Dominion results down, projections up
Company releases disappointing 2017 figures, but expects up to $1 billion in sales in 2020
Jessica Davey-Quantick
Northern News Services
Tuesday, April 18, 2017
SOMBA K'E/YELLOWKNIFE
Dominion Diamond Corporation released its fourth-quarter results last week, including a year-end fiscal bellyflop.
Dominion Diamond's sales fell by US$149.7 million but the company has released projections that paint a much brighter future. - NNSL file photo
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The company reported sales fell by US$149.7 million in the twelve months that ended Jan. 31 2017, from $US720.6 million to US$570.9 million. Profits over the same period fell by $40.7 million, continuing a slide that started the year before, when the company reported a loss of US$11.6 million.
Despite this, the company remains optimistic with sales estimates for the coming years that would make Scrooge McDuck blush: up to US$1 billion in 2020.
"We continue to execute on our long-term strategy and create value for all shareholder," stated Jim Gowans, chairman of the board in a news release.
In the same report that disclosed the less than stellar results from this year, the company doubled down on earlier projections for future glory to be found in 2018 - specifically, sales of between US$875 and US$975 million. These bright and shiny numbers are based on high value ore expected to be recovered from the Misery Main and Koala underground pipes at Ekati Mine, new projects getting underway and a $9-million exploration budget for fiscal 2018.
The good times are expected to keep rolling as well. Dominion anticipates sales to continue to rise, going up to between US$880 and US$980 million in 2019, and US$900 and US$1 billion in 2020.
Ekati Mine is expected to produce between 6.4 and 7.1 million carats in 2019, and between 5.1 and 5.6 million carats in 2020. Diavik is expected to do even better, with between 7.0 and 7.4 million carats in 2018 and 6.5 and 6.9 million in 2019.
A spokesperson from the NWT & Nunavut Chamber of Mines could not be reached for comment on whether these numbers were realistic.
Ekati has projects that Dominion expects will start bearing valuable fruit over the summer: the company reported the Misery Deep project's pre-feasibility study was on track to be completed by July, joining the Sable project, which is seven months ahead of schedule as well.
Additionally, the Jay project's water licence was also expected this summer. Looking further ahead, Dominion is banking on the Fox Deep project to bring home the diamond encrusted bacon - the site's pre-feasibilty study is expected late this fiscal year, with resource expectations already on the rise. In March, Dominion estimated the Fox kimberlite pipe could contain 11.6 million carats of diamonds, but one month later those expectations have risen to 16.5 million carats.
Diavik is also getting a reprieve: in an April 12 news release, Dominion announced the mine would now be extended an additional two years, from 2023 to 2025, and is expected to produce between 7 and 7.4 million carats in 2018.
Last month, Dominion fended off a takeover proposal from the Washington Corporations. On March 27, Dominion announced the formation of a special committee to review options, which could include the sale of the company.
Dominion stated in the April 12 news released the board of directors has not set a timetable for the strategic review process, nor has it made any decisions.
