Strategic stockpiling is very key in mine operations.

When a mine becomes operational, the concept of strategic stockpiling is all about money.
Most of the time, the low grade (or marginal material) is stockpiled for later use when the mill isn't quite being fed by the regular ore. Low grade material usually needs to be extracted to be able to access the regular ore, so it is a question of the cost of re-handling it to mill it at a later date and this marginal material stays in the low grade stockpile for further milling. Ideally, the concept of just in time mill feed, with a small buffer is preferred as re-handling of material is reduced to a minimum.

When does this scenario of just in time milling not quite work?

There are probably several scenarios where just in time milling does not quite work and in the case of Chidliak, the answer lies in the material difference in value of the kimberlite material.

In most mining scenarios, the difference between low grade, medium grade and high grade is still within a single or double digit difference (%). With Chidliak, there are not only different kimberlite pipes that host various values and qualities, but also different domains or kimberlite domains within the pipes.

The sizing of the mill is critical. The small mill size, the smaller capital cost at the cost of smaller throughput. A larger mill size, a larger capital cost at the cost of trying to feed the hungry mill throughout the life of mine.  As it stands, the current PEA (preliminary economic assessment) has a reasonable (maybe smallish) mill size. The goal of a smaller mill is to put as much high value material in it in the early years and when that material runs out, put some lower value material in it.

Both Ekati and Diavik are waging a war right now on trying to get the highest value tonnage through their mills with mixed success. 

Why is this important to Chidliak and what might happen in a production scenario?

It is important to get the highest value and quickest payback for the project to generate a high NPV. Does it make sense to purposely set aside some highly valued material in favour of even higher value material? The answer to that is quite simply yes. It is fairly cut and dry with Chidliak. A look at the material differences tells all.

Material A -- The irregular cylindrical pipe through the middle of CH-6 -- estimated value ~CAD$1,000 per tonne. 
Material B -- Regular material of CH-6 -- estimated value ~CAD$500 per tonne
Material C -- sub-domain of CH-6 (not officially valued yet) -- estimated value ~CAD$200 per tonne
Material D - first string of pearl pipe to be mined within CH-6 pit wall -- (not officially valued yet -- ~CAD$200 per tonne

Material C and D are yet to be officially valued. It is not unreasonable to suggest that these will be close in value. Material A and B are quite different in value and also quite different from C and by a big stretch as well. These big differences are what make stockpiling make sense.

On the underground side, it is quite easily to try to isolate these different materials and mine selectively and maybe reduce the need for stockpiling. 
On the open pit side (which is going to be first), there are those that say the material B cannot be mined effectively separate from material A. If one can mine material A and have a bit of material B mixture in it, that is still CAD$900 per tonne material. Try to isolate the materials in an open pit scenario on a best efforts basis and the economics will benefit significantly.

Material A will go direct to the mill. If the mill is down for maintenance or such, the material can go into a priority A stockpile (highest priority).

Material B will go direct to the mill if there is room  and if not, it will go direct into a second priority B stockpile. 

Material C and D will go directly into a third priority stockpile and will sit there and will only be fed into the mill when there is space available.

What is the cost of having this material sit in a stockpile?
The cost of blasting and moving a tonne material at Chidliak is around CAD$4 per tonne, so it is safe to assume a re-handling cost of CAD$4 per tonne of ore is a conservative number. Reality, this number should be lower.  
The cost of moving a tonne of material C and D is CAD$4 per tonne for the ore plus the strip ratio of 10:1, another CAD$40 per tonne in waste and then another CAD$4 for re-handling. The cost is then CAD$48 or ~CAD$50 per tonne. Some of this material may stay in a stockpile for a long time. If we assume 7 years and a discount rate of 10%..then that material is going to cost CAD$100 per tonne by the time it hits the mill. Again, pretty aggressive. So, more likely CAD$60 to CAD$70. Assume CAD$65 per tonne. 

What is gained? If the mill is limited by throughput, then pushing material of CAD$500 per tonne through the mill and defer material of CAD$200 per tonne indefinitely at a cost of CAD$65 per tonne. That is a margin difference of CAD$300..which is significantly higher then CAD$54 per tonne and it clearly highlights the advantage to stockpiling in this case. It works because the difference in value is quite significant. Most mines operating today would think that stockpiling CAD$200 per tonne is crazy, but most mines do not have access to CAD$1K per tonne ore or even CAD$500 per tonne ore. Many don't even have access to CAD$200 per tonne ore.

How about the topography of Chidliak? Is it ideal for long time stockpiling?
The answer is quite simply yes. There really is no limit to how much quantity of stockpile that Chidliak can host. The lay of the land is perfect for an abundance of stockpiling.

The above information is strictly with CH-6, but it will still apply to the 5 domains within the second pipe in the mine plan (CH-7) and beyond that, as pipes come online, the same strategic stockpiling will be key. 

Once a final mill size is created, there may even be a positive outcome to start mining ahead of the mill actually being available for use. Normally you want to start mining with a small buffer heading into mill production, but not always. Chidliak has characteristics quite different from other mining operations and strategic stockpiling must be looked at in all phases of design, construction and operation.  

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