Kim Truter, CEO of De Beers Canada, said the company will evaluate market conditions over the next year to determine if the underground mine is financially viable.
"The men and women at Snap Lake have put enormous effort into this challenging ore body over many years, but even the gains made this year are not enough to overcome the market conditions and put us in a profitable position," Truter said in a news release Friday.
De Beers said some employees will be required in the coming months to prepare the mine for a lengthy suspension.
Truter said 434 employees have been notified that they aren’t required for the closure and maintenance work.
N.W.T. Premier Bob McLeod said the announcement by De Beers will have a significant impact on the region’s economy.
"Our priority is the individuals and their families who are directly affected by this decision and the impacts that this decision will have on N.W.T. business owners and our communities," he said.
McLeod said about 300 people who work at the mine about 220 kilometres northeast of Yellowknife live in the territory. The others fly in from other parts of Canada.
He said De Beers Canada has spent $1.5 billion with N.W.T. companies over the years, including $865 million with aboriginal firms and joint ventures.
"These are not amounts that are easily replaced," he said.
McLeod said he hoped the closure of the mine is temporary and noted that De Beers is involved in another mine called the Gacho Kue project that is almost complete.