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Gahcho Kué Diamond Project

SRK was mandated to act as the Independent Engineer on behalf of the consortium of Lenders supporting a potential debt financing of the Gahcho Kué diamond project. Gahcho Kué is located in the Canadian North, approximately 300km northeast of Yellowknife.

The Gahcho Kué project is a joint venture between Mountain Province Diamonds and De Beers, who own 49% and 51% of the project, respectively. The debt facility was to help fund Mountain Province’s share of the estimated C$1,019M capital cost.

SRK assembled a multi-disciplinary team, sourced from various offices in Canada, as well as outside organisations. The initial desktop review and site visit were completed in September 2014, and SRK identified a number of risks associated with the project. A key risk for the project was logistical access to the site.

At the time of engagement construction had begun at the project site, but was still in the early stages (~5% complete). All major construction materials and fuel were to be transported to the site over an ice road from Yellowknife, which is only operational for roughly two months of the year, typically February and March.

The life of each winter road season and maximum load weight depend on ice thickness, which is directly correlated with cold temperatures. As a result, a poor ice road season could have a significant negative impact on the procurement, cost, and schedule of the construction project. The additional review was completed and updated findings were delivered to the Lenders in March 2015.

Following interaction with SRK and the successful ice road season, the Lending group and Mountain Province agreed to and signed the US$370M facility, closing the deal on 2 April 2015. SRK continues to act on behalf of the Lenders by conducting ongoing construction monitoring and will ultimately conduct completion testing at the end of construction.

SRK is pleased to be involved in what will become one of Canada’s next generation of diamond mines.

Chris Elliott:
Jarek Jakubec:
Stuart Smith:

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