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Dominion sees positive results
Conveyor belt failure trips up production, diamond grade and recovery higher than expected in fourth quarter

Stewart Burnett
Northern News Services
Wednesday, March 4, 2015

SOMBA K'E/YELLOWKNIFE
Dominion Diamond Corporation released its fiscal year-end and Q4 results, showing strong Christmas sales in the U.S. market but weakness in rough and polished diamonds toward the end of fiscal 2015.

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Dominion Diamonds increased sales in fiscal Q4 2015 compared to last year. The company made improvements to its Ekati processing that increased the recovered diamond grade. - photo courtesy of BHP Billiton

A tightening of available bank financing to the cutting and polishing industry resulted in lower rough diamond sales than expected by Dominion, which runs the Ekati mine and partly owns the Diavik mine.

The company says the medium term supply and demand fundamentals for diamonds remains positive.

Underground production at Ekati's Koala and Koala North locations was 20 per cent lower than planned during the fourth quarter because of a conveyor belt failure in mid-December that required ore be trucked to the surface rather than conveyed.

"This resulted in a year-to-date shortfall of less than four 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," said Richard Chetwode, vice-president of corporate development with Dominion.

With the benefit of multiple sources of kimberlite material, the shortfall was made up by processing additional material from other sites while repairs on the conveyor belt were carried out, he said.

The conveyor belt was repaired and returned to full operation in January.

"Obviously, the ore hasn't disappeared," said Chetwode. "It will still be mined. It was just delayed a bit."

Both grade and recovery at Ekati were higher than expected in the fourth quarter.

Dominion estimated that recent process plant improvements increased the recovered grade by approximately 15 per cent.

The company recorded total fourth quarter sales of $240.6 million, up from $233.2 million in the same quarter last year.

Chetwode said any cost benefits of lower oil prices would be seen next year, as Dominion's diesel was brought in last September, before the oil price fell.

Dominion is the world's third largest producer of rough diamonds by value and supplies to the global market through its sorting and selling operations in Canada, Belgium and India.

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