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Message: Embee Diamonds and City of Prince Albert... time is of the essence
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their take on a possible timeline for Shore Gold's first mine and the need for diamond value added developments in Prince Albert. See what you see...

In part from page 2 - Embee Diamonds September 20, 2012 letter to Mayor Jim Scarrow & Council... City of Prince Albert
It is highly likely that Shore Gold will have their Provincial Environmental permit for their proposed diamond mine(s) in Fort a Ia Corne (FALC) within Q1 of 2013. With that, financing and then development of the project should quickly follow.
But this good news also brings with it a timeline, and a deadline- time is of the essence ...
The Fort a Ia Corne district has been identified as the major impact zone from diamond mining. As such, the Diamond Development Advisory Committee (DDAC) has been formed and meeting regularly with Shore Gold - this includes the communities of Prince Albert, Melfort, Nipawin, Tisdale, Meath Park, Choiceland; plus other towns, villages, rural municipalities, First Nations and Metis Regions in the area.
Yes, these will all see economic benefits from the development- increased tax bases, housing developments,
employment, retail lift, population increase, contract engagement, etc. But they will also see the majority of the impact on their infrastructure, social structures, hospitals, police, and the like.
There is a partial offsetting-solution to these issues; insure that more value-added work stemming from FALC diamonds be done within the DDAC region. As with Potash/Canpotex, we should retain certain value items with Saskatchewan.
We do not want the same complete-lack of value-added to happen to diamonds as did with the uranium sector.
For this value added to occur there must be certain political items put into place before the permits are issued- they need to be built into or function alongside these permits.
The items have been proven possible in other jurisdictions, and are:
1. FALC diamonds must be sorted within the DDAC region,. not Saskatoon as is stated within Shore
Gold's Environmental Impact Statement. This only requires a small facility with minimal staff, but it
does see some economic impact and then the following items become feasible.
2. Some if not all FALC diamonds must be made available for sale within the DDAC first prior to made
available elsewhere in Canada- and not a foreign country as is the industry norm. If they are all sold
here, the government expense of 'valuation' is removed as the tax/royalty is based upon invoice, not
estimates. Local purchasing allows local cutting/polishing businesses be developed. See also the
"Note" below.
3. An "Export Processing Zone" (EPZ) must be established for diamond value-added businesses to
physically work within - this includes cutting, polishing, and jewellery creation. The key item is that
GST not be added to diamonds purchased locally for local processing, that are for international
export only (diamonds are a high-cash- flow business requiring any up-front cost limitations
possible be put in place) (exported diamonds would see the applied GST rebated, so why apply it
then rebate it, placing a burden on business and creating more paper-work?).
4. A Diamond Business Park be developed to accommodate the EPZ - this would include with bonded
warehousing; plus sales, cutting/polishing, and jewellery creation facilities. The property tax rate
within this Park, and for this businesses designated as qualifying in the diamond industry within the
City, should be waived for the first 5-years to be competitive with other jurisdictions. Furthermore,
buying offices for diamantaires located elsewhere could be established in this area.
We suggest presenting this to City Council.
5. A Certificate of Authenticity be developed and then eventually attached to all diamonds mined, cut,
and polished within Saskatchewan to prove they are 100% Canadian"
6. If possible, flights between Prince Albert and Calgary to be developed to better accommodate
international diamond buyers.
We ask that the City of Prince Albert facilitate all of the above six requests.
The short of it is, "Why do diamond value-added work within the DDAC, if you need to travel to Antwerp or even Toronto to purchase the diamonds, or if other jurisdictions are cheaper to work in?"
Note: The diamond industry is unique, the purchasing of rough diamonds (freshly mined but unprocessed) generally occurs in Belgium, and more recently- Botswana.
When Embee first began working from Prince Albert, we were required to fly to Antwerp to purchase diamonds mined in the North West Territories. Not only were there cost, time, shipping, and currency issues involved - there were no guarantees that what we bought as Canadian diamonds were Canadian diamonds unless they were from BHP Billiton. More recently, Embee can now purchase Harry Winston rough (Rio Tinto) in Toronto.
All other miners (those excluding BHP) have other sources from outside of Canada, from which diamonds could make their way into the premium "Canadian" stream. Also, diamonds are an extremely portable and difficult to trace form of currency/wealth. Therefore, diamond security is more about how many times and where the diamonds stop, than any other product.
Embee's decades of global diamond experience, demonstrates that the above steps would see the most economic benefits from affiliated businesses land within the DDAC region. This will also see an increase in diamond related tourism which can be enormous- that will further benefit the DDAC members (whom we kindly request you share the content of this letter with as we do not have access to the extended list).
Thank you,
Embee Diamonds
Evert P. Botha, Chief Operating Officer
--------------------------------------------------------------------------------------------------------------------------------------
Pages 7 to 11 are also good reading imho
Report Title: Diamond Industry Presentation Proposal
(RPT# EPP- 12 -148)
Date: Oct 01, 2012
Prepared By: Joan Corneil, Director Economic Development and
Planning
Prepared For: City Council
_____________________________________________________________________________________
In part:
BACKGROUND: Shore Gold has announced that diamonds in sufficient value have
been found in the Forte a La Corne site to warrant a move forward towards mining
these diamonds. Since that time various internal and external conditions have
caused delays in the move forward. The City has now been informed that there is
some urgency for a response from the City to the newly distributed Environmental
Assessment Study (EAS). There will be a public process regarding the final approval
of the EAS.
The City will attend a meeting of the Diamond Development Advisory Committee
(DDAC) on Oct 16 in Tisdale. This group has been organized by Shore Gold to
share information about the Star Orion project located in the Fort a Ia Corne area. At
this time it is anticipated by administration that the implications and process will be
discussed with the affected communities as represented by the municipalities and
agencies on the DDAC.
The City and the now defunct Prince Albert Regional Economic Development
Authority (PAREDA) engaged Martin Irving to develop a review of the impacts and
provide a confidential document regarding the work that would need to be done to
attract the diamond industry jobs to the area. A work plan derived from that report
is outlined in the attached document.
One of the items addressed in the report was the fact that the economic impact,
both positive and negative, would need to be addressed with the Province in regards
to royalties and compensation. The area municipalities will see increased use of
their existing infrastructure and facilities, roads, schools., health care etc. and should
be compensated through various ways. One way is through the legislated
agreements to do value added in the province. This includes sorting and processing.
Another method of compensation is the sharing of royalties with the affected
municipalities.
It has been suggested by persons connected to this sector that there is some
urgency that needs to be applied to the process in that the permits that Shore Gold
is seeking should have conditions favoring the value added sorting and processing
within the Province. It is felt by those within the industry that these conditions should
be embedded in the permits, and that the conditions would apply to any further
assignees or companies mining the diamonds.
DISCUSSION: I have contacted an acquaintance that worked extensively in the
uranium industry and is familiar with the systems and processes involved in the
mining industry. He indicated that the process is as follows:
1. Exploration Permits
2. Excavation permits
3. Environmental Impact Study
4. Permit to construct and extract
a. could contain the conditions to be met such as values added in the
Province
b. Albert has cautioned that normally those negotiations may have
already taken place under the exploration or excavation permits
On negotiations to have value added:
1. get ready for the service industry
-Have the service and value added businesses in place to
meet the mining company needs
-proximity to mine should make PA attractive to the mining
company
2. negotiations once mining company identified
We are seeking funding in partnership with another agency. At this time and as
time is of the essence, we will send out an RFP via email to prepare/complete
work identified in the work plan or other as identified.
OPTIONS:
1. Receive and File
2. Direct administration towards an alternative strategy
FINANCIAL IMPLICATIONS: Expected to· be between $10,000 and $25,000
Account 212115- 239- Consulting Services or alternative source if found.
PUBLIC NOTICE/COMMUNICATIONS: N/A
STRATEGIC PLAN GOAL: Economic Development - Business development
ATTACHMENTS:
1. Diamond Strategies
2. Timelines
CONCLUSION:
The City has a need to be prepared for the advancement of mining in the north. The
documents produced by what is to be considered a consultant with heavy expertise
in the diamond industry, suggest that communities can benefit from large
operations, but need to be ready for the development of that project. Shore Gold has
now completed the Environmental Assessment Study (EAS) and should be bringing
this document for public scrutiny in the near future and will simultaneously or shortly
thereafter be applying for the next permits to advance the project to the construction
and extraction stage. This is the time for the City to advance its requests to the
Province for inclusion into the permits as conditions of the permits.
Respectfully Submitted,
Joan Corneil, Director


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