Dominion Diamond Corporation Reports First Quarter 2015 Sales And Production Update
The following excerpt is from the company's SEC filing
TORONTO, May 20, 2014 /CNW/ - Dominion Diamond Corporation (TSX: DDC,
NYSE: DDC) (the "Company") reports that rough diamond production, sales and pricing have all exceeded targets for the
first quarter of fiscal 2015 (February through April) to the extent that the estimated value of the Company's production at current
sales prices is ahead of expectation by approximately $100 million.
(1)The full year mine plan for the Fox pipe envisaged the processing of 1.7 million tonnes of mineral reserve producing 0.36 million carats at an average grade of 0.21 carats per tonne for fiscal 2015.
rom Koala Underground ("U/G") was approximately 85% from mineral reserves and 15% from inferred mineral resources. The full year mine plan for Koala U/G envisaged the processing of 0.87 million tonnes of mineral reserve producing 0.51 million carats at an average grade of 0.59 carats per tonne for fiscal 2015.
(a) Grade has been adjusted to exclude COR. COR is not included in the reserves and is therefore incremental production.
Ekati Mining Update
The decision in the autumn of 2013 to accelerate the mining capability in the Fox pipe has resulted in an additional approximately
100,000 tonnes of material being mined from the open pit ahead of the spring Freshet (snowmelt). This material was mined from a
section of the ramp which was in kimberlite but was not part of the original mine plan. Mining at the Fox pipe was completed last
The development at the 1810 level at Koala Underground was completed at
the end of February and production drilling commenced in March.
During the quarter, the Company tested a small kimberlite pipe within
the Misery pit to the northeast of the main ore body which has been excavated as part of the Misery pushback. As a result of a
bulk sample run on this material, approximately 30,000 tonnes of the Misery Northeast material has been stockpiled and will be
processed in the second quarter. The characteristics of the diamonds in the satellite pipe material appear to be very similar to
the diamonds from the Misery Main pipe.
Diavik Mining Update
Ore mined at the Diavik mine was 12% ahead of plan. This performance results from higher production from A-418 and A-154 South
due to favorable ground conditions and improved availability of equipment.
Ekati Processing Update
The Company estimates that process plant improvements to date have increased the recovered grade during the first quarter by approximately
15%. Most of this incremental recovery is in smaller diamonds not currently included in reserves. Historically, Ekati has bypassed
the recrush circuit in order to maximize process plant throughput and has not recovered the entrained diamonds within the coarse
fraction of the tail rejects. The recrush circuit will likely be re-established by year-end to further improve diamond recovery.
Once the process improvements have been substantially completed the Company intends to incorporate the higher recovery rate into
an updated reserves statement.
Diavik Processing Update
Ore processing was 18% ahead of plan predominately due to greater ore availability as a result of higher mining rates and improved
equipment availability, equipment efficiencies and utilization of the processing plant.
Excluded from the Ekati sales recorded in the first quarter were carats
produced and sold from the processing of satellite material from the Misery South and Southwest kimberlite pipes as this material
was excavated during the pre-stripping operations for the Misery Main pipe. During the first quarter, the Company sold an estimated
0.1 million carats of production from the Misery South & Southwest kimberlites for estimated proceeds of $6.9 million for an
average price per carat of $75, which includes the recovery of small diamonds.
At April 30, 2014, the Company had inventory with an estimated market value of approximately $285 million of which $65 million
represents discretionary inventory with the balance being work in progress.
Based on the average prices per carat achieved by the Company in the latest sale which was held at the end of April / beginning
of May 2014, the Company has modeled the approximate rough diamond price per carat for each of the Diavik and Ekati kimberlite
process plant feed types below. The Ekati prices do not reflect the increased recovery of small diamonds from the improvements
in processing so as to be consistent with the Company's current reserve estimates. The rough diamond price of the additional
recovered small diamonds at Ekati is estimated at between $70 and $100 per carat.
Jay Project Update
The winter drilling, environmental and engineering program has revealed conditions that will accommodate a simplified design for
the Jay Project allowing a reduced environmental footprint and a shortened construction timeline without sacrificing project economics.
Regulatory agencies have now been advised of the revised project design and it will form the basis of the Developer's Assessment
Report to be filed in September this year. It is this report that is the starting point for the Environmental Assessment.
Cautionary Statement Regarding Preliminary Results
The Company cautions that the Company's first quarter sales results disclosed in this news release are preliminary and reflect
expected first quarter sales results as of the date of this news release. Actual reported results are subject to final review and
may vary from what is currently expected because of a number of factors, including, without limitation, additional or revised information
and changes in accounting standards or policies or in how those standards are applied. In addition, the preliminary results contained
in this news release do not include all of the measures of financial performance that would be disclosed in the Company's interim
financial statements. The Company will provide additional financial information and related discussion and analysis about its first
quarter financial results when it reports those actual results.
Certain information included herein, including information about mining
activities and estimated production from the Ekati Diamond Mine and the Diavik Diamond Mine, constitutes forward-looking information
or statements within the meaning of applicable securities laws. Forward-looking information is based on certain factors and assumptions
including, among other things, the current mine plan for the Ekati Diamond Mine and the Diavik Diamond Mine; mining, production,
construction and exploration activities at the Company's mining properties; currency exchange rates; and world and US economic
conditions. Forward-looking information is subject to certain factors, including risks and uncertainties, which could cause actual
results to differ materially from what the Company currently expects. These factors include, among other things, the uncertain
nature of mining activities, including risks associated with underground construction and mining operations, risks associated with
joint venture operations, risks associated with the remote location of and harsh climate at the Company's mining properties, risks
resulting from the Eurozone financial crisis, risks associated with regulatory requirements, the risk of fluctuations in diamond
prices and changes in US and world economic conditions, the risk of fluctuations in the Canadian/US dollar exchange rate and cash
flow and liquidity risks. Actual results may vary from the forward-looking information. Readers are cautioned not to place undue
importance on forward-looking information, which speaks only as of the date of this disclosure, and should not rely upon this information
as of any other date. While the Company may elect to, it is under no obligation and does not undertake to, update or revise any
forward-looking information, whether as a result of new information, further events or otherwise at any particular time, except
as required by law. Additional information concerning factors that may cause actual results to materially differ from those in
such forward-looking statements is contained in the Company's filings with Canadian and United States securities regulatory authorities
and can be found at www.sedar.com and www.sec.gov, respectively.
The scientific and technical information contained in this press release has been prepared under the supervision of Mats Heimersson,
P. ENG, an employee of the Company and a Qualified Person within the meaning of National Instrument 43-101.
About Dominion Diamond Corporation
Dominion Diamond Corporation is a Canadian diamond mining company with ownership interests in two major producing
diamond mines. Both mines are located in the low political risk environment of the Northwest Territories in Canada.
The Company operates the Ekati Diamond Mine through its 80% ownership
as well as a 58.8% ownership in the surrounding areas containing additional resources, and also owns 40% of the Ekati Diamond
Mine. It supplies rough diamonds to the global market through its sorting and selling operations in Canada, Belgium and India and
is the world's fourth largest producer of rough diamonds by value.
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.
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Other recent filings from the company include the following:
Dominion Diamond Corporation Reports Diavik Diamond Mine Fourth Calendar Quarter Production - Jan. 20, 2015