Dominion Diamond Corp Reports Drop in Fiscal Q3 Diamond Sales

(IDEX Online) – Dominion Diamond Corp reports that third fiscal quarter diamond sales from the Ekati and Diavik diamond mine were $102.7 million from the sale of 1.2 million carats compared with $145.0 million from the sale of 800,000 carats in the year-earlier period.

Total carats sold increased by 56% and rough diamond sales decreased 29% in the third fiscal quarter versus the prior year primarily as a result of both the process plant fire at the Ekati diamond mine, which resulted in a reduction in the value of goods available for sale in the quarter, and the carryover of lower average value goods from both the Ekati and Diavik diamond mines in the second quarter of fiscal 2017 for sale in the current period.

Two rough diamond sales were held during the quarter, and the company plans to hold three rough diamond sales in the fourth fiscal quarter of 2017.

"The positive market condition of the first half of calendar 2016 was followed in the third quarter by more muted demand as the rough diamond cutting and polishing industry approached the annual shutdown period for Diwali in India," the miner said in a statement.

"Caution prevailed in the diamond pipeline as polished diamond stocks built up through the quarter, but stable US retail demand has built expectations for a good holiday season beginning in earnest after the presidential election. The market for lower priced rough diamonds was particularly subdued in the third quarter but demand for these goods is cyclical, with decreased demand being typical at this time of year. Demand for these lower priced rough diamonds is expected to return in the fourth quarter.

"The retail jewelry market in China was noticeably more active as evidenced by a positive Hong Kong trade show in September. Mainland based jewelers are more upbeat than their Hong Kong based counterparts who are still suffering from subdued demand in the local market. The retail jewelry market in India showed signs of a return to normality in the Diwali period, however local currency restrictions have caused unease amongst jewelry retailers in the run up to the wedding season."