Dominion Diamond's Sales -35%, Profit -90% in Q3 2016

Mining and Exploration
20/11/2015 14:28

Dominion Diamond Corporation reports that its third quarter diamond sales 2016 (August through October) from the Ekati and Diavik Diamond Mines were $145.0 million, a 35% drop from $222.3 million in Q3 fiscal 2015. Profit before income taxes for Q3 FY 2016 was $4.1 million compared to $59.1 million in Q3 of the previous fiscal, a decline of 90%. The company sold a total of 795,000 carats for a average of $182 per ct. Dominion states that sales were impacted by  cautious market environment, particularly ahead of the extended Diwali holiday in India, which is a time of seasonal weakness in rough demand; the lower value of production mined at Ekati in the course of fiscal 2016 compared to the previous year as a result of the expected shift in the mine plan from higher to lower value production, ahead of the anticipated start-up of Misery production in Q1 fiscal 2017, and; rough diamond prices which have fallen approximately 8% this calendar year. 

During Q3 fiscal 2016, the Ekati Diamond Mine recovered 0.8 million carats from 0.9 million tons of ore processed versus 1.0 million carats from 1.1 million tonnes in Q3 fiscal 2015. The lower tonnage processed is a result of the continued testing relating to the diamond liberation initiative. Dominion also reports that the Misery Main pipe is still on track for first production in Q1 fiscal 2017. Mining from the Pigeon pipe commenced this month. The company held two rough diamond sales during the quarter and plans to hold three rough diamond sales in the fourth fiscal quarter of 2016. As of October 31, 2015, the company had approximately 1.9 million carats of rough diamond inventory available for sale with an estimated market value of approximately $155 million.