Dominion Diamond Corporation Sales Slump by 24% in Q2 2016

(IDEX Online News) – Canadian miner Dominion Diamond Corporation’s second fiscal quarter 2016 sales dropped by 24 percent, amid a falloff in Asian demand, particularly China. This included Dominion lowering its prices during its latest sale in August. Earnings per share were also negatively affected by the strong US dollar and a one-time payment following the departure of former CEO Robert Gannicott.

Sales in the three months ended July 31 slipped to $209.7 million from $277.3 million a year previously. Dominion reported a loss of $2.8 million in the quarter before income tax, compared with a quarterly profit of $38.2 million over the same period in 2014. Operating Profit in the first half of this year was $19 million, a slump from $77.2 million during the same period the prior year.

The miner reported that production and development issues, which had contributed to the difficult economic conditions, were being resolved. This included a new diamond liberation initiative at the Ekati mine in July, which includes a reduction in the level of throughput to the plant from 12,000 to 10,500 tons per day (or approximately 4.3 to 3.8 million tons per year). At the Koala Underground and Koala North mines, the company said that it more than made up for a shortfall in the amount of mined ore as a result of conveyor belt issues. Pre-feasibility studies at Sable produced positive results, and production at Misery Main is expected by first quarter 2017 and at the Pigeon pipe by early fourth quarter 2016.

“The Company’s operations are on track and once again performing well. We have overcome the production challenges experienced earlier in the year and look forward to improved performance as we move through the second half of this transitional year at Ekati. We continue to focus on driving operational efficiencies as well as creating additional value from a range of exciting current and future projects. These include bringing Misery Main into production next year, the ongoing work to increase diamond liberation and recovery at Ekati,” said CEO Brendan Bell. “…In the second quarter we generated positive free cash flow and expect this to continue for the second half of the year. We are also pleased to confirm that we will be paying our interim dividend of $0.20 per share in November,” he added.