Dominion Diamond Corporation Reports Fiscal 2017 First Quarter Sales and Ekati Production Results
May 25 2016 - 4:30PM
Business Wire
Dominion Diamond Corporation (TSX: DDC, NYSE: DDC) (the
“Company” or “Dominion”) reports Ekati Diamond Mine and Diavik
Diamond Mine first fiscal quarter 2017 (February through April)
sales and Ekati Diamond Mine production results. Unless otherwise
specified, all financial information is presented in U.S.
dollars.
Highlights
- Sales:
- First quarter diamond sales were $178.3
million ($187.7 million in Q1 2016).
- Ekati Production:
- During Q1 fiscal 2017, the Ekati
Diamond Mine recovered 1.1 million carats from 1.0 million tonnes
of ore processed (Q1 2016 – 0.8 million carats recovered from 0.9
million tonnes processed).
- During the quarter, tonnage processed
was 6% ahead of plan although recovered grade was below modelled
grade for Misery and Pigeon ore due to dilution of initial material
processed.
- Subsequent to quarter end, Misery Main
commercial production was declared, ahead of plan.
SalesEkati and Diavik
Rough Diamond SalesThe Company recorded total first quarter
sales of $178.3 million ($187.7 million in Q1 fiscal 2016). Two
rough diamond sales were held during the quarter. After lowering
prices by 5% in the Company’s January sale, in line with the
market, prices quickly recovered and ended the first quarter on
average approximately 8% higher than they started the fiscal year.
The Company plans to hold three rough diamond sales in the second
fiscal quarter of 2017.
Q1 FY 2017 Summary
Sales in millions of US dollars
Three months ended
Apr 30, 2016
Three months ended
Apr 30, 2015
Ekati Rough (100% basis) $105.1 $127.4 Diavik Rough (40% basis) $
73.1 $60.3
Total Sales $ 178.3 $187.7
Carats Sold (000s)
Ekati Rough (100% basis) 1,545 710 Diavik Rough (40% basis) 1,055
544
Total Carats Sold 2,600 1,254
The Diamond MarketMarket
conditions in the rough diamond market during the first quarter
improved significantly as inventories were replenished by
manufacturers in response to a positive retail season at the end of
2015. Consequently the downward pressures on prices faced last year
were reversed which bodes well for more stable market conditions in
fiscal 2017. The U.S. jewelry market was at the forefront of demand
growth during the period and, despite the impact of uncertain
economic growth on sentiment, sales in mainland China remained
reasonably steady, conversely the Hong Kong and Macau markets faced
considerable headwinds. Other major retail markets were mixed with
some more resilient in local currency terms but adversely impacted
by the strong U.S. Dollar.
Ekati Production
- The first quarter continued the
positive momentum from the fourth quarter performing better than
expected on tonnage which resulted from strong performance from
both underground and open pit operations.
- Carat production in the first quarter
was 34% higher versus Q1 2016. During the period, the Ekati Diamond
Mine recovered 1.1 million carats from 1.0 million tonnes of ore
processed (0.8 million carats from 0.9 million tonnes in Q1
2016).
- Ore mined from the Pigeon and Misery
Main pipes totaled 1.0 million tonnes.
- Approximately 0.7 million tonnes of
Pigeon ore remained in stockpiles at the end of the first quarter
and is expected to be processed throughout the rest of fiscal 2017,
permitting greater flexibility in ore blend.
- During the quarter the Company
continued to process significant amounts of low value Misery
Satellites material.
- Commercial production for Misery Main
was declared in May ahead of plan. This initial Misery Main ore
will be lower grade as a result of dilution from the mining of
preceding benches.
Ekati Diamond Mine Production (100%
basis)For the three months ended Apr 30, 2016
For the three months ended Apr 30, 2015 Pipe Ore
Processed(000s tonnes) Carats(1)(000s)
Grade(1)(carats/tonne) Ore Processed(000s tonnes)
Carats(1)(000s) Grade(1)(carats/tonne) Misery Main
75
204 2.72 - - - Pigeon
248 109
0.44 - - - Fox
- - - 1 0.2 0.25 Koala
314 197 0.63 228 222 0.97 Koala North
-
- - 53 30 0.57 Misery Satellites
335
566 1.69 243 340 1.40 Coarse Ore Rejects(“COR”)
- - - 327 212 0.65 Total
972
1,076 1.11 851 804 0.94
(1) As different ore sources are blended
during processing, carats and grade per pipe are estimated using
the block models for the ore processed from each pipe, adjusted for
the overall reconciliation of total carats recovered against the
model. The total carats produced include all incremental production
arising as a result of the changes made to the Ekati process plant
to improve diamond liberation.
Diavik ProductionThe Diavik
Diamond Mine production results for the first calendar quarter of
2016 were released on April 18, 2016. Diavik reports to the
calendar year ending December 31, and Ekati reports to the fiscal
year ending January 31. The Company does not report Diavik fiscal
production results.
Cautionary Statement Regarding Preliminary ResultsThe
Company cautions that the Company’s first quarter sales results
disclosed in this news release are preliminary and reflect
expectations 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.
Forward-Looking InformationCertain information included
herein, including information about mining activities and estimated
production from the Ekati 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; mining, production,
construction and exploration activities at the Company’s mining
properties; currency exchange rates; world and US economic
conditions; future diamond prices; and the level of worldwide
diamond production. 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.
About Dominion Diamond CorporationDominion Diamond
Corporation is the world’s third largest producer of rough diamonds
by value. Both of its production assets are located in the low
political risk environment of the Northwest Territories in Canada
where the Company also has its head office. The Company is well
capitalized and has a strong balance sheet.
The Company operates the Ekati Diamond Mine and also owns 40% of
the Diavik Diamond Mine. Between the two mining operations,
diamonds are currently produced from a number of separate
kimberlite pipes providing a diversity of diamond supply as well as
reduced operational risk. It supplies premium rough diamond
assortments to the global market through its sorting and selling
operations in Canada, Belgium and India.
For more information, please visit
www.ddcorp.ca
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version on businesswire.com: http://www.businesswire.com/news/home/20160525006516/en/
Dominion Diamond CorporationMs. Kelley Stamm,
416-205-4380Manager, Investor Relationskstamm@ddcorp.ca