Fall in diamond prices forces Shear Diamonds to close Jericho mine

6 September 2012 (Last Updated September 6th, 2012 18:30)

Shear Diamonds has temporarily halted production of high-grade stockpiles from its 100%-owned Jericho diamond mine in Nunavut, Canada.

Jericho mine, Canada

Shear Diamonds has temporarily halted production of high-grade stockpiles from its 100%-owned Jericho diamond mine in Nunavut, Canada.

A steep fall in the world market prices for diamonds, below break-even prices, had begun affecting Shear's profitability, prompting the diamond exploration company to halt production.

The company expects to seek financing or alternative transactions for further exploration and plans to restart production following market recovery.

Shear president and CEO Julie Lassonde said the closure was due to factors out of the company's control.

"Prices have dropped significantly just as we were hitting our stride," Lassonde added.

"Shear had assembled an outstanding team that has enabled us to overcome many challenges and achieve our goals, including recently repairing a damaged thickener core well ahead of schedule and on budget."

Earlier in June, the company, along with diamond marketing partner and lender Taché Company, intended to fund production from the stockpiles but postponed sales of shipped parcels with the hope of a quick price recovery.

During the interim phase and until prices improve, Shear will look at exploration assets proximal to the Jericho site such as its Carat and Muskox properties.


Image: Shear has decided to suspend operations at the Jericho diamond mine. Photo: Shear Diamonds Ltd.