A pre-feasibility study on Jay kimberlite pipe deposit at Dominion Diamond’s Ekati diamond mine in Canada has showed that the deposit can be developed as a stand-alone open pit operation.

Located within the buffer zone of the Ekati mine, the Jay is an undeveloped deposit which is expected to supply 4.3 million tons of ore a year to the existing process plant for around 11 years. It would extend the Ekati mine operation beyond 2020 when it was projected to close.

The company prepared the study report in partnership with consultants Golder Associates and Burgundy Mining Advisors.

Dominion Diamond acting CEO Brendan Bell said: "Completing this pre-feasibility study is an important milestone for Jay, a project that we hope will be a significant growth opportunity for the company and a long-term pillar of the Northwest Territories economy."

The proposed project will require a water retention dike encircling the pipe, while allowing dewatering the isolated area prior to commencing pre-stripping and mining operations.

Construction of the dike and its associated infrastructure is estimated to cost $368m.

Pre-stripping cost for the first phase of mining is estimated to be $33m.

Required reclamation activities at the Ekati mine will be delayed until Jay project is completed, the company said.

The company reported an updated mineral resource estimate and mineral reserves for Jay. The deposit is estimated to host proven and probable reserves of 84.6 million carats with indicated resources of 90.6 million tons and inferred resources of 8.6 million tons.