Dominion Estimates Ekati Repairs to Cost $19 Million

(IDEX Online News) – Dominion Diamond Corporation has provided a further update on the repairs required at the Ekati Diamond Mine process plant, following a June 23 fire.

The company maintained its recent estimate that the repairs will take approximately three months to complete and will cost around C$25 million ($19 million). This is an initial cost and could fluctuate as repair activities progress.

Repairs will include the replacement of degritting screen #3 with the associated rubber lined chutes, piping, pumps and motors, as well as electrical cables and instrumentation. Dominion said that some items were already on site, but others are being procured and flown in. The company added that it has an insurance policy on the mine that includes property damage and business interruption.

Dominion has announced reduced operating costs and will defer some capital costs during the plant downtime. Mining activities continue at the higher value Misery open pit and Koala underground, and have been suspended at Pigeon and Lynx. The Misery and Koala material will be stockpiled, with the intention of processing a blend of the high value Misery Main and Koala ore when the process plant restarts.

Dominion has temporarily laid off approximately 330 temporary and permanent contractors and employees, for a preliminary period of around three months.

“We continue to actively manage this situation, and have implemented a prudent strategy to minimize the impact of this incident on our cash flow,” said Dominion CEO Brendan Bell. “We’ve planned mining activities to allow for the option to prioritize higher value ore sources on start-up, thereby minimizing the impact on the value of our fiscal year production.”