Mr. Richard Chetwode reports
DOMINION DIAMOND CORPORATION REPORTS FISCAL 2015 FOURTH QUARTER AND YEAR-END SALES AND PRODUCTION RESULTS
Dominion Diamond Corp. has released its Ekati diamond mine and Diavik diamond mine fourth
quarter fiscal 2015 (November through January) production data and sales
results. Unless otherwise specified, all financial information is
presented in U.S. dollars.
EKATI DIAMOND MINE PRODUCTION
(100% basis)
For the three months ended Jan. 31, 2015
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
Fox 108 25 0.24
Koala 221 233 1.06
Koala North 37 22 0.59
Misery satellites 255 328 1.29
Coarse ore rejects 346 213 0.61
Total 967 821 0.85
For the three months ended Jan. 31, 2014
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
Fox 565 157 0.28
Koala 145 135 0.93
Koala North 99 76 0.76
Misery satellites 72 93 1.29
Coarse ore rejects 37 22 0.60
Total 918 482 0.53
For the 12 months ended Jan. 31, 2015
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
Fox 1,597 529 0.33
Koala 887 1,065 1.20
Koala North 236 195 0.83
Misery satellites 707 910 1.29
COR 704 459 0.65
Total 4,131 3,158 0.76
For the period from April 10, 2013 (date of acquisition), to Jan. 31, 2014
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
Fox 2,320 700 0.30
Koala 437 384 0.88
Koala North 274 206 0.75
Misery satellites 250 337 1.35
COR 79 29 0.37
Total 3,360 1,655 0.49
Ekati mining update
Waste stripping at the Misery
pipe continued to progress as planned, while the satellite zones
(including Misery South and Southwest) continued to contribute
additional kimberlite material. Stripping and mining of COR were
significantly ahead of plan for both the quarter and the fiscal year,
whereas waste stripping at the Pigeon pipe was negatively affected by
equipment availability during the quarter, although this is unlikely to
change the expected date of the commencement of mining.
Underground production at both Koala and Koala North was 20 per cent lower than
planned during the fourth quarter due to a conveyor belt failure in
mid-December, which required ore to be trucked to surface rather than
conveyed. Repairs to return the system to full operation were completed in January. This resulted in a year-to-date
shortfall of less than 4 per cent in terms of tonnage extracted from Koala and
Koala North, as the decline in the fourth quarter was moderated by the
strong performance in the first three quarters of the fiscal year.
Ekati processing update
The fourth quarter saw a
continued good performance in terms of grade and recovery, which were
both higher than planned. The company estimates that process plant
improvements implemented over the last 16 months have increased the
recovered grade by approximately 15 per cent during the fiscal year 2015. With
the benefit of multiple sources of kimberlite material, the shortfall
associated with lower than expected underground tonnage from Koala
Underground and Koala North during the quarter was made up by processing
additional COR and Misery satellite material, while repairs to the
conveyor were carried out. During the quarter, the commissioning of the
recrush circuit was also completed. Further work is expected to be
carried out over the course of the coming months to continue optimizing
plant recovery. The company intends to incorporate the higher recovery
rates into an updated reserve and resource statement.
Diavik diamond mine production (40-per-cent basis)
The Diavik
diamond mine continued to deliver a good performance for the fourth
consecutive quarter of fiscal 2015.
For the three months ended Jan. 31, 2015
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
A-154 South 57 181 3.17
A-154 North 83 155 1.87
A-418 71 279 3.93
COR -- 13 --
Total 211 628 2.91
For the three months ended Jan. 31, 2014
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
A-154 South 42 186 4.43
A-154 North 91 193 2.12
A-418 99 430 4.34
COR 3 63 --
Total 235 872 3.49
For the 12 months ended Jan. 31, 2015
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
A-154 South 216 773 3.58
A-154 North 348 721 2.07
A-418 336 1,267 3.77
COR 2 61 --
Total 902 2,822 3.07
For the 12 months ended Jan. 31, 2014
Pipe Ore processed (000s tonnes) Carats (000s) Grade (carats/tonne)
A-154 South 217 925 4.26
A-154 North 307 643 2.09
A-418 332 1,177 3.5
COR 7 171 --
Total 863 2,916 3.21
Diavik mining update
Through the quarter, mining
activities from the three pipes progressed well with tonnage mined slightly
ahead of plan by 5 per cent for the quarter. Improvements to equipment
availability and utilization and favourable conditions were the main
contributors to the better-than-planned results. On a year-to-date
basis, this resulted in 10-per-cent-higher tonnage compared with plan.
Diavik processing update
Processing volumes in the
fourth quarter of fiscal 2015 were 10 per cent lower than the same quarter of
the prior year due to the improved processing rates in prior quarters
fully exhausting the stockpiled ore by the third fiscal quarter. This
resulted in only run-of-mine ore being processed in the fourth quarter.
Carats recovered in the fourth fiscal quarter were 28 per cent lower than the
comparable quarter of the prior year as a result of lower realized
grades in all three orebodies and a lower proportion of the high-grade
A-418 ore being processed in the fourth quarter of fiscal 2015 than in
the comparable quarter of fiscal 2014.
Ekati and Diavik rough diamond sales
The company
recorded total fourth quarter sales of $240.6-million ($233.2-million in
fourth quarter fiscal 2014).
FOURTH QUARTER FISCAL 2015 SUMMARY SALES
(in millions of U.S. dollars)
Three months ended Twelve months ended
Jan. 31, 2015 Jan. 31, 2015
Ekati rough (100% basis) $159.1 $564.1
Diavik rough (40% basis) 81.5 351.6
Total sales 240.6 915.7
Carats sold (000s)
Ekati rough (100% basis) 897 2,167
Diavik rough (40% basis) 778 3,014
Total carats sold 11,675 5,181
For the 12 months ended Jan. 31, 2015, the company sold an
estimated 540,000 carats of production from the Misery satellite
pipes for estimated proceeds of $42.5-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 Sept. 1, 2014. Misery Northeast is expected
to remain in precommercial production until the commercial production
phase of the Misery Main pipe commences in fiscal 2017.
Inventories
Despite good Christmas sales in the
important U.S. market, weakness in rough and polished prices toward the
end of fiscal 2015, primarily caused by a tightening of available bank
financing to the cutting and polishing industry, has resulted in lower
rough diamond sales than the company had previously expected during the
period. The medium-term supply and demand fundamentals for diamonds
remain positive.
Three rough diamond sales (in November, December and January) were held
during the quarter, which has resulted in a decrease in the diamonds held
in inventory at the end of the period. The company plans to hold two
rough diamond sales in the first fiscal quarter of 2016.
At Jan. 31, 2015, the company had rough diamond inventory with an
estimated market value of approximately $270-million ($165-million in work-in-progress, $20-million in samples and $85-million of rough diamonds
available for sale).
Pricing
Based on the average prices per carat
achieved by the company in the fourth fiscal quarter, it has
modelled the approximate rough diamond price per carat for each of the
Diavik and Ekati kimberlite process plant feed types.
DIAMOND PRICES: JANUARY, 2015, AVERAGE PRICE PER CARAT
(in U.S. dollars)
Diavik ore type Ekati ore type
A-154 South $135 Koala $365
A-154 North $180 Koala North $410
A-418 $95 Fox $290
Coarse ore rejects $45 Misery satellite pipes $85
Coarse ore rejects $60-$115
Recovered small diamonds $65-$95
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.