YELLOWKNIFE, Nov. 20, 2014 /PRNewswire/ - Dominion Diamond
Corporation (TSX: DDC, NYSE: DDC) (the "Company" or "Dominion")
reports that the Ekati Diamond Mine and the Diavik Diamond Mine
performed exceptionally well in the third fiscal quarter of 2015
(August through October). Rough diamond production, sales and
pricing have all exceeded plan. Unless otherwise specified,
all financial information is presented in U.S. dollars.
Ekati Diamond Mine Production (100%
basis)
Consistent with the two previous quarters, diamond production at
the Ekati Diamond Mine continued to exceed plan, driven by both
higher than expected grades and operational improvements to the
processing plant.
For the three
months ended Oct 31, 2014 |
For the three
months ended Oct 31, 2013 |
Pipe |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Ore
Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Fox(1) |
291 |
88 |
0.30 |
773 |
215 |
0.28 |
Koala(2) |
282 |
353 |
1.25 |
160 |
146 |
0.91 |
Koala North |
68 |
57 |
0.83 |
61 |
43 |
0.70 |
Misery
Satellites(3) |
211 |
285 |
1.35 |
138 |
205 |
1.48 |
Coarse Ore
Rejects("COR")(4) |
290 |
192 |
0.66 |
-- |
-- |
-- |
Total(5) |
1,142 |
975 |
0.85 |
1,132 |
609 |
0.54 |
For the nine
months ended Oct 31, 2014 |
For the period from April 10, 2013, (date of acquisition)
to
Oct 31,2013 |
Pipe |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Fox(1) |
1,489 |
503 |
0.34 |
1,755 |
543 |
0.31 |
Koala(2) |
666 |
831 |
1.25 |
293 |
249 |
0.85 |
Koala North |
199 |
174 |
0.87 |
176 |
131 |
0.74 |
Misery
Satellites(3) |
452 |
582 |
1.29 |
178 |
243 |
1.37 |
COR(4) |
358 |
247 |
0.69 |
42 |
7 |
0.17 |
Total(5) |
3,164 |
2,337 |
0.74 |
2,444 |
1,173 |
0.48 |
(1) At the beginning of fiscal 2015,
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.
(2) At the beginning of fiscal 2015,
the full year mine plan for the Koala pipe 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.
(3)The Misery Satellites include the
Misery South and Southwest satellite pipes, which are inferred
resources, and Misery Northeast material. Approximately 37,000
tonnes of Northeast material was processed in the third fiscal
quarter, and approximately 114,000 tonnes of this material was
processed year-to-date for fiscal 2015 at an average grade of 0.83
carats per tonne. The Northeast material is not included in
the reserves or resources and is therefore incremental
production.
(4)This material is not included in
the reserves or resources and is therefore incremental
production.
(5) Figures may not add up due to
rounding.
Ekati Mining Update
Waste stripping at the Misery pipe progressed according to plan as
additional resources were allocated. Concurrently, stripping and
mining of COR was initiated ahead of the initial plan to provide
additional flexibility for blending at the process plant. At
the Pigeon pipe, this quarter saw the completion of the ring road,
the establishment of the waste stockpile area and the beginning of
overburden and waste stripping.
Underground production at both Koala and Koala
North was slightly ahead of plan for the quarter and development
activities at Koala North were completed in August according to
plan.
Ekati Processing Update
The Company estimates that process plant improvements implemented
over the last 13 months have increased the recovered grade by
approximately 15% during the nine month period ending October 31, 2014. The resulting additional
diamonds are not currently included in the reserves and the mine
plan. During the quarter, physical modifications to the plant were
substantially completed with commissioning expected to take place
before the fiscal year-end. Once the process improvements have been
completed, the Company intends to incorporate these higher recovery
rates into an updated reserve statement.
Diavik Diamond Mine Production (40%
basis)
The Diavik Diamond Mine continued to deliver a good performance for
the third consecutive quarter of fiscal 2015.
For the three
months ended Oct 31, 2014 |
For the three
months ended Oct 31, 2013 |
Pipe |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
A-154 South |
47 |
174 |
3.72 |
63 |
266 |
4.24 |
A-154 North |
86 |
174 |
2.03 |
70 |
152 |
2.19 |
A-418 |
74 |
235 |
3.17 |
77 |
274 |
3.52 |
COR |
-- |
6 |
-- |
1 |
34 |
-- |
Total(b) |
207 |
589 |
2.82(a) |
211 |
727 |
3.29 (a) |
For the nine months ended Oct
31, 2014 |
For the nine
months ended Oct 31, 2013 |
Pipe |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
Ore Processed
(000s tonnes) |
Carats
(000s) |
Grade
(carats/tonne) |
A-154 South |
159 |
592 |
3.72 |
175 |
740 |
4.23 |
A-154 North |
265 |
566 |
2.14 |
216 |
450 |
2.08 |
A-418 |
265 |
988 |
3.72 |
233 |
747 |
3.20 |
COR |
2 |
48 |
-- |
4 |
108 |
-- |
Total(b) |
691 |
2,194 |
3.11(a) |
628 |
2,045 |
3.10(a) |
(a)Grade has been adjusted to exclude
COR. COR is not included in the reserves and is therefore
incremental production.
(b)Figures may not add up due to rounding.
Diavik Mining Update
Ore mined at the Diavik Diamond Mine was 5% ahead of plan
for the three months ended October 31, 2014, and 12% ahead of
plan for the fiscal year to date. This performance results from
higher production from all three kimberlite pipes throughout the
year due to favorable ground conditions and improved availability
of equipment.
Diavik Processing Update
Ore processing was 5% ahead of plan for the three months
ended October 31, 2014 and 17% ahead of plan for the
fiscal year to date. This was 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. Carat production was 19% lower compared
to the same fiscal quarter of the prior year, primarily due to the
processing of a lower proportion of the higher grade A-154 South
ore.
Ekati and Diavik Rough Diamond
Sales
The Company recorded total third quarter sales of $222.3 million ($148.1
million in Q3 fiscal 2014).
Q3 FY 2015 Summary
Sales in millions of US dollars |
Three months ended
Oct 31, 2014 |
Nine months ended
Oct 31, 2014 |
Ekati Rough (100% basis) |
141.9 |
405.1 |
Diavik Rough (40% basis) |
80.4 |
270.1 |
Total Sales |
222.3 |
675.2 |
Carats Sold (000s) |
|
|
Ekati Rough (100% basis) |
458 |
1,269 |
Diavik Rough (40% basis) |
696 |
2,236 |
Total Carats Sold
(a) |
1,154 |
3,505 |
(a) Figures may not add up due to
rounding.
Excluded from the Ekati sales recorded in the
third quarter were carats produced and sold from the processing of
material from the Misery Satellite pipes. During the third quarter,
the Company sold an estimated 0.17 million carats of production
from the Misery Satellite pipes for estimated proceeds of
$13.6 million for an average price
per carat of $79, which includes the
recovery of small diamonds.
For the nine months ended October 31, 2014, the Company sold an estimated
0.40 million carats of production from the Misery Satellite pipes
for estimated proceeds of $31.0
million for an average price per carat of $78, which includes the incremental diamond
recovery from processing improvements.
The Misery Satellite pipes commenced commercial
production (for accounting purposes) on September 1, 2014.
Inventories
Two rough diamond sales (in August and September) were held during
the quarter, ahead of the important Diwali holiday in India, which has resulted in an increase in
the diamonds held in inventory at the end of the period. The
Company plans to hold three rough diamond sales in the fourth
fiscal quarter of 2015.
At October 31,
2014, the Company had rough diamond inventory with an
estimated market value of approximately $350
million. The inventory amount is comprised of
approximately $185 million of rough
diamonds available for sale at market value, which includes
approximately $60 million of rough
diamonds held back from sale in Q3 and an additional $15 million of rough diamonds which are primarily
samples used in the sorting process. The balance of
approximately $165 million of rough
diamonds represents work in progress.
Pricing
Based on the average prices per carat achieved by the Company in
the third fiscal quarter, the Company has modeled the approximate
rough diamond price per carat for each of the Diavik and Ekati
kimberlite process plant feed types below.
Diamond
Prices
September 2014 Average Price per Carat (in US
dollars) |
Diavik Ore
Type |
|
Ekati Ore
Type1 |
A-154 South |
$145 |
|
Koala |
$390 |
A-154 North |
$190 |
|
Koala North |
$435 |
A-418 |
$105 |
|
Fox |
$310 |
Coarse Ore Rejects |
$50 |
|
Misery Satellite Pipes |
$90 |
|
|
|
Coarse Ore Rejects |
$65 - 120 |
|
|
|
Recovered Small Diamonds |
$70 - 100 |
1 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.
Cautionary Statement Regarding Preliminary
Results
The Company cautions that the Company's third quarter sales
results disclosed in this news release are preliminary and reflect
expected third 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 third quarter financial results when it reports
those actual results.
Forward-Looking Information
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.
Qualified person
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 88.9% ownership as well as a 65.3% ownership in the
surrounding areas containing additional resources, and also
owns 40% of the Diavik 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 third largest
producer of rough diamonds by value.
SOURCE Dominion Diamond Corporation