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IntroductionWelcome to our 2009 Socio-Economic Annual Report. This provides an update regarding our contribution to the cultural, social and economic well being of the Northwest Territories. This report is complimented by De Beers Canada’s second annual Report to Society.

The diamond industry, like so many industries in 2009, faced a global recession. For our company, this was one of the most difficult years we had faced in the 120+ years we have been in operations globally. The impact of the recession meant tough decisions had to be made at Snap Lake to face these economic challenges head on, and to position our mine for long term success.

Although we downsized, and cut capital and operation expenditures in 2009, we remained committed to sustainable development. Apprenticeships and training continued and we have now exceeded our commitments. Our efforts to support literacy remained strong. We know low literacy is one of the biggest challenges we face in developing a skilled northern workforce. Most importantly, we worked safely, ensuring the distractions of a weak economy did not affect the ability of every worker to finish a shift without injury and go home safely to his or her family.

Many of our decisions impacted our employees, our contractors and our suppliers and they stayed the course with us. I thank them for their understanding and contribution to our success in 2009.

As we finalize this report, world diamond sales are coming back, allowing us to carefully ramp up to full production over the next two years. In December 2009, we announced hiring of 175 additional workers in 2010. We put more capital spending on the books for 2010 with the construction of important environmental infrastructure on surface and the new permanent accommodations for our employees. While the world economy remains on a very precarious balance, and we are watching it carefully, we believe that our experience from 2009 and our commitment to careful growth have put Snap Lake Mine in the right place.

As I reflect on the year, one thing rings loud and clear. Our employees are a resilient, dedicated, hardworking team of ordinary people and they have done the most extraordinary things in 2009. I am proud of their accomplishments and know you will enjoy reading about them.

Brad Corrigan,

Snap Lake Mine General Manager

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Senior Community liaison coordinator Sabet Biscaye leads a cross-cultural awareness course.

CultureBuilding bridges of understanding

Where can you learn to make your own dream catcher, duffle mittens or fish scale art? At De Beers Canada’s Snap Lake Mine, just head to the Cultural Centre.

De Beers understands that Aboriginal arts and culture are a rich tradition and deserve to be preserved. That’s why we built the Cultural Centre, a unique way of showing respect and appreciation for the people, customs and lifestyles in the north.

De Beers regularly invites northern Aboriginal artisans to the Snap Lake Mine to share their traditions and culture.

Employees and artists have embraced the concept, with each course being offered attracting between 70-100 participants. What makes it all so worthwhile is that they aren’t just learning how to make mittens or a dream catcher. Aboriginal employees are able to stay connected to their culture, while non-Aboriginals get a chance to learn about where they work and the people who have lived in the north for centuries. More importantly, it’s about learning and sharing with each other. It allows the employees to not only discover what makes them different from each other, but just how much they all have in common.

Eva Beaverho was at Snap Lake just before Christmas 2009 to teach mine employees how to make duffle mittens.

“It was a very exciting opportunity for me,” says Beaverho, who grew up in Whati, but now lives in Yellowknife. “It’s always fun to go to a new place and teach people something you love to do. They all caught on pretty quickly. You wouldn’t think mine workers would be all that happy to be cutting fabric and sewing, but they were.”

Her course was one of the most popular of the year, as participants were able to create something of their own to give as Christmas gifts.

“What was most fun for me was getting to know the workers who would come in for the lessons. There are a lot of interesting people from all sorts of different backgrounds. We would all spend time getting to know each other and learning from each other,” she says. “We learned about each other’s cultures and traditions. We had a lot of laughs, shared stories and even learned a few words in new languages.”

In order to convey a sense of warmth and hospitality, the Centre itself is set up like a traditional home, and can fit between 20-30 people at a time. It features a large collection of arts and crafts on display and resource material related to the north’s Aboriginal people.

Eva Beaverho demonstrates braiding techniques at the cultural centre.

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Nurturing traditionsAboriginal northerners cherish their long-held traditions and cultures. And De Beers does, too.

That’s why we are committed to not only providing job opportunities but also to promoting the social and cultural well-being of First Nations and others living in communities close to our Snap Lake Mine.

Our support for cultural traditions includes sponsoring and attending annual assemblies for Tlicho and Akaitcho First Nations, bringing First Nations elders and leaders to the Snap Lake Mine, and supporting community events. All employees are required to take a Cross Cultural Awareness course and are encouraged to participate in events at the Mine’s Cultural Centre.

“With De Beers’ support, we have been able to develop and deliver many programs and services for the Tlicho region,” says Tony Rabesca, Culture, Language and Communications Director at the Tlicho Government.

As a part of the Tlicho Youth Conference in August 2009, De Beers provided educational materials regarding healthy life choices, addiction awareness, Tlicho spiritual healing and the importance of developing support networks.

“That gives youth the tools they need to make positive choices in their lives. It gives them something to work for,” says Rabesca.

For the past two years, Snap Lake Mine management employees have had the opportunity to take part in the multi-day Trails of Our Ancestors Canoe Journey that ends in Whati and coincides with the Tlicho annual gathering.

“It’s a lot of hard work, very challenging and it’s such a worthwhile event,” says Grace Mackenzie, Community Liaison Coordinator De Beers. “We hope to have more employees participate in the future.”

Tlicho elders lead the journey and teach the participants – many of which are Tlicho youth about trapping, hunting and fishing. They also share stories and traditional Tlicho customs and beliefs.

“The elders are so knowledgeable and willing to teach. What is most impressive are the youth. They are all eager to learn and work hard,” says Mackenzie.

For De Beers, it’s a chance to gain a deeper appreciation of the culture, which leads to closer connection to our Aboriginal employees.

Another event De Beer sponsors is the men’s and youth’s hand games tournaments, held in Behchoko in March. In 2009, teams from all over the Tlicho, the Sahtu, the Deh Cho and even Alberta competed.

“The hand games tournaments are a blast. They are such a great way to celebrate Aboriginal history, and they really showcase our culture and how people can come together from afar in a spirit of respect while having fun with each other,” says Mackenzie.

De Beers supports Métis traditions, sponsoring the North Slave Métis Alliance’s annual Aboriginal Day Fish Fry.

Because 2009 marked Yellowknife’s 75th anniversary, the event drew a large crowd. Along with grilled whitefish, bannock and corn on the cob, participants were treated to fiddling, reeling and jigging.

“De Beers has gone above and beyond the call of duty in regards to community support,” says Bill Enge, President of the North Slave Métis Alliance. “The fish fry is a great example. Thanks largely to the help of De Beers, this year was our most successful yet.”

“We value these proud cultures and traditions, which is why we try to help strengthen and promote them,” says Mackenzie.

Other examples of support for culture include sponsorship of the Northern Arts and Cultural Centre and the Yellowknives Dene First Nation Youth Cultural Camp.

In 2008 and 2009 managers from Snap Lake Mine participated in the Trails of Our Ancestors Canoe Journey.


Workforce DevelopmentWhen John Rafacz first started as a miner, he showed up at the gate, his employer gave him a hard hat and sent him underground.

That was 42 years ago at a different mine, and thankfully, much has changed.

“My dad was a miner. My grandfather was a miner. I learned about mining and safety on the job, watching the older miners. Now, when it comes to safety and training, there’s no such thing as taking it too seriously,” says Rafacz, an Underground Training Coordinator at Snap Lake Mine.

That’s why, when De Beers was able to complement its on-site safety training with the Ontario Common Core (OCC) in 2009 we jumped at the chance. De Beers began certifying our underground trainers to the OCC standard during the six-week summer production shutdown.

“Our programs parallel each other,” says Rafacz. “We already had a De Beers Hard Rock Common Core training program in place that mirrored the OCC. Now, our employees have nationally recognized certification, and they can take that training with them wherever they go.”

The OCC is a provincial safety standard for surface and underground mining created by the Ontario Ministry of Training, Colleges and Universities in the late 1970s. It covers all the basics of surface and underground mining, including workplace inspection, scaling, staging, drilling and blasting, among others.

When the OCC was established, the Ontario Government was concerned with the number of mine-related fatalities. The government established a commission which tried to find the best way to reduce those fatalities.

In response, Ontario created a common core standard and implemented it across the province.

Training for national recognition

John Rafacz checks a five point safety card.

“The idea was to give people training so they could work safely,” says Rafacz.

The program is recognized across Canada, but has never been offered in another jurisdiction before. However, because De Beers has its head office in Toronto and Victor Mine in Northern Ontario, Snap Lake Mine was granted the opportunity to offer the course on site.

“We are very fortunate to be able to provide this course … because it adds a recognized standard to the value we place on safety,” says Rafacz. “When new employees arrive, the orientation portion introduces them to the environment, while the training emphasizes the importance we give to safety here.”

“A student taking the course at an Ontario school would have to pay between $6,000 to $10,000. Not many mines offer it any more because of the expense, so most miners have to take it upon themselves to get certified. But we give it as part of our on-site training,” says Rafacz.

“We are going to put everyone through this program. Once the hiring program is finished, then we will bring on current employees, provide them with a refresher on safety training, get them to do the test and get them certified as well,” says Rafacz.

It’s all about giving employees the safest job environment possible, and giving them safety training they can take with them wherever they go.

In 2009, Snap Lake Mine employees attended 12,135 hours of instruction.

Learning Centre leads the way

Thanks to the learning centre, and the support from the trainers, supervisors, coworkers and his community, Guild is on his way to becoming an apprentice heavy duty mechanic.

Guild was introduced to mining in 2007, when he took part in the mineral processing operator training course offered through the NWT Mine Training Society and Aurora College.

He finished the program and went to work in the mine process plant. Following the February 2009 workforce reduction, Guild went to work as a waste management assistant.

But he wanted more, and De Beers saw that commitment and helped him pursue his goals.

“He had never written a trades entrance exam. He worked closely with Bruce Spencer, Training Coordinator at the Snap Lake Mine, who tutored him. He went to the learning centre in his community. He is very committed to advancing his career,” says MacPherson.

For De Beers, getting employees to upgrade their training or education is a win-win scenario.

“We benefit from having a more capable and loyal workforce and the employees gain the confidence and new skills that come from having an education. We feel that as more employees take advantage of these opportunities and achieve success, others will follow,” says Spencer.

No company can succeed without a skilled workforce, especially in the mining industry. So what do you do when there simply aren’t enough qualified workers available? For De Beers, the answer lies partly in providing training at the worksite.

“We are in unique situation because we are the third mine in the NWT. When we started looking for skilled and qualified workers, most were already employed at the other mines. If we wanted to achieve our hiring targets, we needed to find unique ways to support training and find new ways of providing training,” says Gaeleen MacPherson, Human Resources Superintendent for the Snap Lake Mine.

That unique training includes an on site learning centre, where employees not only take mandatory training, like safety and orientation, but can also upgrade their education, for example work toward obtaining their General Equivalency Diploma (GED) or study for trades entrance exams. Through a work release program, we offer employees an hour off work to study in the learning centre for each hour they study on their own time.

The centre is equipped to provide courses such as First Aid, Confined Space Entry and Fall Protection. It can even arrange training on how to operate industrial equipment like forklifts, zoom booms and bobcats. The centre also develops new courses as required.

Since 2007, staff at the Learning Centre have trained approximately 1,400 individuals. In 2009, the centre led 5,452 courses totaling 12,135.33 hours of instruction.

De Beers also encourages and helps employees attend NAIT in Edmonton for a variety of courses, including master instructor. With Learning Centre staff assistance, other employees have accessed courses from the Kimberlite Career and Technical Centre run by Yellowknife Catholic Schools and Aurora College in Yellowknife.

For Travis Guild, the training offered through De Beers has allowed him to set his sights on a new career.

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Training and developmentWhen De Beers began mining for diamonds in the NWT, it made a commitment that northerners would benefit from De Beers’ success. That included providing employment and training opportunities for northerners. De Beers committed to create 40 training positions by 2010, including 10 trades training positions, 10 apprenticeship positions and 20 underground miner positions.

De Beers is fulfilling that commitment.

“Our training program aims to address the shortage of tradespeople in the NWT, a gap that is also a skill gap in Canada,” says Kelly Arychuk, Manager Human Resources and administrator at the at Snap Lake Mine.

By investing in training, De Beers is filling its need for employees, but is also developing a northern-skill base that will benefit the NWT long into the future.

“The trainees build their skills, increase their confidence and contribute to their community’s economy. But more importantly, they act as role models for others in their community. They are an example to others that says ‘if I can do it, you can too,’” says Arychuk.

De Beers is proud of its apprenticeship program. The company covers education costs and pays apprentices their regular salary when they are away from the mine attending mandatory classroom work. This allows them to focus on their studies without having to worry about things like how they will pay their family’s grocery bill.

In addition to providing onsite training, De Beers has established partnerships with agencies to develop the skilled workforce needed at Snap Lake Mine.

This includes working with the NWT Mine Training Society and Aurora College – regularly taking students from Underground Mine Training or Mineral Processing Operator Trainee programs into the mine for fully-paid work placements.

The programs are starting to bear fruit. Of the 16 who have so far embarked on the underground miner training, 10 have progressed to higher levels and are no longer considered trainees or have transferred to other positions on site.

On the apprenticeship side, seven of the eight current apprentices are Aboriginal workers, training as millwrights, heavy equipment mechanics and electricians.

In fact, one of those apprentices, Wade Bohnet, is expected to receive his journeyman electrician ticket in 2010, the first De Beers trained apprentice to reach that milestone.

(See article, page 7).

Training program numbers as of December 2009

Training 2010 trainee Trainees since Graduates target inception

Trades 10 17 3

Apprentice 10 8 0

Underground 20 16 10

Total 40 41 13

Apprentice Adrian Gherghe.

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First of many, more to comeThere are two things Wade Bohnet found at Snap Lake Mine – a career path and his fiancée.

Meeting his fiancée, Stephanie Smutylo who works in camp maintenance, was mostly a matter of luck. Working toward his journeyman ticket as an electrical apprentice was a matter of hard work and following his dreams.

Bohnet may not be the first to meet his future spouse on the job but sometime during the spring of 2010, he is expected to become the first apprentice to earn his journeyman ticket at the Snap Lake Mine.

His four-year journey began with a Snap Lake contractor in 2006. He started his apprenticeship with that contractor, but wanted something more permanent.

“Getting on with De Beers was great for me,” says Bohnet. “Contracting work can be very inconsistent. De Beers has always been steady.”

He had already completed his first year of apprenticeship, but hadn’t been able to take time off for school to take the next step in the apprenticeship process.

“He had a lot of hours built up, and we saw a lot of potential in him, so we brought him on and supported him throughout his apprenticeship training,” says Gaeleen MacPherson, Human Resources Superintendent for Snap Lake Mine.

Over the next two-and-a-half years, Wade completed all the in-school requirements of his apprenticeship, spending time at NAIT in Edmonton as well as at Aurora College in Fort Smith.

“De Beers was always supportive and accommodating when it came to my getting my education,” he says.

Bohnet, who was born in Fort Smith but moved to Yellowknife in Grade 6, first discovered his interest in electricity working as a labourer for a company in Behchoko.

“To me, there is something very exciting about electricity.”

And working at the mine, whether it’s underground or above ground, provides him with different challenges and a variety of opportunities for learning.

“The work here is never stale,” he says. “When I’m underground, because the mine keeps getting bigger, more power is constantly required. I’m always hooking up fans and ventilation systems and working on pumps and the underground communications systems. When I’m working above ground, it’s making sure everything around camp is running as it should.”

His schedule – two weeks on, two weeks off – allows him to spend more time doing what he loves most: spending time with family, reading, traveling and being outdoors as much as he can. And when he’s feeling more adventurous, parasailing.

With the finish line in sight for his apprenticeship, Bohnet sees a bright future with endless possibilities for him and his future wife. “I feel prepared for anything,” he says.

“De Beers was always very supportive and accommodating…” – Wade Bonnet.


Women in miningMore opportunities, more time for family

At 4’9”, Sharon Alanak might just be the smallest person at the Snap Lake Mine.

But she carries herself like she’s six feet tall. And when she’s on the job with Mine Operations, she’s busting rocks, literally. Alanak started as a rock breaker, but in just over a year, was promoted to crusher operator – working 263 metres underground.

“I love it. I’d always wanted to work in the mines, but was never able to because I had a young child to care for,” she says.

As her child grew older, Alanak, who grew up in Ulukhaktok but now lives in Yellowknife, knew she wanted to give her child more opportunities, but also more family time.

“Working as an office manager five days a week actually left me with little time for my family. Now, with De Beers, I spend half the year with my family,” she says. “And living in Yellowknife means there are better opportunities to travel farther south, and it’s cheaper to live here.”

Her life changed in 2008 when she walked into the Mine Training Society’s office in Yellowknife and enrolled in the Underground Miner Training Program.

“I needed a change of career, and mining offered so many opportunities,” she says.

Sharon completed her three-month training, knowing the opportunities were there, but without the assurance of a job upon completion.

“But then, on my last day, I was told I was hired at De Beers,” she says. “That was the greatest moment. Not just because of the job, but because of the congratulatory hugs and handshakes from the guys in my class. They were giving me their approval to be a part of their group, and I’ve felt part of the team ever since. At De Beers we’re like a big family.”

And for Alanak, that’s the biggest compliment she can give. When she’s at home with her family, she misses her work family, and when she’s at work, she misses home.

“The best part of my job is being a part of this unique family – we all watch out for one another.”

Her story shows that at Snap Lake, women are welcome in any role, providing they can do the job.

In 2009, about 60 women representing about 14 per cent of the total mine workforce were employed at Snap Lake Mine, including three in management positions. Of the rest about one-quarter of women were in unskilled positions, and 66 per cent in semi-skilled or skilled jobs.

De Beers also continued to participate in the Women in Mining Oil and Gas research program. Results of the research will be released in 2010.

Sharon Alanuk’s life changed in 2008 when she walked into the Mine Training Society’s office in Yellowknife and enrolled in the Underground Miner Training Program.

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Mike PenkalaUndergroundMineTrainer

For the past two years, Mike has been training underground miners at De Beers.

Mike, who has almost 40 years of mining experience, came to De Beers after working with Procon, one of the company’s contractors. “I was looking for more stability,” he says.

For Mike, the best part of his time at work comes from the “aha” moments of training.

“We sit down with a trainee, and even an experienced miner, and go over SUPA (See, Understand, Plan, Act) for pretty much everything. The part I like is once they’ve done the job and they say, ‘that was awful easy’, like they’d never thought of doing it that way. You can see it click. You know they understand and they have gained something valuable that will stay with them,” he says.

Mike, who’s from Yellowknife, and his fellow underground mine trainers – John Rafacz and Kevin Oberkirsch – were recipients of the 2009 De Beers Canada CEO Award for Safety, Health and Environment. They organized a safety campaign, “Why we work safely”, that daily reminds miners that they need to work safely so they can go home after each shift to their families.

ProfilesLen GrafGeneralForemanofSiteMaintenance

For about three years, Len has been responsible for all maintenance at Snap Lake Mine – whether it’s the electrical wiring underground or plumbing on the surface.

What Len finds fascinating at the mine site is the mix of people from across the Canada and the north.

“Working together with different philosophies and cultures on a daily basis makes it challenging. You get someone from Toronto, who is used to a very rushed, high-speed environment, working with someone from a small community, who is more laid back and patient. It’s interesting to see those two contrasting styles come together and learn from one another,” he says. “Of course, sometimes I have to coach on the need to slow down or pick up the pace, but I try to understand each individual from his or her point and view, understanding where each is coming from.”

Kevin StroederSiteServiceSupervisor

For nearly three years, Yellowknife resident Kevin Stroeder has enjoyed working at the mine. For him, the best part about his job is the opportunity to be where he enjoys being the most – outside. He says there’s always something new to see and learn at De Beers, and he enjoys seeing the new faces and training new people.

“There’s always something going on,” he says. “I enjoy my whole job.”

With new and different challenges facing him every day, Stroeder couldn’t be happier because he not only gets to work with colleagues, but also his friends.


Marjorie BlackWasteManagementAssistant

Now in her third year at Snap Lake Mine, Marjorie Black puts some of her family’s values into work each shift as a Waste Management Assistant.

“My grandfather used to tell me that if you keep a messy house, visitors will judge you by the way you keep your house,” she says. “Housekeeping is important.”

Marjorie started at the mine as a trainee in the process plant, but transferred to site services. It’s a job she loves and one that wins her regular accolades from peers and supervisors alike.

She and her cross-shift have been instrumental in organizing the mine’s waste management area, ensuring everything’s properly labeled and put in the right place. That means recyclables like pop cans can be sent out, waste is segregated into the right landfill and used oil is put to use to heat the camp, reducing costs for the mine.

“Nothing goes into the waste management area without a label,” says Marjorie. “In order to have pride in your job you have to love what you do.”

That love of keeping the mine tidy was honoured in 2009 as she was one of 11 individuals or work crews nominated for De Beers Canada’s CEO Award for Safety, Health and Environment.

From Behchoko, she’s mother of four, including a daughter who is an apprentice at Snap Lake Mine. In her off time, Marjorie likes to make the most of her time with her family . She also enjoys doing beadwork.

Jeff NystromMaterialsManagementCoordinator

When you’re 220 kilometres from the nearest store, let alone a steel manufacturer, it’s not always easy to get the supplies you need. Throw in a road that’s only open six weeks of the year, a river that can’t be crossed a couple of times a year, and it makes it even more challenging.

Thank goodness you can get Jeff to do your shopping for you.

Jeff, who joined De Beers at the beginning of 2009, processes purchasing orders, finds a vendor and works with airport and logistics staff to get orders from vendors to the right place on site.

For Jeff, who lives in Fort Smith, the highlight of 2009 was getting the new camp modules for permanent accommodations up to site. It wasn’t just the work involved in organizing the shipment, or even figuring out where and how to store them, that was exciting.

“What was really exciting was the buzz that this created. We’ve been staying in a construction camp, which has its limits in terms of activities. But we’re getting something more permanent that we can call home while we’re here,” he says.

The excitement was such that a recreation committee was formed to plan new activities and events.

“I can’t wait to see what’s going to happen once we settle in.”

The camp is scheduled to open in October 2010.

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Thanks to De Beers, Laurie-Ann Lines can concentrate on her schoolwork.

Scholarship gives Ndilo student peace of mind

Scholarships

Lines hopes to give back to her community by returning to work in the field of science. She also wants to encourage others in her community to pursue a post-secondary education.

“I have a lot of support from my community, which is encouraging because I’m so far away from home”, she says. “It’s really encouraged me in my studies and I hope to continue my education. I don’t just want to stop at a degree.”

A range of scholarships are offered to Yellowknives Dene First Nation students each year through De Beers Impact Benefit Agreement. Cash awards are available for two students in each of Grade 10, 11 and 12, two awards for Adult Basic Education/GED students and six scholarships for students attending post-secondary education.

As well, De Beers funds five scholarships for North Slave Métis Alliance members attending post-secondary education. In 2010, De Beers will introduce its scholarship program for NWT residents.

Laurie-Ann Lines, who was born and raised in Ndilo, is studying physiology at the University of Saskatchewan in Saskatoon. She was the recipient of a $1,500 scholarship from De Beers and the Yellowknives Dene First Nation. This allows her to concentrate on school, rather than worry about how she’s going to pay for it.

“I couldn’t imagine doing as well as I have and working at the same time,” says Lines.

Post-secondary education can be expensive, and for Lines, the cost of rent and food are not the only things she worries about. “I use the money for school stuff, like printing and books. I also bought a miniature filing cabinet to keep my receipts and bills in order.”

Since she is required to write many essays and reports, just the cost of printing paper can become a burden.

“I just printed out a 28-page paper and I think I’ve printed and photocopied about 1,000 pages this year. That’s not even including what I’ve printed off on my own printer.” At 10 to 35 cents a page, the cost of handing in homework can quickly add up.

The 22-year-old says she’s thankful for the community support she’s been given, along with the scholarship.

“The scholarship is something that has really helped in my education,” she says.


Business DevelopmentSnap Lake weathers the storm

Patience, persistence and optimism. That’s what De Beers Canada needed in 2009 as the world was rocked by the economic downturn.

The Snap Lake Diamond Mine had officially begun operations in 2008, staff morale was high and a long, bright future was in sight. However, 2009 put that optimism to the test.

The first signs of an economic downturn appeared in late 2008, when the U.S. credit and housing market hit bottom. By early 2009, the whole world was affected.

The economy is much like a faucet. When the economy is good, the tap flows strong; when it’s bad, the flow slows to a drip. People stop buying goods, and diamonds, a luxury item, are one of the first off the shopping list. Of the top three diamond consumers in the world, only China increased its diamond consumption. The top consumer, the U.S., saw a 49 per cent decrease in sales, while Japan’s consumption fell 24%.

With slowing demand for diamonds, the Snap Lake Mine was unable to build on the early 2008 momentum.

As a result, De Beers looked inward, searching for solutions that would allow it to protect its investment in Snap Lake, and build a solid foundation for the mine’s 20-plus year lifespan.

“We cut services and supplies first, but it wasn’t enough to conserve our cash position to get us through the year,” says Ken Smith, Superintendent, Business Development and Materials Management for De Beers Snap Lake Mine. “The downturn happened so quickly. We needed to take quick, decisive action. In order to be able to survive the downturn, our management team made some very tough decisions.”

Two mine shutdowns were planned in 2009, six weeks during the summer and four weeks in December, although the second shutdown was eventually cancelled as the economy improved.

Contractors, like Tli Cho Landtran, Tli Cho Logistics, Ek’Ati Services and Sandvik, and suppliers were affected as well.

“A lot of our suppliers are dependant on us – they have positioned themselves to provide service at a certain level of activity, but we couldn’t provide that in 2009. There was disappointment among our contractors and our employees, but there was a sense of understanding. This took everyone by surprise. Everyone was affected,” he says.

For Tli Cho Landtran, which provides transportation support year round, the downturn meant a considerable drop in the number of shipments to Snap Lake from previous years.

“We had to streamline our operations, lay off some of our employees and run pretty lean for a while. But our company is financially stable and we were able to ride out the rough year. We’re a fairly strong company, and besides, we’re in it for the long haul,” says Ron Near, regional manager for Tli Cho Landtran.

There was always confidence and optimism at the mine that things would rebound. And they are. As the economy stabilizes, diamond prices are improving. De Beers expects to return to full production by the end of 2012, and its ramp up is a careful and controlled growth plan.

The downturn offered Snap Lake Mine – indeed all of De Beers Family of Companies around the world – the opportunity to retool processes, making them more efficient.

“Prior to downturn, we were more aggressive in supplying the mine, using the ice road for the majority of our supply needs. Now, we focus on getting things to the mine when we need them,” says Smith.

One way De Beers has done that is through warehouse supply contracts.

Keith Wellin with Tli Cho Logistics, operates a zoom-boom at the Snap Lake Mine.

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Expenditure Percentageofin2009 Expenditure

Total Spend $155,953,429$155,953,429

NWT Portion of $116,206,871$116,206,871 74.51% Total Spend of Total Spend

Aboriginal Portion $58,967,035$58,967,035 50.74% of NWT Spend of NWT Spend

TotalExpenditureIncludingConstruction

TotalExpenditure Percentageoftoendof2009 Expenditure

Total Spend $1,390,997,118$1,390,997,118

NWT Portion $977,537,416$977,537,416 70.28% of Total Spend of Total Spend

Aboriginal Portion $630,388,456$630,388,456 64.49% of NWT Spend of NWT Spend

Note: These numbers are based on a calendar year and thus are slightly different than those numbers presented in the De Beers Canada Report to Society, which are based on De Beers Canada’s Fiscal year. In 2010, an adjustment will be made to bring this reporting into alignment.

De Beers identified products and equipment that it uses continuously, but doesn’t need huge quantities of on site. That includes things like safety gear, paint, nuts and bolts, shovels, gloves, pipe, drill bits, couplings, underground equipment, electrical supplies, and so on.

“We enter into long-term purchasing contracts with suppliers, and provide a local supplier with a guaranteed level of demand,” he says.

Also, De Beers reviewed its inventory, identified overstock and looked at getting some returns. It also went through the construction equipment still on site and backhauled that. With the help of Tli Cho Landtran, De Beers auctioned off the equipment.

“It’s these little things that we are now more cautious of,” says Smith.

While the economy has improved, business pressure still exists. The marketplace is more competitive and companies have shifted their way of thinking and broadened their horizons.

“The services we need from contractors are always there, and we still help them ensure they meet our needs. But now, we’re focusing more on partnerships,” says Smith.

One way De Beers encourages northern and Aboriginal involvement is with its NWT Business Registry. Businesses can submit their profiles and access information about goods and services required at Snap Lake Mine.

Dan Kipling, De Beers Warehouse coordinator works at keeping the warehouse efficient.

In 2009, nine NWT businesses either entered or modified their profiles in our NWT Business Registry and by the end of the year, 163 Businesses were registered.

Another way De Beers is generating partnerships is through its Business Opportunities Breakfast, held each year in November.

Begun in 2007, the breakfast is a venue where businesses can learn about upcoming opportunities and De Beers can strengthen existing relationships with businesses and foster new ones. It’s also an opportunity for businesses to sit together and talk, which could lead to their own partnerships and service to Snap Lake Mine.

In addition, De Beers publishes an annual Northern Business Opportunities Profile, which outlines our Northern Business Agreements and Commitments, lists items to be purchased for the following year’s winter road supply and provides Snap Lake Mine Materials Management department contacts, among other information.

Northern Spending2009Operations&CapitalExpenditures


Ron Near, left, is regional manager of Tli Cho Landtran which hauls freight to and from the Snap Lake Mine.

Tli Cho Landtran–in it for the long haulYou can’t mine diamonds by yourself. Especially when you’re 220 km from the nearest city; when for 10 months of the year, you are inaccessible except by plane. De Beers Canada knows that, and that’s why we have built strong partnerships with northern contractors who know how to work effectively in challenging northern conditions.

One such contractor is Tli Cho Landtran, the joint venture between the economic development arm of the Tlicho Government and international transportation giant Landtran Group of Companies.

Tli Cho Landtran hauls freight to and from the Snap Lake site. It is also responsible for on- and offloading the freight, building and maintaining the spur road between the ice road and the Snap Lake mine site, and providing year-long logistical support.

“De Beers sees our relationship as a partnership. We have worked closely together, and communicate almost daily, which is one of the reasons for our success,” says Ron Near, regional manager of Tli Cho Landtran.

Another reason for the successful partnership is the creativity Tli Cho Landtran provides its client. Not only does it ensure the freight going up to the mine site is properly handled, it also plans the winter trucking season so that every truck coming back from the site is carrying material. That means working with De Beers to assess all equipment and supplies on site and then organizing them for the backhaul.

With the economic downturn digging in its heels in 2009, Tli Cho Landtran knew it was going to be a tough year.

“We identified early that 2009 was going to be slow, so we looked outside for new businesses. With De Beers, we came up with some solutions that were beneficial to both of us,” says Near.

One of the most successful solutions was organizing and holding an auction of surplus material.

“They played a big role in helping us divest surplus equipment. They suggested we auction the material off. They backhauled and stored the material at their quarry, and then helped us hold the auction. They work in our best interest and provide valuable advice,” says Ken Smith, Superintendent, Business Development and Materials Management for De Beers Snap Lake Mine. “We are proud of the tremendous job they do for us.”

Another example of this working partnership was the support Tli Cho Landtran provided for the new camp modules at the site. Tli Cho not only transported the modules up, but organized the shipments and offloading to ensure that everything was catalogued properly, ensuring that the set up would go smoothly.

Near says they wouldn’t do it any other way.

“On the business side, yes, De Beers is a very large client and they’ve helped us grow to where we are now. But on the personal side, we truly appreciate working with De Beers. It’s been rewarding to see the mine grow to what it is today,” says Near.

“We both understand that we don’t have control over world economics. Our relationship is able to withstand the bad times and enjoy the good times. We look at the partnership we have with De Beers and we know the good times will come back. “

15

Contractor makes security investment pay off

Foresight and an initial investment can lead to great things. Just ask Patrick Doyle, the president of Det’on Cho Scarlet Security, a company hired by De Beers to provide training for its Snap Lake Mine spur road staff.

A few years ago, Doyle and his partners at Scarlet’s parent company Alarand Ltd. identified a new growth market – providing security to remote, industrial sites in the north.

“In business, successful companies need to look toward the future. A few years ago, there really was only one player occupying that niche market,” says Doyle.

“That’s when we started exploring a joint venture with Det’on Cho Corporation, the economic development arm of the Yellowknives Dene First Nation. There was no urgency so we took our time, talked and fostered the relationship before putting a deal in place,” says Doyle.

Scarlet’s first job, prior to the joint venture with Det’on Cho, was providing fly-in, fly-out security at the Baffinland Iron Mines Corp. project on Baffin Island in Nunavut.

That led to a contract with the Tibbitt-to-Contwoyto Ice Road Joint Venture, which includes De Beers. Scarlet was tasked to provide all security on the ice road, which meant 12 officers, two dispatchers, a supervisor and a coordinator were needed.

“In business, successful companies need to look toward the future.” – Patrick Doyle

“We patrol the road to ensure the safety of all users as well as to protect the integrity of the ice,” says Doyle.

They monitor speed limits and ensure proper spacing between trucks. They can also issue infraction tickets.

Scarlet has a strong focus on training, health and safety and hazard management. Most of the officers working with Scarlet have extensive backgrounds in law enforcement.

For De Beers, hiring Scarlet made sense. It was also important to ensure workers from all members of the Winter Road Joint Venture had the same level of training.

‘They are very good at what they do. They provide great service, and their staff are all trained professionals,” says Tom Raine, Manager Protective Services.

“Scarlet is a great northern story. The company had great foresight in terms of preparing to get the ice road security contract. The owners invested in their business and now they are seeing the benefits,” says Raine, “That’s a lesson other businesses can learn from. If you invest in your company, and talk to us, show us how you can help and we can benefit, we can make it work.”


Heart healthy meals are offered to all workers.

“We understood this was the best thing for the company.” – Trevor Mogg, Drill Geologist

Well BeingSix week shutdown helps recharge workers

Unintended benefits can spring up when you least expect them.

So when De Beers announced it would shut down for six weeks over the summer of 2009, there was some apprehension, and many questions.

Questions like: What does it mean? Will I still have a job? Will the mine re-open?

Those questions were quickly answered, and apprehension turned to enthusiasm.

“I think at first, we were all quite shocked that we were forced to shut down. But when we explained that we wanted to make sure we remain a viable business, and this was the way to do, it turned into a positive thing. People started seeing it as a six-week holiday,” says Brad Corrigan, Mine General Manager.

Ask almost any employee – they returned to work refreshed and re-invigorated.

“We were all pretty optimistic about the shutdown. It was really an opportunity rather than a hardship. De Beers made it clear that we were all going to keep our jobs and we understood this was the best thing for the company,” says Trevor Mogg, a drill geologist who has been with De Beers for 10 years. “And besides, who wouldn’t want six weeks off in the summer?”

Employees took advantage of the situation to re-energize and do things they’ve always wanted to do but never had the time.

For Trevor, those six weeks gave him the opportunity to pursue a dream.

“I always wanted to be a cowboy,” he says.

Following a visit to the Yukon and Alaska, Mogg found his way to Homeplace Ranch in Kananaskis country, just south of Calgary, for a two-week stay.

The guest ranch gives visitors a chance to ride horses along mountain trails, live in rustic cabins and enjoy a real western experience.

Mogg wasn’t just there to have fun and enjoy the scenery. For one week, he spent the time working as a trail guide and ranch hand.

The owner was so impressed with his work that he even offered him a job; an offer Trevor couldn’t refuse.

“I just fell in love with it,” he says. So, when he’s not at Snap Lake Mine, he’s at the ranch having the time of his life.

“I’m kind of living out of a suitcase now, but it’s a good time and a lot of fun.”

Chris O’Neil, Ek’Ati Services, is a chef at Snap Lake Mine.

17

To help employees be able to enjoy adventures like Mogg’s or even spend relaxing time at home, De Beers took a proactive approach.

“Prior to the shutdown, we gave employees as much information as possible, and told them why we needed to do this. We then met one-on-one with them to discuss options and how we could assist them,” says Gaeleen MacPherson, Superintendent Human Resources.

Some employees had enough vacation to cover the whole six weeks. Those who had less were offered choices so they didn’t end up with a month of unpaid leave. We provided money management plan and information on how to access Employment Insurance benefits, if that was a choice employees felt fit.

Ensuring employees could manage money through the closure, the company offered a savings plans to help employees set funds aside for when they were off work More than 90 per cent of workers participated in the savings plan option.

In addition, De Beers worked with our contractors ensuring they had time and information to set up similar money management programs for their staff.

The somewhat unexpected benefits of the shutdown aside, the company works hard on a variety of health and wellness initiatives, at the mine and in the community.

Through the Employee and Family Assistance Program (EFAP), employees and their family members can access a variety of services from Shepell-fgi. This includes counselling services and other programming, as well as a monthly newsletter distributed to all workers.

Amanda Soldat keeps active working out on a treadmill.

A Joint Consultative Committee meets monthly, where employees and managers discuss issues and address any concerns from around the mine site and the Yellowknife office. At Snap Lake, new fitness equipment was installed in 2009 and there’s mandatory drug and alcohol training for workers.

A significant investment in 2009 was a partnership between De Beers and the Yellowknives Dene First Nation (YKDFN). We worked together to inventory health and wellness programs available to YKDFN members. This will allow us to work together in 2010 to identify gaps in service that De Beers can work to fill.


Social InvestmentBooks in Homes a valuable literacy toolYouth in eight schools think Christmas takes place twice a year: when Santa comes to town, and when De Beers brings its Books in Homes program.

Since 2003, De Beers has been handing out three books a year to every youth in Behchoko, Wekweeti, Whati, Gameti, Ndilo, Dettah and Lutsel K’e. In that time, De Beers has invested $420,000 and distributed 21,000 books, the equivalent of six books for every man, woman and child in those communities. In fact, for those youth who have taken part in the program since the beginning, they would have received 21 books each.

Books in Homes was begun as a way for De Beers to have a lasting, meaningful impact on the literacy challenge facing the Northwest Territories. By building home libraries, the company hopes the importance of reading and literacy is embraced by children and parents. Over the years, the kinds of books being chosen by youth has changed as they pick material that tests their improving reading skills and matches their interests.

“It’s a great program that the kids love. Kids look forward to when we come into their community,” says Grace Mackenzie. “And we look forward to it too. It’s wonderful to share the joy of reading, and to reconnect with youth you met the last time around.

The program has made such an impact that in 2009, De Beers Canada received an NWT Ministerial Literacy Award for its commitment to literacy, for supporting Northern people to lead fulfilled lives, and for contributing to a strong and prosperous society.

De Beers has partnered with the Yellowknife Book Cellar to provide and distribute the books.

“We chose a northern company as part of our commitment to support northern business,” says Mackenzie. “They are a wonderful business to work with, and they help us tremendously in selecting books and setting up the book display.”

Part of the program is bringing reading role models into the community. De Beers encourages its staff to participate, especially those who come from those communities. In addition, MLAs representing the communities are invited to take part.

“It was a great experience, encouraging youth to read.” says Jessica Abel, who is from Dettah. “I was able to show them that they can get good jobs like mine if they stay in school.”

The experience is only going to get better. Fort Resolution, new to the Books in Homes program, is coming on board for 2010.

Passionate about literacyLiteracy is the first step in empowering people to shape their own future and is a key to ensuring individual opportunities, community development and economic success. In 2009, De Beers supported the following literacy activities:

• northWords Writers Festival (Premier Sponsor)• NWT Literacy Council, donation from Business

Opportunities Breakfast• Kaw Tay Whee School – Dogrib Video Project• Gumboots 19th annual concert – celebrating

northern stories in song

Mine General Manager, Brad Corrigan, and Grace Mackenzie, De Beers Community Liaison Coordinator share the joy of reading with students at Lutsel K’e Dene School

19

Social InvestmentHelping hands for communities

Some of the highlights of our community contributions include:

• Yellowknives Dene First Nation Christmas festival/Youth Cultural Camp

• Lutsel K’e Spring Carnival• Exercise equipment for Jean Wetrade Gameti School• YWCA Taiga Adventure Camp for girls• Tree of Peace Friendship Centre – Talent Show and

Elders Christmas Feast• NWT Council of Persons with Disabilities• Northern Arts and Cultural Centre• NWT Aboriginal Business Conference• Tlicho Handgames Tournament• NWT Mining Heritage Society• Stanton Territorial Hospital Foundation• Kaw Tay Whee School• Northern Student Education Initiative• Prince of Wales Northern Heritage Centre• Astronomy North (Legendary Sky Diamond)• NWT Special Olympics• John Howard Society

Our support for communities is more than dollars. Employees give helping hands, because there’s no more rewarding way to have an impact than to roll up your sleeves and get to work.

At De Beers Canada, we see our social investments as more than just cheques and prizes. Wherever possible, we like to get involved and encourage our employees to take part in the things we sponsor.

Whether it’s cooking up burgers and hotdogs at the Miners’ Picnic, belting out a tune at the Tree of Peace Talent Show, or working with youth through Skills Canada, the smiles of our employees who take part in community events shine as brightly as our diamonds.

In 2009, a total of $1.69 million was spent on social investment and to support efforts to build capacity in communities. While the amount was less than 2008, we focused our efforts on projects we believed would have the most lasting impact.

Once again in 2009, the majority of our social investment dollars went to Education, Literacy and Training – totaling more than $1.2 million. We recognize the need to continue to invest training and apprenticeships, support youth, and work with training partners and communities to build a solid, sustainable future.

Approximately $200,000 went to sponsor community events and initiatives while the rest was divided among arts and culture, business development, sports and health.

The late Maurice Lockhart of Lutsel K’e fi ddles at the 2009 Tree of Peace Talent Show held each spring in Yellowknife. For the past several years, the event as been sponsored by De Beers Canada.


Tradition is a great way to bring communities together. So when a group of volunteers belonging to the Yellowknives Dene First Nation came up with the idea to hold a variety of Christmas celebrations, De Beers Canada was quick to jump on board.

The $5,000 donation wasn’t a lot of money, but it went a long way to bringing people living in Dettah and Ndilo closer together.

One of the highlight events during the week was a handgames tournament for youth, won by an exuberant team of pre-teen boys, aged between nine and 12 years of age.

The surprising results created a lot of buzz and excitement, and got the week’s activities off to a fun-filled start.

“The handgames are great for everyone,” says Bobby Drygeese, band councillor for the Yellowknives Dene First Nation and one of the volunteers who helped bring the celebration together. “It’s a great way for the community to get together, celebrate our heritage and watch the youth have fun.”

Elizabeth (Sabet) Biscaye, De Beers Canada Senior Community Liaison Coordinator, wasn’t content to just hand over the money and watch from the sidelines. She rolled up her sleeves, helping cook a pancake breakfast and much more, volunteering her personal time to help the Yellowknives Dene community celebrate Christmas.

“We’ve developed a solid relationship with the Yellowknives Dene First Nation. They are so committed to the well-being of their people, and we want to support that,” says Biscaye.

Celebrating with our communities

In addition to the handgames tournament, the week consisted of a number of activities, all designed to give the youth a fun and productive way to spend their break from school. There was a pancake breakfast, a craft and bake sale, a large Christmas tree was set up in N’dilo and a drum dance held on Christmas night.

“They sponsored the games. They helped with the food and preparations. The people from De Beers were wonderful,” says Drygeese.

As well as a lot of fun, the week was educational. Community elders shared their knowledge, traditions and culture with the young people whenever they could. They took them out on the land, showing them how to set rabbit snares and live off the land. Everything the youth caught was brought back to the community and shared with the elders, which gave the youngsters a great sense of pride and accomplishment.

“With the Dene people, the youth and elders spend as much time together as possible. The kids learn a lot from the elders, who have a lifetime of knowledge,” says Drygeese.

“We are so proud to be a part of the memories made, and we can’t wait to do it all again,” says Biscaye.

“The handgames are great for everyone. It’s a great way for the community to get together, celebrate our heritage and watch the youth have fun.” – Bobby Drygeese

21

2009 Employment Data

The past year has been a difficult one for economies throughout the world, and indeed, throughout Canada. The recession that began to surface midway through 2008 quickly drained economies around the world of billions of dollars in wealth. Job losses in North American, European and Asian markets reached epic proportions, individual and corporate financial security vanished and consumer confidence sank to historic lows. World demand for luxury items, which is so critical to the NWT economy, and our business, plummeted.

By December of 2008, we had announced the first of what would become two rounds of downsizing at our Snap Lake Diamond Mine in an effort to slow production to a pace in line with the shrinking world demand for diamonds. In the first round, 105 people lost their jobs, all of whom were working for a KeTe Whii Procon providing underground mining services. The majority of these employees were non-NWT residents. A second round of downsizing followed two months later. This round of cutbacks affected 128 of our own employees with another 90 contractor jobs being lost as contracts were suspended indefinitely. Many of the people who lost their jobs at that time were NWT residents. Finally, De Beers initiated a six-week shutdown of its operations beginning in July that affected all remaining production staff. A small workforce carried out care and maintenance procedures at the mine site during that time, ensuring we kept our environment commitments.

“The world economy remained on shaky ground for the remainder of 2009, and even in early 2010 economic growth has been slow, “ said Brad Corrigan, Mine General Manager. “The good news is that as we write this report, there are signs of recovery. Jobs, capital markets, and consumer confidence are trending upwards.”

These improving conditions have given us the confidence to increase production to a level near full production at our Snap Lake Mine and this ramp up is occurring over the next two years. In December 2009, we announced we would be hiring 175 people beginning in January 2010. This hiring is now underway.

This announcement will bring growth to the Territory’s job market in 2010, but will not change the results from 2009. The employment data from 2009 speaks to what was a very difficult period for our employees and contractors working at the Snap Lake Mine. The overall workforce, measured in terms of full-time equivalence also described as person-years of employment, was 431 in 2009. It was 728 in 2008.

The economic difficulties in 2009 have not altered De Beers’ commitment to employing NWT residents. Efforts to increase the share of resident workers to 60 per cent of the total labour force continued throughout the year despite the setbacks. The commitment to hire residents extends to our contractors and their sub-contractors.

Based on the projected labour requirements established in the Project’s Environmental Assessment Statement, the 60 per cent NWT Residency target equates to 300 full-time equivalent jobs based on employment of 500. In absolute terms, the number of NWT residents working at the Snap Lake Mine finished the year at 162 person-years which represents 38 per cent of the year’s workforce. Of these workers, 69 (43 per cent) were in management, professional or skilled positions.

De Beers is confident that over the life of the project, our employment commitments will be realised.1 The NWT labour market softened over the course of the year with setbacks coming at other mining operations and in mineral exploration. This should provide an opportunity for increased NWT resident hiring in 2010. Unfortunately, the economic downturn did not help the Territory’s efforts to limit out migration. By the end of the third quarter of 2009, the NWT had lost 587 people through migration. The consistency in which the Territory loses residents to other regions of the country hinders any real growth in the resident labour pool. Also impacting the labour market are increased employment plans elsewhere in the NWT economy, with Rio Tinto announcing a hiring campaign similar in size to that of De Beers for 2010. This adds to De Beers’ challenges to hire locally, but should be considered a very positive development for NWT’s labour market and the economy as a whole.

1. See Section 3.4.2 in the Snap Lake Socio-Economic Agreement.

Achieving this 60 per cent target is subject to the availability of

persons in the priority groups with the required skills, training and

experience.


Employment by hiring priority

Table 1: Employment by to the end of 2009

2005 2006 2007 2008 2009 Total Average(person-years)

NWT Aboriginal 38.8 93.4 126.0 139.0 92.0 489.2 97.8

Other NWT Residents 55.9 130.0 143.0 135.0 70.5 534.4 106.9

Subtotal NWT Residents 94.7 223.4 269.0 274.0 162.5 1023.6 204.7

Non-NWT 136.7 614.3 875.0 454.0 268.7 2348.7 469.7

Grand Total 231.4 837.7 1144.0 728.0 431.2 3372.3 674.5

(person-years)NWT Aboriginal 17% 11% 11% 19% 21% 15% 15%

Other NWT Residents 24% 16% 13% 19% 16% 16% 16%

Subtotal NWT Residents 41% 27% 24% 38% 38% 30% 30%

Non-NWT 59% 73% 76% 62% 62% 70% 70%

Grand Total 100% 100% 100% 100% 100% 100% 100%

Those that did not self identify in the survey are recorded as non-Aboriginal. NWT Aboriginal employees who were identified as residing

outside the NWT are recorded as Non-NWT Aboriginal Residents in this table. Figures may not add up due to rounding error.

Table 1 presents employment in person-years2 by hiring priority from 2005 to 2009 for the Snap Lake Mine. The initial three years of data represent the employment performance during the construction phase of the project. Operations began in 2008. Employment for that year totalled 728 person-years. Two rounds of cutbacks that totalled 323 employees coupled with a six-week shutdown through the summer lowered the number of person-years of employment for 2009 to 431. This is the first time in the five-year history of the project that the number of NWT resident workers has declined.

The contribution of Aboriginal residents to the labour requirements of the project fell by 47 in 2009 from its peak in 2008 of 139. Cutbacks to other NWT resident employees

were greater, with employment falling by 65. The largest employment losses in both absolute and relative terms were felt by non-NWT residents who saw their participation at the mine site fall by 185 person-years, equal to a 41 per cent decline.

Combined, NWT residents provided 162 person-years of employment to the project. This falls short of the original target of 300 which is based on operating at full production. One can also see from the table that the relative contribution of NWT residents did not change from one year earlier. Despite the economic challenges of 2009, the company remains committed to reaching its NWT employment targets in the operations phase of the project.

2. In 2009, it was expected that over a full year, an employee would

work 13 cycles of 14 days with a day equalling a 12 hour shift. This

represents 2,184 hours per year or an average of 182 hours per

month. Therefore, estimating number of jobs in terms of person

years requires summing the total number of hours worked by all

employees and dividing that number by 2,184.

Hiring Priority

23

Additional details on the employment results from 2009 are provided in Table 2. Specifically, these data reveal the employment record of De Beers and its contractors with respect to hiring priority. De Beers’ employees now outnumber that of contractors with 67 per cent of the workforce being De Beers’ payroll. De Beers’ contractors

Table 2: Employment by Hiring Priority, 2009

DeBeers Contractor Total (person-years)

NWT Aboriginal 44.8 47.2 92.0

Other NWT Residents 54.3 16.2 70.5

SubtotalNWTResidents 99.0 63.4 162.5

Non-NWT Aboriginal 25.6 7.8 33.4

Other Non-NWT Residents 162.7 72.6 235.4

SubtotalNon-NWTResidents 188.3 80.5 268.7

Total 287.3 143.9 431.2

(percentoftotal)NWT Aboriginal 16% 33% 21%

Other NWT Residents 19% 11% 16%

SubtotalNWTResidents 34% 44% 38%

Non-NWT Aboriginal 9% 5% 8%

Other Non-NWT Residents 57% 50% 55%

SubtotalNWTResidents 66% 56% 62%

Total 100% 100% 100%

Note: Those that did not self identify in the survey are recorded as non-Aboriginal. NWT Aboriginal

employees who were identified as residing outside the NWT are recorded as Non-NWT Aboriginal

Residents in this table. Figures may not add up due to rounding error.

employed 144 people in person-year terms of which 63 reside in the NWT. The table also shows that the majority of workers are non-NWT residents at 62 per cent. The total Aboriginal contribution to the project’s labour force equalled 29 per cent, of which 21 per cent represent a First Nation or Aboriginal group from within the NWT. 3


Employment by hiring priority and job classification

NWT Residents38%

Non-NWT Residents62%

Table 3 presents employment results from 2009 by hiring priority and job classification. The highest paying positions within the Project are the jobs classified as management, professional and skilled. Eight of the 17 management positions, 8 of the 20 professional positions, and 53 of the 191 skilled positions were filled by NWT residents – 49 per cent, 37 per cent, and 28 per cent respectively.

This is an improvement over last year in each category. NWT residents as a whole made up 82 per cent of the 30 unskilled jobs and 40 per cent of the 173 semi-skilled jobs. Increasing the number and percentage of resident managers, professionals and skilled employees through promotion and resident hires remains an important objective for De Beers.

Employee breakdown – 2009 NWT Resident and Non – Resident

Table 3 (a): Employment by Hiring Priority and Job Classification, 2009

NWT Other SubtotalNWT Non-NWT GrandAboriginal NWTResidents Residents Residents Total

(person-years)Management 1.6 6.9 8.5 8.7 17.1Professional 0.9 6.7 7.5 12.8 20.3Skilled 20.8 32.3 53.1 138.1 191.2Subtotal 23.3 45.9 69.1 159.5 228.6Semi-Skilled 47.5 21.5 69.0 103.9 172.9Unskilled 21.3 3.1 24.4 5.3 29.7Subtotal 68.7 24.6 93.3 109.1 202.6Total 92.0 70.5 162.5 268.7 431.2

Per cent of total by job classificationManagement 9% 40% 49% 51% 100%Professional 4% 33% 37% 63% 100%Skilled 11% 17% 28% 72% 100%Subtotal 10% 20% 30% 70% 100%Semi-Skilled 27% 12% 40% 60% 100%Unskilled 72% 11% 82% 18% 100%Subtotal 34% 12% 46% 54% 100%Total 21% 16% 38% 62% 100%

Per cent of total by hiring priorityManagement 2% 10% 5% 3% 4%Professional 1% 9% 5% 5% 5%Skilled 23% 46% 33% 51% 44%Subtotal 25% 65% 43% 59% 53%Semi-Skilled 52% 31% 42% 39% 40%Unskilled 23% 4% 15% 2% 7%Subtotal 75% 35% 57% 41% 47%Total 100% 100% 100% 100% 100%

Note: Those that did not self identify in the survey are recorded as non-Aboriginal. NWT Aboriginal employees

who were identified as residing outside the NWT are recorded as Non-NWT Aboriginal Residents in this table.

Figures may not add up due to rounding error.

25

Aboriginal

Other

Num

ber o

f FTE

jobs

0

25

50

75

100

125

150

175

200

UnskilledSemi-Skilled

SkilledProfessional

Management

Table 3(b): Aboriginal Employment by Hiring Priority and Job Classification, 2009

NWT Non-NWT Total OtherNWT OtherNon-NWT GrandAboriginal Aboriginal Aboriginal Residents Residents Total

(person-years)Management 1.6 0.9 2.4 6.9 7.8 17.1Professional 0.9 0.0 0.9 6.7 12.8 20.3Skilled 20.8 6.6 27.4 32.3 131.5 191.2Subtotal 23.3 7.4 30.7 45.9 152.1 228.6Semi-Skilled 47.5 16.5 63.9 21.5 87.4 172.9Unskilled 21.3 3.2 24.5 3.1 2.1 29.7Subtotal 68.7 19.7 88.4 24.6 89.6 202.6Total 92.0 27.1 119.1 70.5 241.7 431.2

Classification and Hiring Priority (Aboriginal Status)Management 9% 5% 14% 40% 46% 100%Professional 4% 0% 4% 33% 63% 100%Skilled 11% 3% 14% 17% 69% 100%Subtotal 10% 3% 13% 20% 67% 100%Semi-Skilled 27% 10% 37% 12% 51% 100% Unskilled 72% 11% 82% 11% 7% 100%Subtotal 34% 10% 44% 12% 44% 100%Total 21% 6% 28% 16% 56% 100%

Per cent of total by hiring priorityManagement 2% 3% 2% 10% 3% 4%Professional 1% 0% 1% 9% 5% 5%Skilled 23% 24% 23% 46% 54% 44%Subtotal 25% 27% 26% 65% 63% 53%Semi-Skilled 52% 61% 54% 31% 36% 40%Unskilled 23% 12% 21% 4% 1% 7%Subtotal 75% 73% 74% 35% 37% 47%Total 100% 100% 100% 100% 100% 100%

3.The Employment Statistical Information (ESI) Form used to collect employee and contractor information on residency, heritage, gender and

job category results in data which can require some explanation and interpretation. Aboriginal employees can record their status in one of

three categories within the survey: Impact Benefit Agreement (IBA) Group, NWT Aboriginal or Other Aboriginal. “NWT Aboriginal” is defined

in the survey as Any Indian, Inuit or Metis individual who originated in the NWT or is a descendant of an Aboriginal person originating in the

NWT. De Beers assumes that this will capture every employee who represents any other Aboriginal community in the NWT regardless of their

residency. De Beers assumes that “Other Aboriginal” captures all other Aboriginal people. Finally, it is important to note that someone who

identifies themselves as part of an IBA group or another NWT Aboriginal group may not always reside in the NWT. Heritage and residency

are mutually exclusive. Those who self identify as a member of the North Slave Métis Alliance, Yellowknives Dene First Nation, Lutsel K’e and

Kache Dene First Nation or Tlicho Nation and that also indicate they live outside of the NWT are still considered by De Beers to be within the

first hiring priority. This is in accordance with terms within Impact Benefit Agreements, which supersede the hiring priorities of the Socio

Economic Agreement. Also, a number of individuals choose not to self-identify themselves by their heritage or location. These individuals are

recorded as non-Aboriginal, non-NWT residents.

NWT Residency Employment by Job Category (Person Years)

Aboriginal Employment by Job Category (Person Years)

Non-NWT Residents

NWT Residents

Num

ber o

f FTE

jobs

0

25

50

75

100

125

150

175

200

UnskilledSemi-Skilled

SkilledProfessional

Management

Note: Those that did not self identify in the survey are recorded as non-Aboriginal. NWT Aboriginal employees

who were identified as residing outside the NWT are recorded as Non-NWT Aboriginal Residents in this table.

Figures may not add up due to rounding error.


Employment by communityThe employment data by NWT community is presented in Table 4. This data is recorded as the number of person-years of employment and as the average number of active employees. With the downsizing of the Snap Lake Mine’s workforce, De Beers’ focus was to limit to the extent possible laying off employees within priority groups established in the Snap Lake Socio-Economic Agreement. 4

The order of hiring priority is as follows:

1. Members of Aboriginal Authorities, including

a. Lutsel K’e and Kache Dene First Nation;

b. North Slave Métis Alliance;

c. Tlicho government,

d. Yellowknives Dene First Nation.

2. Aboriginal people residing in the NWT;

3. NWT residents who have been continuously resident in the NWT for at least six months;

4. All others residing in or relocating to the NWT; and,

5. Others (non-NWT residents).

Over the course of 2009, 16 NWT communities were represented in the workforce at Snap Lake Mine. Most of these workers resided in Yellowknife, accounting for 26 per cent of the 431.2 person-years of total employment. The Town of Hay River contributed 17.5 person-years (4 per cent of total employment), while Behchoko added another 14.2 person years (3 per cent of total employment) to the mine.

Table 4: Employment by NWT Community

Community PersonYears PercentageofPersonYears

Behchoko 14.2 3%

Deline 0.6 0%

Enterprise 1.1 0%

Fort McPherson 0.7 0%

Fort Providence 0.4 0%

Fort Resolution 2.5 1%

Fort Simpson 1.3 0%

Fort Smith 8.1 2%

Gameti 1.0 0%

Hay River 17.5 4%

Inuvik 0.7 0%

Lutsel K’e 1.4 0%

Tulita 1.1 0%

Wekweeti 0.1 0%

Whati 2.5 1%

Yellowknife 110.2 26%

Other 267.9 62%

Total 431.2 100%

Note: figures may not add up due to rounding error.

4.See Section 3.2 in the Snap Lake Socio-Economic Agreement.

27

New hires by residencyTable 5 presents the number of new hires by residency separated between employees of De Beers and its contractors. The data in this table is not in person-years, but, rather, by number of individuals hired. During 2009, De Beers and its contractors hired 213 new workers. The number is much lower than previous years due to the cutbacks in the first half of the year, and because

previous years were primarily driving construction and commissioning where a variety of hiring takes place to bring in specialized skills. De Beers’ new hires totalled 51; of that 41 per cent were NWT residents. De Beers’ contractors’ new hires totalled 162, of which 57 per cent were NWT residents. The contractor doing the most hiring for the year was Tli Cho Logistics. It hired 121 employees over the course of the year. Ek’Ati Services Ltd. was another contractor that recruited several new hires in 2009 adding 23 new employees.

Table 5: New Hires by Residency

>6Months <6Months NWT Non-NWT TotalNumberofNewEmployeesDe Beers Canada Inc. 9 12 21 30 51

Contractors 53 39 92 70 162

Total 62 51 113 100 213

PercentofTotalDe Beers Canada Inc. 18% 24% 41% 59% 100%

Contractors 33% 24% 57% 43% 100%

Total 29% 24% 53% 47% 100%


De Beers Canada Inc. supports and encourages the participation of women in all aspects of work related to the Snap Lake Mine. De Beers encourages similar commitments from its contractors.5 Table 6 and Table 7 provide evidence of De Beers’ record in this area. The overall workforce is dominated by men at 86 per cent.

Table 6: Employment by Job Classification and Gender

Men Women Total

(person-years) (percent) (person-years) (percent) (person-years)(percent)

Management 14.1 83% 3.0 17% 17.1 100%

Professional 18.7 92% 1.7 8% 20.3 100%

Skilled 176.5 92% 14.7 8% 191.2 100%

Subtotal 209.3 92% 19.3 8% 228.6 100%

Semi-Skilled 148.0 86% 24.9 14% 172.9 100%

Unskilled 14.0 47% 15.7 53% 29.7 100%

Subtotal 161.9 80% 40.7 20% 202.6 100%

GrandTotal 371.2 86% 60.0 14% 431.2 100%


Employment by gender and job classificationThere were 60 women employed at the Snap Lake Mine in 2009. In percentage terms, it is the unskilled positions where women are more significantly represented, holding 53 per cent of jobs in that category. In other categories, percentages of women is much lower. Women fill 8 per cent of management, professional, and skilled positions when combined and 14 per cent of semi-skilled positions.

5. See Section 4.10 in the Snap Lake Socio-Economic Agreement.

Table 7: Employment by Job Classification for Women

(person-years) (percent)

Management 3.0 5%

Professional 1.7 3%

Skilled 14.7 24%

Subtotal 19.3 32%

Semi-Skilled 24.9 42%

Unskilled 15.7 26%

Subtotal 40.7 68%

GrandTotal 60.0 100%


29

NWT survey of mine employees

6. NWT Bureau of Statistics, 2009 NWT Survey of Mine Employees:

Report to De Beers, August 2009.

The NWT Bureau of Statistics conducted a comprehensive survey of diamond mine employees in the spring of 2009 on behalf of De Beers Canada Inc., Rio Tinto, BHP Billiton and the Government of the NWT. The survey was one of three initiatives undertaken by the three mines and the GNWT under an MOU to develop a northern work force. It focused on things diamond mine employees like and dislike about their current community of residence, factors they consider when thinking about relocation and barriers to moving to the Northwest Territories.6

The results from those surveyed were separated into four categories according to their residency status—NWT residents who are from the NWT, NWT residents who moved to the Territory, non-NWT residents who have previously lived in the NWT, and non-NWT residents who have never lived in the Territory.

The results of this survey were very much in line with what De Beers has learned about its workforce through our efforts to attract people to our mine and the Territory during the past five years of construction and operations. Perhaps most interesting were the results that showed 44.6 per cent of NWT resident mine workers (equal to 443 respondents) stated they were likely or very likely to leave the Territory in the next year should an opportunity to do so arise. A majority (64.3 per cent) of these people cited the cost of living as the number one factor. Other prominent considerations included wanting a change, the weather, and a desire to be closer to family. Other important highlights from the survey are noted below:

• NWT resident mine workers are, on average, younger and more mobile than non-NWT resident workers;

• many of the differences and issues related to mobility between NWT and non-NWT resident mine workers are a function of this age difference (for example, age is correlated with family conditions—younger workers are more likely to be single, married without children, or married with young children, they are also less likely to be tied down by financial obligations, and thus find it easier to move);

• closeness to family and friends is the most critical factor in considering one’s residency, following by financial consideration such as cost of living, cost of housing, etc.;

• with increased education comes greater mobility and increased interest in the intrinsic benefits to relocating such as recreational opportunities;

• those who lived in the NWT and have moved away are more likely to return than those who have never lived in the Territory;

• of those who are contemplating relocation to the NWT,

— most like that they would be closer to their work, but dislike what the move might mean for their financial position,

— the most prominent concerns of these potential residents include distance from family and friends, cost of living, and employment opportunities for their spouse;

• of those non-residents not considering relocation, the main reasons cited included that they like their home community and were concerned with the cost of living in the NWT and the length of winters.

In addition to the overall results from the survey, De Beers was provided with the results from the Snap Lake Mine workforce. There is little difference between this subset and the overall survey results. A slight discrepancy exists in the age profile of De Beers’ workforce when compared to that of the Ekati and Diavik diamond mines. The Snap Lake Mine employs a greater percentage of people under the age of 25 (8.8 per cent compared to 4.6 per cent at the other mines). Snap Lake Mine workers also have less experience working for a northern mine than those working at the Ekati or Diavik diamond mines (19.8 per cent of Snap Lake’s workforce has 5 years experience or more compared to 58.2 per cent at the other mines). This seems logical given De Beers’ mine had been operating for less than 18 months at the time of the survey. Looking at the entire workforce at the Snap Lake Mine, their responses to questions about relocating in the next year were identical to the survey average, however Snap Lake employees residing in the NWT were more likely to leave than other NWT residents working at one of the other mines (53.8 per cent compared to 44.1 per cent respectively). This deviation is likely the result of employing a higher percentage of young people and newcomers to the industry—both factors are correlated with increased mobility.

Semi-Skilled 42%

Skilled 24%

Management 5%

Professional 3%

Unskilled 26%

Employment of Women by Job Classification

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