YELLOWKNIFE, Northwest
Territories, November 26, 2014
/PRNewswire/ --
Dominion Diamond Corporation (TSX: DDC,
NYSE: DDC) (the "Company" or "Dominion") reports that Rio Tinto
plc, the parent company of the operator of the Diavik Diamond Mine
(Diavik Diamond Mines (2012) Ltd. ("DDMI")), has approved the
development of the A-21 pipe at the Diavik Diamond Mine, in which
the Company holds a 40% stake. DDMI has estimated the total capital
cost for the development of the A-21 pipe to be approximately
US$350 million at the Company's
estimated Canadian/US dollar exchange rate of $1.11 (on a 100% basis), with the Company's share
being US$140 million. The A-21
resource is well understood, and A-21 diamond production is planned
for late calendar 2018. The A-21 production will provide an
important source of incremental supply for Diavik, ensuring the
continuation of existing production levels.
The A-21 ore body is located under a lake requiring construction
of a dike to isolate the open pit operations. The bulk of the
requisite infrastructure for the A-21 pipe is already in place from
the previous dike construction and pit operations at the Diavik
Diamond Mine, and the necessary operating licenses and agreements
are in place for project implementation. The A-21 ramp up is
anticipated to commence immediately, with the first equipment and
supplies scheduled to be transported in early 2015 to the Diavik
mine site on the seasonal winter ice road. Four years of dike
construction and pre-stripping (2015-2018) are expected to be
followed by approximately five years of open-pit mining. The Diavik
Joint Venture has approved the 2015 programme of works. Expenditure
on the development of the A-21 pipe in 2015 will relate to crushing
costs, pipeline construction and initial dike foundation and
abutment work in preparation for expected dike construction during
the 2016 and 2017 summer seasons. Pre-stripping of the open pit is
expected to commence in 2018 following dewatering of the pool
within the dike.
DDMI has estimated that the A-21 pipe contains (on a 100% basis)
3.6 million tonnes of measured resources, at a grade of 2.8 carats
per tonne, and 0.4 million tonnes of indicated resources at a grade
of 2.6 carats per tonne. These estimates are as of December 31, 2013. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. The
Company intends to publish a detailed summary of the updated
reserves only mine plan for the Diavik Diamond Mine, plus A-21,
once these have been approved by DDMI. The Company expects to
receive an updated estimate of the mineral reserves and mineral
resources at the Diavik Diamond Mine from DDMI in the first
calendar quarter of 2015.
Using the prices from the Company's September 2014 rough diamond sale and the current
diamond recovery profile of the Diavik processing plant, the
Company has modeled the approximate rough diamond price per carat
for the A-21 pipe to be approximately US$145 per carat.
Forward-Looking Information
Information included herein that is not current or historical
factual information, including information about estimated mine
life and other development plans regarding mining activities at the
Diavik Diamond Mine, estimated resources at the A-21 pipe,
projected capital costs, and future diamond prices, constitute
forward-looking information or statements within the meaning of
applicable securities laws. Forward-looking information can
generally be identified by the use of terms such as "may", "will",
"should", "could", "expect", "plan", "anticipate", "foresee",
"appears", "believe", "intend", "estimate", "predict", "potential",
"continue", "objective", "modeled", "hope", "forecast" or other
similar expressions concerning matters that are not historical
facts. Forward-looking information is based on certain factors and
assumptions including, among other things, mining, production,
construction and exploration activities at the Diavik Diamond Mine;
mining methods; currency exchange rates; estimates related to the
capital expenditures required to bring the A-21 pipe into
production, required operating and capital costs; labour and fuel
costs; world and US economic conditions; future diamond prices; and
the level of worldwide diamond production. These assumptions may
prove to be incorrect. 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 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. Due to assumptions, risks and
uncertainties, including the assumptions, risks and uncertainties
identified above and elsewhere in this disclosure, actual events
may differ materially from current expectations. The Company uses
forward-looking statements because it believes such statements
provide useful information with respect to the currently expected
future operations and financial performance of the Company, and
cautions readers that the information may not be appropriate for
other purposes. 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, future 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 http://www.sedar.com and
http://www.sec.gov , respectively.
Qualified person
The scientific and technical information contained in this press
release has been prepared by Diavik Diamond Mines (2012) Inc.,
operator of the Diavik Diamond Mine, under the supervision of
Calvin Yip, P. Eng., Principal
Advisor, Strategic Planning of Diavik Diamond Mines (2012) Inc.,
and a Qualified Person within the meaning of National Instrument
43-101 of the Canadian Securities Administrators.
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.
For more information, please
visit http://www.ddcorp.ca
Mr. Richard Chetwode, Vice
President, Corporate Development - +44-(0)7720-970-762 or
rchetwode@ddcorp.ca; Ms. Kelley
Stamm, Manager, Investor Relations - +1-(416)205-4380 or
kstamm@ddcorp.ca