Socioeconomic Impacts and Assessment Presented by: Robert Hornal, Robert Hornal & Associates

1. Socioeconomic Impacts and Assessment • Presented by: Robert Hornal, • Robert Hornal & Associates

2. The Presentation • Two key areas: • Assessment and Impacts • Inuit Impact Benefits Agreement

3. The Socioeconomic Assessment • Collected statistical data from all Kitikmeot Communities • Reviewed notes from Tahera’s meetings with the communities since 1996 • Reviewed Tahera’s project description • Assessed the economic consequences of the project using the Diavik model

4. The Socioeconomic Assessment • The Jericho Project is a small mining project • It will generate an average of 97 person years of employment for nine years • The total work force will vary from 179 to 57

5. Projected Workforce By Year

6. The Socioeconomic Assessment • 36% of the construction costs will be spent in the North • 43% of the operating costs will be spent in the North including 65% of the salary dollars

7. Construction Costs(millions of dollars)

8. Operating Costs 2006(millions of dollars)

9. Why Socioeconomic Analysis? • Kitikmeot residents want improvements to their quality of life through the creation of jobs, long term employment, training and educational opportunities, business opportunities and improved community well being. • These improvements must come with no loss to the land and resources that have sustained the communitiesover time.

10. Benefits To Kitikmeot • Jobs • Training • Contracts • Inuit Impact Benefits Agreement

11. Impacts: • Employment-Moderately Positive • Training-Moderately Positive • Business Opportunities-Moderately Positive • Community Health –Moderate • Crime-Moderately Negative • Demographics- Minor if at all

12. Tahera’s Commitments • Will strive to reach a goal of 60% Inuit employment within 5 years • Will encourage contractors to meet same Inuit employment standards • Will transport Inuit employees directly from their home communities to the mine site • Will set up a monitoring committee to work with the communities to mitigate negative impacts and maximize positive impacts

13. Inuit Impact Benefit Agreement (IIBA) • Negotiations conducted between Tahera and a KIA appointed negotiating committee • An agreement in principle was reached for the IIBA in early December 2003 • Agreement in principle has been approved by the KIA Board of Directors • KIA will be presenting IIBA to Kitikmeot communities

14. Inuit Impact Benefit Agreement (IIBA) – General Provisions • Mitigation of socio-economic impacts • Commitment to training, education, employment and business opportunities • Compensation • For implementation, land access and potential impact on Inuit Water Rights • Monitoring Measures • Establishes implementation committee

15. Summary • The Jericho Diamond Project will impact the Kitikmeot communities but with the proposed mitigative measures and the IIBA these impacts will likely to be positive and there will be in place mechanisms to monitor and adjust these impacts.