Dominion Reports 'Exceptional' Performance at Ekati and Diavik
November 21, 14
 The Ekati mine in Canada's North West |
The company recorded total third quarter sales of $222.3 million compared with $148.1 million in the year-earlier quarter. For the first nine months of fiscal 2015, sales were $675.2 million.
Consistent with the two previous quarters, diamond production at the Ekati Diamond Mine continued to exceed plan, driven by both higher than expected grades and operational improvements to the processing plant, the miner said.
The company estimates that process plant improvements implemented over the last 13 months have increased the recovered grade by approximately 15% during the nine month period ending October 31, 2014. The resulting additional diamonds are not currently included in the reserves and the mine plan.
During the quarter, physical modifications to the plant were substantially completed with commissioning expected to take place before the fiscal year-end. Once the process improvements have been completed, the company intends to incorporate these higher recovery rates into an updated reserve statement.
Ore mined at the Diavik Diamond Mine was 5% ahead of plan for the three months ended October 31, 2014, and 12% ahead of plan for the fiscal year to date. This performance results from higher production from all three kimberlite pipes throughout the year due to favorable ground conditions and improved availability of equipment.
At the Diavik mine, ore processing was 5% ahead of plan for the three months ended October 31 and 17% ahead of plan for the fiscal year to date. This was predominately due to greater ore availability as a result of higher mining rates and improved equipment availability, equipment efficiencies and utilization of the processing plant. Carat production was 19% lower compared to the same fiscal quarter of the prior year, primarily due to the processing of a lower proportion of the higher grade A-154 South ore.
Excluded from the Ekati sales recorded in the third quarter were carats produced and sold from the processing of material from the Misery Satellite pipes. During the third quarter, the company sold an estimated 170,000 carats of production from the Misery Satellite pipes for estimated proceeds of $13.6 million for an average price per carat of $79, which includes the recovery of small diamonds.
For the nine months ended October 31, 2014, the Company sold an estimated 400,000 carats of production from the Misery Satellite pipes for estimated proceeds of $31.0 million for an average price per carat of $78, which includes the incremental diamond recovery from processing improvements.
Two rough diamond sales (in August and September) were held during the quarter, ahead of the important Diwali holiday in India, which resulted in an increase in the diamonds held in inventory at the end of the period. The company plans to hold three rough diamond sales in the fourth fiscal quarter of 2015.
At October 31, 2014, the company had rough diamond inventory with an estimated market value of approximately $350 million. The inventory amount is comprised of approximately $185 million of rough diamonds available for sale at market value, which includes approximately $60 million of rough diamonds held back from sale in Q3 and an additional $15 million of rough diamonds which are primarily samples used in the sorting process. The balance of approximately $165 million of rough diamonds represents work in progress.