A healthy half
Dia Met books $13.7m profit

Doug Ashbury
Northern News Services

NNSL (Oct 04/99) - In its first half-year of earning revenue from Ekati, Dia Met Minerals has booked a healthy bottom-line turnaround.

For the six months ended July 31, Kelowna-based Dia Met, which holds a 29 per cent stake in the Ekati diamond mine at Lac de Gras, made $13.7 million, or 45 cents a share, profit compared to a $1.3 million loss in first half 1998.

Driving the profit were revenues of $39.4 million from Ekati. The company's total six-month revenue was $40.1 million. There are no comparative figures from fiscal 1998 as Ekati went into production in October 1998.

"The Ekati diamond mine continues to supply high quality diamonds to the international market," Dia Met said in a release Wednesday.

Operations to the end of July 1999 are not indicative of the projected annual operations for the mine. The fiscal year ended Jan. 31, 2000 will be the first full year of operations at Ekati.

Repayment of Dia Met's obligation for Ekati's development started in the six months ended July 31 and amounted to $5.1 million. In August, a further $29.1 million was repaid. As well, during the six-month period, Dia Met set aside $12 million for future income taxes to be paid once the company has fully utilized existing tax deductions.

Expenses, part of which is the amount set aside for future income tax, in first half were $12.5 million compared to $256,883.

Assets at July 31 were $362.6 million.

From February through July, 936,000 carats of rough diamonds were sold for $225 million. Average per carat price was $239.42 ($163 US).

Prior to operation commencement, per carat values were predicted to be $130 US.

Graham Nicholls, BHP Diamonds external affairs vice-president, said market conditions improved.

Estimates tended to be conservative, making sure surprises are positive, Nicholls, now based out of BHP's Vancouver head office, said. BHP is the largest owner of Ekati and operator. Currently, BHP markets all of the mine's rough diamonds. Through Aug. 31, 1999, Ekati had produced 1.15 million carats.