Dominion: Ekati 'Continues to Exceed Expectations'
April 03, 14
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The consolidated rough diamond sales from the Diavik and Ekati Diamond Mines for the fourth quarter were $233.2 million compared to $110.1 million for the comparable quarter of the prior year.
The company recorded a consolidated net loss from continuing operations of $7.8 million for the quarter compared to a net profit from continuing operations of $12.1 million the year before.
At the end of the quarter, the company held rough diamond inventory with an approximate market value of $205 million, of which $40 million of rough diamond inventory had been held as strategic stock from sale as at January 31.
For the fiscal year, sales from the Diavik Diamond Mine were $352.3 million while from the Ekati Diamond Mine they were $399.6.
The fourth calendar quarter at the Diavik Diamond Mine saw continued strong performance, producing (on a 100% basis) 2.1 million carats from 0.54 million tonnes of ore processed compared to production of 1.9 million carats from 0.47 million tonnes of ore processed in the comparable quarter of the prior year. This was a result of the improvements in the mining rates as the underground ramp-up progressed throughout the year to full production from all three pipes.
During the fourth quarter, the company sold approximately 1.0 million carats from the Diavik Diamond Mine.
During the year ended January 31, 2014, the company sold approximately 3.0 million carats from the Diavik Diamond Mine for a total of $352 million for an average price of $118 per carat, compared to 3.2 million carats for an average price per carat of $109 in the comparable period in the prior year.
Robert Gannicott, Chairman and Chief Executive Officer stated: "Our early experience at Ekati continues to exceed our expectations while Diavik also outperforms its planned targets. The diamond market has improved, both in pricing and volume of demand, as the important diamond consuming economies, led by the US, maintain momentum."
The company said in a statement: "Fiscal 2014 was a year during which the Company transitioned into one of the world's largest pure play diamond mining companies. During this period, the Company completed the sale of the Harry Winston luxury brand segment at an enterprise value of $1 billion (including the assumption of $250 million of pro forma net debt) and the acquisition of the Ekati Diamond Mine from a global mining company for whom diamonds were no longer a core asset. The company paid a total of $553 million for its interest in the Ekati Diamond Mine, which included $62 million of cash, $154 million of rough diamond inventory and $165 million of supplies (fuel, cement and other mining supplies).
"The Diavik Diamond Mine, which is one of the highest grade diamond mines in the world, continues to deliver excellent results.
"The first three months of calendar 2014 has seen an upturn in rough diamond prices of just over 7 percent. This growth is primarily the result of restocking in the US, the world's largest market for diamond jewelry, following strong demand in the important US holiday season and strong demand in China, the world's second largest consumer of diamond jewelry, in the period running up to Chinese New Year. Evidence suggests that jewelry sales are also increasing in India, another major consumer of diamond jewelry where sales had been weak in the past two years."