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Dominion Diamond Corporation reports Diavik Diamond Mine Second Calendar Quarter Production

July 16, 2014

YELLOWKNIFE, NT, July 16, 2014 /PRNewswire/ – Dominion Diamond Corporation
(TSX: DDC) (NYSE: DDC) (the “Company”) reports Diavik Diamond Mine
production results for the second calendar quarter of 2014:

     __________________________________________________________________
    |Diavik    |         |         |       |     |          |          |
    |Diamond   |         |         |       |     |          |          |
    |Mine      |         |         |       |     |          |          |
    |(100%     |         |         |   %   | YTD |          |          |
    |basis)    | Q2 2014 | Q2 2013 |change |2014 | YTD 2013 | % change |
    |__________|_________|_________|_______|_____|__________|__________|
    |Tonnes    |         |         |       |     |          |          |
    |processed |         |         |       |     |          |          |
    |(millions)|   0.62  |   0.53  |   17% |1.20 |    1.03  |     17%  |
    |__________|_________|_________|_______|_____|__________|__________|
    |Carats    |         |         |       |     |          |          |
    |recovered |         |         |       |     |          |          |
    |(millions)|   2.15  |   1.56  |   38% |4.02 |    3.51  |     15%  |
    |__________|_________|_________|_______|_____|__________|__________|

Processing volumes in the second calendar quarter were 17% higher than
compared to the same quarter of the prior year as a result of
improvements in the mining rates as the underground ramp up progressed
throughout 2013 to full production from all three kimberlite pipes, and
improvements in the availability and utilization of the processing
plant. The 38% increase in diamonds recovered in the second calendar
quarter was the result of a combination of higher realized grades in
all three ore bodies, and a higher volume of ore processed.

The Diavik Diamond Mine full-year production target (on a 100% basis) is
expected to be approximately:

     _______________________________________________________________
    |Run of Mine Production|            |                |          |
    |Diavik Diamond Mine   |Tonnes Mined|Tonnes Processed|  Carats  |
    |(100% basis)          | (millions) |   (millions)   |(millions)|
    |______________________|____________|________________|__________|
    |Revised Mine Plan     |            |                |          |
    |for Calendar 2014     |      2.0   |         2.2    |     6.5  |
    |______________________|____________|________________|__________|
    |Previous Mine Plan    |            |                |          |
    |for Calendar 2014     |      1.9   |         1.9    |     6.1  |
    |______________________|____________|________________|__________|

The plan for tonnes processed includes material from both mining and
stockpiles. Mining activities will be exclusively underground with
approximately 0.7 million tonnes expected to be sourced from A-154
North, approximately 0.5 million tonnes from A-154 South and
approximately 0.8 million tonnes from A-418 kimberlite pipes. The 8%
increase in expected carat production from run of mine ore compared to
the original mine plan results primarily from an increase in ore
processed as a result of improvements in the availability and
utilization of the processing plant. In addition to the 6.5 million
carats produced from run of mine ore there will be production from
coarse ore rejects (“COR”). 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 0.3
million carats from COR.

DIAVIK DIAMOND MINE PRODUCTION 40% BASIS

     _____________________________________________________________________
    |For the three months ended June 30,  |For the three months ended June|
    |2014                                 |                       30, 2013|
    |_____________________________________|_______________________________|
    |     |   Ore   |      |              |   Ore   |      |              |
    |Pipe |Processed|Carats|    Grade     |Processed|Carats|    Grade     |
    |     |  (000s  |(000s)|(carats/tonne)|  (000s  |(000s)|(carats/tonne)|
    |     | tonnes) |      |              | tonnes) |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |A-154|         |      |          3.88|         |      |              |
    |South|       67|   260|              |       61|   229|          3.79|
    |_____|_________|______|______________|_________|______|______________|
    |A-154|         |      |          2.21|         |      |              |
    |North|       88|   194|              |       69|   130|          1.89|
    |_____|_________|______|______________|_________|______|______________|
    |A-418|       92|   401|          4.36|       80|   232|          2.89|
    |_____|_________|______|______________|_________|______|______________|
    |COR  |      0.2|     6|             -|        1|    33|             -|
    |_____|_________|______|______________|_________|______|______________|
    |Total|      247|   860|       3.47(a)|      211|   624|       2.82(a)|
    |_____|_________|______|______________|_________|______|______________|

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

     _____________________________________________________________________
    |For the six months ended June 30,    |  For the six months ended June|
    |2014                                 |                       30, 2013|
    |_____________________________________|_______________________________|
    |     |   Ore   |      |              |   Ore   |      |              |
    |Pipe |Processed|Carats|    Grade     |Processed|Carats|    Grade     |
    |     |  (000s  |(000s)|(carats/tonne)|  (000s  |(000s)|(carats/tonne)|
    |     | tonnes) |      |              | tonnes) |      |              |
    |_____|_________|______|______________|_________|______|______________|
    |A-154|         |      |              |         |      |              |
    |South|      103|   395|          3.84|      120|   524|          4.36|
    |_____|_________|______|______________|_________|______|______________|
    |A-154|         |      |              |         |      |              |
    |North|      190|   421|          2.21|      138|   296|          2.15|
    |_____|_________|______|______________|_________|______|______________|
    |A-418|      185|   715|          3.86|      151|   506|          3.35|
    |_____|_________|______|______________|_________|______|______________|
    |COR  |        3|    75|             -|        3|    76|             -|
    |_____|_________|______|______________|_________|______|______________|
    |Total|      482| 1,606|       3.20(a)|      412| 1,402|       3.24(a)|
    |_____|_________|______|______________|_________|______|______________|

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

Pricing

Based on the Company’s sales during the second calendar quarter of 2014
and the current diamond recovery profile of the Diavik processing
plant, the Company has modeled the approximate rough diamond price per
carat for each of the ore types below.

     _______________________________________
    |               |       June 2014       |
    |               |Average Price per Carat|
    |Diavik Ore Type|    (in US dollars)    |
    |_______________|_______________________|
    |A-154 South    |              $145     |
    |_______________|_______________________|
    |A-154 North    |              $190     |
    |_______________|_______________________|
    |A-418          |              $105     |
    |_______________|_______________________|
    |COR            |               $50     |
    |_______________|_______________________|

The Diavik Diamond Mine reports production results to a December 31
year-end. The Ekati Diamond Mine reports production results in line
with the Company’s fiscal year-end of January 31. It is the intention
of the Company that the Ekati Diamond Mine fiscal 2015 second quarter
production report (covering the period from May 1, 2014, to July 31,
2014) will be published in August 2014.

Forward-Looking Information

Certain information included herein, including information about mining
activities and estimated production from 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 plans for the Diavik Diamond Mine; mining, production,
construction and exploration activities at the Diavik Diamond Mine;
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 Diavik Diamond
Mine, 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 80% ownership as
well as a 58.8% 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


Source: PR Newswire



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