTC Commissioned Research 2006
19
Canadians love diamonds!
favoured gift if money were no object
Source DTC Commissioned Research 2006