If the grade and diamond value for a deposit are encouraging, a feasibility study is commissioned to determine the economic viability of a mining operation. The capital cost to bring a diamond deposit into production are considerable. For example, each of the two diamond mines currently operating in the NWT was constructed at a capital cost of $900 million and $1.3 billion. In determining feasibility, many variables must be considered. The most important of these variables include the following:
- the best approach to development of the deposit;
- the capital cost of establishing a mine and mill;
- the anticipated operating costs;
- the optimum scale of operation;
- the forecast revenues; and
- the overall economic returns to be expected from the investment.
A full assessment of the environmental and socio-economic impacts of the proposed operation and a determination of the appropriate mitigative measures are also undertaken at this stage.
Completion of a full feasibility study and the related technical evaluation will typically require a period of two to three years.