Tahera Diamond Corporation: Second Quarter Report
TORONTO, July 25 /CNW/ -
Highlights of the second quarter:
- Jericho diamond mine construction on target for substantial completion
by year-end
- Additional senior staff appointed
- Additional equity financings completed to fund Jericho diamond mine
construction and remaining 2005 exploration program
- Spring exploration program completed
Development
Tahera Diamond Corporation continued to make excellent progress on the
construction of its Jericho diamond mine during the second quarter. The
current development schedule projects substantial completion of mine
construction by the end of the year, with commercial diamond production
targeted at the end of the first quarter of 2006.
The 200-man camp was completed and occupied on schedule in early May.
Construction of the fuel tank farm is nearing completion, which will result in
fuel storage capacity of over 10 million litres of fuel. Site earth works and
the pouring of concrete foundations are ongoing, and steel erection for the
process plant has commenced. The project continues to have an excellent safety
record, with approximately 200,000 man-hours worked without a lost time
accident.
Personnel
Tahera Diamond Corporation appointed the senior management team for the
Jericho diamond mine in April. Roland Jones (Mine Manager) and Harold Gates
(Operations Manager) were joined by Allan Reeves (Director of Mine Planning)
to bring extensive northern and diamond mining experience to the Company.
Tahera has also appointed a very experienced senior level Director of Security
to oversee the implementation of the Company's security program.
Exploration
Tahera's spring exploration program focused on further assessment of the
economic potential of both the Muskox and Anuri kimberlites. Previous drilling
on these kimberlites indicates that they both have considerable tonnage and
diamond grade potential.
The Muskox kimberlite deposit (Polar Project, De Beers Joint Venture),
located just 14 kilometres west of the Jericho mine site, is a large
diamondiferous kimberlite (surface area of approximately 4 hectares) that
contains at least two distinct geologic phases. Tahera can earn a 50% interest
in the Polar Project from partner De Beers Canada, by completing expenditures
of $11 million by 2008. Approximately $3 million has been spent to date.
During the spring program, four evaluation drill-holes totaling
915 metres of drilling were completed to test previously unsampled areas of
the Muskox kimberlite deposit. Two other previously unsampled Muskox drill
holes, collected by De Beers in 2003, were logged and sampled. In total,
approximately 3,800 kilograms of kimberlite from the 6 drill-holes will be
processed by caustic fusion at the Saskatchewan Research Council (SRC) diamond
laboratory, with the final sample results available during the third quarter.
Complete analysis of the new and existing drill core and diamond results
from the Muskox kimberlite deposit will be utilized to update the geologic
model of the kimberlite. This analysis will lead to a decision regarding a
large bulk sampling campaign to ascertain its diamond valuation potential.
The exploration program on the Rockinghorse property, located
90 kilometres northwest of the Jericho mine site, included evaluation drilling
of the Anuri kimberlite deposit (Tahera 75%, Kennecott 25%), ground geophysics
on several priority target areas, and exploration drilling in the area.
Five evaluation drill holes totaling 605 metres were completed on the
Anuri kimberlite deposit during the program, resulting in the collection of a
1,954 kilogram sample. The drilling program extended the western and northern
area of the deposit, and the current surface area is now estimated to measure
approximately 3.5 hectares. Of particular interest was the occurrence of an
octahedron-shaped colourless diamond measuring approximately 3 mm by 3 mm that
was logged in the drill core, as it is a rare occurrence for commercial size
diamonds to be visible in drill core.
Caustic fusion analysis of the two tonne sample from the Anuri kimberlite
deposit is underway at SRC's laboratory in Saskatoon, with final results
expected during the third quarter. A decision regarding a large diamond
valuation bulk sample will be made based on the results of this work.
Ground magnetic and gravity survey data collected during the spring
exploration program from the Polar Project and Rockinghorse property will be
utilized to determine and prioritize exploration targets for future programs.
The sources of several promising kimberlite indicator mineral trains on the
properties remain unsolved.
Tahera's 2005 summer program will entail further exploration work on the
Company's properties, including kimberlite target investigation, quaternary
geology mapping, geophysics, till sampling and geochemical sampling. The
results of this work will assist in prioritizing kimberlite targets for drill
testing. New diamond exploration projects will also be investigated during the
program.
Tahera believes that it has excellent potential to discover additional
kimberlite deposits on its highly prospective exploration properties, and the
regional exploration efforts will continue to generate exciting new diamond
projects.
Mr. Eugene Flood, P. Geol., is Tahera's qualified person as defined in
National Instrument 43-101 for its exploration programs.
2005 Second Quarter Results
At June 30, 2005, Tahera's cash balance was $26,742,000, a decrease of
$31,147,000 from the balance at December 31, 2004. Capital and other
non-current assets increased by $64,021,000 during the six months ended
June 30, 2005, primarily due to capitalized costs associated with the
construction and development of the Jericho Diamond Project. The Company
recorded a net loss of $866,000 ($0.002 per share) for the quarter ended
June 30, 2005, as compared to a loss of $738,000 ($0.002 per share) for the
quarter ended June 30, 2004. Operating expenses increased to $1,016,000 for
the quarter ended June 30, 2005, compared to $771,000 for the second quarter
of 2004.
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Financial Statement Highlights
(in thousands of Canadian dollars, except for per share data):
As at As at
Jun. 30, 2005 Dec. 31, 2004
(unaudited)
Current Assets $ 33,122 $ 58,397
Capital and Other Assets 121,902 57,881
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$ 155,024 $ 116,278
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Current Liabilities $ 12,480 $ 3,499
Long-Term Liabilities 4,250 -
Share Capital - Common Shares 138,833 113,164
Common Share Purchase Warrants 1,347 418
Contributed Surplus 2,472 1,739
Deficit (4,358) (2,542)
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$ 155,024 $ 116,278
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Six Months Ended Six Months Ended
Jun. 30, 2005 Jun. 30, 2004
(unaudited) (unaudited)
Operating Expenses $ (1,981) $ (1,403)
Other Items 222 156
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Loss for the Period before Income Taxes (1,759) (1,247)
Income Taxes - Current (57) (72)
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Net Loss for the Period $ (1,816) $ (1,319)
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Loss per Share - Basic and Diluted $ (0.003) $ (0.003)
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Cash Flows From (Used In):
Operating Activities $ (1,168) $ (1,171)
Investing Activities (55,908) (1,749)
Financing Activities 25,929 2,743
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Net Decrease in Cash (31,147) (177)
Cash - Beginning of Period 57,889 13,595
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Cash - End of Period $ 26,742 $ 13,418
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Please refer to Tahera's website (www.tahera.com) to view the complete
financial report.
On Behalf of the Board,
R. Peter Gillin Chairman and CEO
Tahera Diamond Corporation
Grant Ewing Executive Vice President
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