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Dominion Diamond Corporation reports Diavik and Ekati Diamond Mine Fourth Calendar Quarter Production

January 15, 2014

TORONTO, Jan. 15, 2014 /PRNewswire/ – Dominion Diamond Corporation (TSX: DDC)
(NYSE: DDC) (the “Company”) reports Diavik and Ekati Diamond Mine
fourth calendar quarter production results.

Diavik Diamond Mine

The fourth calendar quarter of 2013 saw a continuing strong performance
from the Diavik Diamond Mine. During the fourth calendar quarter of
2013, the Diavik Diamond Mine produced (on a 100% basis) 2.1 million
carats from 0.54 million tonnes of ore processed compared to 1.9
million carats from 0.47 million tonnes of ore processed in the
comparable quarter of the prior year.

Processing volumes in the fourth quarter were 16% higher than the prior
year’s comparable quarter. This was a result of improvements in the
mining rates as the underground ramp up progressed throughout the year
to full production from all three pipes.

A new mine plan and budget for calendar 2014 is under final review by
Rio Tinto plc and the Company. The plan for calendar 2014 foresees
Diavik Diamond Mine production (on a 100% basis) of approximately 6.1
million carats from the mining and processing of approximately 1.9
million tonnes of ore. Mining activities will be exclusively
underground with approximately 0.7 million tonnes expected to be
sourced from A-154 North, approximately 0.8 million tonnes from A-154
South and approximately 0.4 million tonnes from A-418 kimberlite pipes.
In addition to the 6.1 million carats produced from underground mining
there will be production from reprocessed plant rejects (RPR) and
production from the improved recovery of small diamonds. This
additional production is not included in the Company’s ore reserves,
and is therefore incremental. Based on historical recovery rates, the
tonnage of this material which is planned to be processed during
calendar 2014 would have produced 0.6 million carats from RPR and 0.2
million carats from the improved recovery process.

Ekati Diamond Mine

With the Company’s senior management now firmly established in
Yellowknife, the Ekati Diamond Mine is performing well. During the
fourth calendar quarter of 2013, the Ekati Diamond Mine produced (on a
100% basis) 0.4 million carats from the processing of 0.9 million
tonnes of ore from the reserves. Activities through the calendar
quarter continued to focus on ore production from the Fox open pit, and
Koala and Koala North underground. The Company also recovered 0.1
million carats from the processing of 0.1 million tonnes of coarse ore
rejects and diamond bearing kimberlite excavated from satellite bodies
in the Misery open pit (referred to as Misery South & Southwest).

A new mine plan and budget for fiscal 2015 is under final review by the
Company. In fiscal 2015, the Ekati Diamond Mine expects to process (on
a 100% basis) approximately 2.7 million tonnes from the mineral reserve
and produce approximately 1.0 million carats. The Company expects to
process approximately 1.7 million tonnes from the Fox pipe (including
stockpiles) and approximately 1.0 million tonnes split between Koala
phase 5 and phase 6 & 7. Additional plant feed to keep the processing
plant at capacity for the period will be sourced from additional levels
in the Koala North underground (inferred mineral resources), the Misery
South and Southwest diamond bearing satellite bodies as well as the
stockpile of coarse ore rejects. The Koala North underground, Misery
South and Southwest satellite bodies as well as the coarse ore rejects
are not included in the Company’s reserves and resource statement and
are therefore considered incremental to production.

Winter Road, Drilling Programme and Permitting

The Winter Road is expected to open in approximately two weeks and the
relevant equipment will be mobilized via that road. The Company is
working on a pre-feasibility study for the Jay Cardinal project which
it aims to complete in calendar 2014.

The diamond and sonic core drilling programme which will be carried out
at the Jay and Cardinal pipes and along alignments for the dikes
planned for the proposed development is expected to commence in
early-mid February 2014.

Permitting of both the Lynx kimberlite pipe and the Jay-Cardinal
kimberlite pipes is proceeding as expected. Dates have been set in
early February 2014 for public hearings on Lynx which has advanced
directly to the permitting phase. At the same time, public scoping
sessions are being held for Jay-Cardinal in order that the upcoming
environmental assessment adequately focusses on issues of public
interest. In parallel, and in support of the processes laid out by
regulators, the Company continues discussions with its community
partners in order to design the projects in a manner which minimizes
any potential environmental impacts and at the same time maximizes
local economic benefit.

Updated Life of Mine Plans

The Company expects to release an updated life-of-mine plan for both the
Diavik Diamond Mine and the Ekati Diamond Mine including current
estimates for anticipated annual production by pipe and associated
operating and capital costs shortly.

Diavik Diamond Mine

For the 2013 calendar year, the Diavik Diamond Mine performed ahead of
target, producing (on a 100% basis) 7.2 million carats from 2.1 million
tonnes of ore processed compared to production of 7.2 million carats
from 2.1 million tonnes of ore processed in the calendar 2012.

DIAVIK DIAMOND MINE PRODUCTION 40% BASIS

     _____________________________________________________________________
    |For the three months ended December  |For the three months ended     |
    |31, 2013                             |December 31, 2012              |
    |_____________________________________|_______________________________|
    |     |   Ore   |      |              |   Ore   |      |              |
    |Pipe |Processed|Carats|    Grade     |Processed|Carats|    Grade     |
    |     |  (000s  |(000s)|(carats/tonne)|  (000s  |(000s)|(carats/tonne)|
    |     | tonnes) |      |              | tonnes) |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |A-154|       51|   220|          4.28|       67|   313|          4.66|
    |South|       69|   144|          2.10|       42|    89|          2.11|
    |A-154|       94|   418|          4.46|       77|   344|          4.49|
    |North|        2|    44|             -|      0.6|    14|             -|
    |A-418|         |      |              |         |      |              |
    |RPR  |         |      |              |         |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |Total|      216|   826|       3.66(a)|      187|   760|       4.01(a)|
    |_____|_________|______|______________|_________|______|______________|

((a) )Grade has been adjusted to exclude RPR

     _____________________________________________________________________
    |For the twelve months ended December |For the twelve months ended    |
    |31, 2013                             |December 31, 2012              |
    |_____________________________________|_______________________________|
    |     |   Ore   |      |              |   Ore   |      |              |
    |Pipe |Processed|Carats|    Grade     |Processed|Carats|    Grade     |
    |     |  (000s  |(000s)|(carats/tonne)|  (000s  |(000s)|(carats/tonne)|
    |     | tonnes) |      |              | tonnes) |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |A-154|      228|   976|          4.29|      166|   750|          4.52|
    |South|      288|   606|          2.11|      173|   354|          2.05|
    |A-154|      326| 1,160|          3.56|      482| 1,732|          3.59|
    |North|        6|   155|             -|        2|    55|             -|
    |A-418|         |      |              |         |      |              |
    |RPR  |         |      |              |         |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |Total|      848| 2,897|       3.26(a)|      823| 2,892|       3.45(a)|
    |_____|_________|______|______________|_________|______|______________|

((a)) Grade has been adjusted to exclude RPR

Cost of Sales and Cash Cost of Production

Based on the current mine plan for the Diavik Diamond Mine for calendar
2014, the Company currently expects its 40% share of the cost of sales
for the Diavik Diamond Mine in fiscal 2015 to be approximately $280
million (including depreciation and amortization of approximately $100
million). The Company’s 40% share of the cash cost of production at the
Diavik Diamond Mine for calendar 2014 is expected to be approximately
$155 million at an assumed average Canadian/US dollar exchange rate of
$1.05.

Capital Expenditures

The Company currently expects Dominion Diamond Diavik Limited
Partnership’s 40% share of the planned capital expenditures for the
Diavik Diamond Mine in fiscal 2015 to be approximately $20 million,
assuming an average Canadian/US dollar exchange rate of $1.05.

Ekati Diamond Mine

During the period from April 10, 2013 to December 31, 2013, the Company
(on a 100% basis) has mined a total of 4.2 million tonnes from the
Ekati Diamond Mine from reserves with approximately 3.5 million tonnes
from the Fox pipe, approximately 0.2 million tonnes sourced from Koala
Phase 5, approximately 0.2 million tonnes from Koala Phase 6 & 7, and
slightly under 0.3 million tonnes from Koala North. During this
period, production (on 100% basis) was 1.1 million carats from the
processing of 2.8 million tonnes of ore from the reserves. The Ekati
Diamond Mine also produced 0.33 million carats from the processing of
0.30 million tonnes of coarse ore rejects and diamond bearing
kimberlite excavated from Misery South & Southwest.

EKATI DIAMOND MINE PRODUCTION 80% BASIS

     ____________________________________________________________
    |For the three months ended December 31, 2013                |
    |____________________________________________________________|
    |Pipe                    |Ore Processed|Carats|Grade         |
    |                        |(000s tonnes)|(000s)|(carats/tonne)|
    |________________________|_____________|______|______________|
    |Koala Phase 5           |           46|    19|          0.42|
    |Koala Phase 6           |           67|    82|          1.21|
    |Koala North             |           63|    48|          0.75|
    |Fox                     |          576|   157|          0.27|
    |Misery South & Southwest|           34|    44|          1.33|
    |Coarse Ore Rejects      |           29|    18|          0.60|
    |________________________|_____________|______|______________|
    |Total                   |          815|   367|          0.45|
    |________________________|_____________|______|______________|

EKATI DIAMOND MINE PRODUCTION 80% BASIS

     ____________________________________________________________
    |For the period from April 10, 2013 (date of acquisition) to |
    |December 31, 2013                                           |
    |____________________________________________________________|
    |Pipe                    |Ore Processed|Carats|Grade         |
    |                        |(000s tonnes)|(000s)|(carats/tonne)|
    |________________________|_____________|______|______________|
    |Koala Phase 5           |          145|    57|          0.39|
    |Koala Phase 6           |          156|   199|          1.27|
    |Koala North             |          187|   140|          0.75|
    |Fox                     |        1,710|   514|          0.30|
    |Misery South & Southwest|          176|   238|          1.36|
    |Coarse Ore Rejects      |           63|    23|          0.37|
    |________________________|_____________|______|______________|
    |Total                   |        2,437| 1,172|          0.48|
    |________________________|_____________|______|______________|

Cost of Sales and Cash Cost of Production

Based on the current mine plan for the Ekati Diamond Mine for fiscal
2015, the Company currently expects cost of sales at the Ekati Diamond
Mine (on a 100% basis) in fiscal 2015 to be approximately $520 million
(including depreciation and amortization of approximately $125
million). The cash cost of production at the Ekati Diamond Mine for
fiscal 2015 is expected to be approximately $360 million (on a 100%
basis) at an assumed average Canadian/US dollar exchange rate of $1.05.

Capital Expenditures

The planned capital expenditures for the core zone at the Ekati Diamond
Mine for fiscal 2015 (on a 100% basis) are expected to be approximately
$195 million at an assumed average Canadian/US dollar exchange rate of
$1.05. The planned capital expenditures include approximately $100
million for the continued development of the Misery Pipe, consisting
largely of mining costs to achieve ore release, and approximately $55
million towards the development of the Pigeon Pipe.

Pricing

Based on the Company’s sales during the fourth calendar quarter of 2013
and the current diamond recovery profile of the Diavik and Ekati
processing plants, the Company has modeled the approximate rough
diamond price per carat for each of the ore types below. The prices
for the diamonds recovered from Misery South and Southwest extension as
well as the coarse ore rejects that are not in reserves are expressed
as ranges since there is limited sample data available.

     __________________________________________________________________
    |Diavik Ore Type|December 2013    |Ekati Ore Type|December 2013    |
    |               |Average Price per|              |Average Price per|
    |               |Carat            |              |Carat            |
    |               |(in US dollars)  |              |(in US dollars)  |
    |_______________|_________________|______________|_________________|
    |A-154 South    |         $140    |Koala Phase 5 |         $350    |
    |_______________|_________________|______________|_________________|
    |A-154 North    |         $180    |Koala Phase 6 |         $405    |
    |_______________|_________________|______________|_________________|
    |A-418          |         $100    |Koala North   |         $420    |
    |_______________|_________________|______________|_________________|
    |RPR            |          $50    |Fox           |         $305    |
    |_______________|_________________|______________|_________________|
    |               |                 |Misery South &|      $80 - 100  |
    |               |                 |South West    |                 |
    |_______________|_________________|______________|_________________|
    |               |                 |Coarse Ore    |      $65 - 120  |
    |               |                 |Rejects       |                 |
    |_______________|_________________|______________|_________________|

Non-IFRS Measure

This disclosure refers to cash cost of production, a non-IFRS
performance measure, in order to provide investors with information
about the measure used by management to monitor performance. This
information is used to assess how well each of the Diavik Diamond Mine
and Ekati Diamond Mine is performing compared to the mine plan and
prior periods. Cash cost of production includes mine site operating
costs such as mining, processing and administration, but is exclusive
of amortization, capital, and exploration and development costs. Cash
cost of production does not have any standardized meaning prescribed by
IFRS and differs from measures determined in accordance with IRFS.
This performance measure is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This measure
is not necessarily indicative of net profit or cash flow from
operations as determined by IFRS.

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 of the world’s most valuable diamond mines.
Both mines are located in the low political risk environment of the
Northwest Territories of Canada. The Company is the fourth largest
diamond producer by value globally and the largest diamond mining
company by market capitalization, listed on the Toronto and New York
Stock Exchanges.

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. It also sells diamonds from its 40% ownership in
the Diavik Diamond Mine.

For more information, please visit www.ddcorp.ca

Forward-Looking Information

Certain information included herein, including information about mining
activities, estimated production from the Company’s mining properties,
cost of sales and cash cost of production estimates and planned capital
expenditures, 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 plans for each of the Diavik
Diamond Mine and the Ekati Diamond Mine; mining, production,
construction and exploration activities at the Company’s mineral
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,
including risks associated with the inability to control the timing and
scope of future capital expenditures, the risk that the operator of the
Diavik Diamond Mine may make changes to the mine plan and other risks
arising because of the nature of joint venture activities, risks
associated with the remote location of and harsh climate at the
Company’s mineral property sites, 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.

SOURCE Dominion Diamond Corporation


Source: PR Newswire



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