Ekati owner wants to expand with Lynx pipe

Dominion Diamonds is preparing to expand its operations at the Ekati Diamond Mine.

The company has applied for a land use permit and water license to mine what it calls the 'Lynx pipe.'

The Lynx kimberlite deposit is about 30 km from the existing main facility at the mine. Developing the deposit will require draining a small lake, building the open pit mine and an access road.

The pipe isn't huge but it'sexpected to produce high quality diamonds and with the current price of diamonds being what it is, could be very profitable for the company.

"The Lynx pipe is a relatively small one with 1.3 million tonnes of kimberlite material and the grade is relatively small at .8 carat per tonne," says Pierre Leblanc, president of Canadian Diamond Consultants. "But the value of the diamonds is good which means right now the value of that pipe, excluding the potential upside as the lynx pipe is mined would be $267 million not an insignificant value in the ground."

This is the second time in just a few weeks Dominion Diamonds has announced it plans to mine a new kimberlite pipe at Ekati. Earlier this month, the company said it hopes to start mining a deposit called the Jay Pipe.

It's a significantly bigger deposit than the Lynx project. It's expected mining the Jay pipe could extend the life of the mine by more than a decade.