By Nigel Maxwell

Fate of proposed diamond mine still optimistic

Jun 16, 2011 | 4:48 PM

Construction on Saskatchewan's first diamond mine could begin next year.

The project going forward still hinges on final government approval, but the project east of Prince Albert may be too good to refuse.

Shore Gold is now hearing that production levels will be higher than original forecasts.

“World demand is increasing steadily with increasing consumption in China and India., and that means there is going to have to be more supply in the future and it is one of the positive factors for diamond mining development in Saskatchewan,” said Eric Cline, Shore Gold vice-president of corporate affairs.

As a result of the increased demand, the value of the diamonds at the Star-Orion South project has also gone up.

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“The price has gone up quite a bit over the last few years. For our particular diamond sample, prices have increased between 28 and 130 per cent,” said Cline.

Shore Gold expects to complete the final feasibility study in the second quarter of this year. A production decision will follow.

Meanwhile, Shore Gold is considering changing its name.

“Nothing definite, but we think as we move forward it would make sense to have diamonds in our name rather than gold, which used to be the focus of the company,” said Cline.

nmaxwell@panow.com