Name and Location
Aappaluttoq ruby and pink sapphire project, Greenland.

Client
True North Gems and Leonhard Nilsen & Sonner Greenland (LNSG).

Project Description
The prefeasibility study (PFS) on Aappaluttoq envisages the development of a mine and process facility at Aappaluttoq, along with associated infrastructure and the construction of a corporate office and ruby sorting house in the Greenland capital of Nuuk.

Pit optimisation, design and production scheduling indicate a high stripping ratio operation, which benefits from low mining costs, short haul distances for ore and waste, a low rainfall environment, favourable ground conditions and an available local workforce that all combine to ensure favourable economics over the expected nine-year mine life.

The mining operation will be a typical openpit operation.

Mining will use conventional blast, load and haul equipment, mining up to 450 000 t of total material over an eight-month operating season – from the beginning of April to the end of November – each year.

Ore production will increase gradually from an estimated 1 000 t in the first year – to satisfy plant commissioning and initial operation – to nearly 25 000 t in later years. Increased production will be achieved by extending the work season from four months in the early years to eight months in later years and by adding further mineral processing jigs. Process facilities will include a crushing, screening and jigging circuit to separate and extract the corundum from the host rock.

The facility will also have several hand-picking stations, enabling operators to extract visibly superior gems. Surveillance and security systems will be put in place to eliminate theft.

The dirty rough concentrate produced will contain gem, near-gem and nongem corundum.

Infrastructure will include a camp to accommodate workers, about 3 km from the mine, power generation facilities, communication facilities, explosives storage, roads, fuel storage facilities, a helipad and a port close to the camp.

A second port will be developed close to the narrow entrance to the fjord to allow for the temporary offload and storage of goods should tides and weather conditions not favour direct shipment to the inner port.

The dirty rough concentrate will be trans ported in secure containers by helicopter and boat on an irregular schedule.

The concentrate will be transported to the Nuuk facility for initial checking and sorting, and will then be taken to a local laboratory where it will be treated with hydrofluoric acid to remove any host rock still attached to the corundum.

The resulting clean rough concentrate will be returned to the sorting house, where it will be graded according to size and quality before being shipped to either cutting and polishing facilities or to market as rough gems.

Net Present Value/Internal Rate of Return
The PFS estimates a positive pretax net present value (NPV) of $25.7-million at an 8% discount rate and an internal rate of return (IRR) of 19.1%. The after-tax NPV is estimated at $17.5-million at 8% discount and the IRR is 16.5%, with an after-tax payback period of five-and-a-half years.

Value
The project is estimated at $40.7-million.

Duration
Not stated.

Latest Developments
True North has instructed its joint venture (JV) partner, LNSG, to allow for equipment to be mobilised and to inaugurate construction at the Aappaluttoq project.

It is expected that construction will progress very quickly.

Key construction objectives include transporting and installing a prefabricated loading dock that will allow for equipment to be moved to site; moving rolling-stock required to start road construction; establishing living quarters and accommodation for the construction crew, with the facilities remaining for future operations; and completing all infrastructure, which will enable planned production to start next year.

Under the terms of the JV agreements with LNSG, True North was able to issue the ‘commencement notice’ after securing a C$11-million financing package from LNSG in early October.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
True North Gems, tel +1 604 687 8055, fax +1 604 889 1240 or email info@truenorthgems.com.