Dominion Diamond Corporation reports that fiscal 2017 second quarter diamond sales were $160.0 million, down from $209.7 million a year before from its Ekati and Diavik diamond mines. At Ekati, production was 0.9 million carats from 0.6 million tons of ore processed versus 0.9 million carats recovered from 1.0 million tons processed a year before. Sales in the second quarter were lower than the prior year primarily due to a high proportion of lower value goods from the Misery Satellites available for sale in the quarter. Three rough diamond sales were held during the quarter. The company plans to hold two rough diamond sales in the third fiscal quarter of 2017. During the quarter, tonnage processed was significantly reduced as a result of the fire at the Ekati process plant that happened on June 23 and the subsequent processing shutdown.
The firm reported that mining operations continued at the higher value Koala underground and Misery Main open pit and have been paused at the lower value Pigeon and Lynx open pits as a cost reduction measure. The company also said that it has signed a binding agreement to sell its downtown Toronto office building for approximately $84.8 million Canadian dollars. The transaction is expected to close during the third fiscal quarter. "After buoyant market conditions in the first quarter, rough prices stabilized in the second quarter supported by confident U.S. retail demand," the firm said in comments on the state of the diamond market globally. "The positive conditions in the first half of the year reduced inventories throughout the pipeline and improved liquidity in the industry. However despite the improvements in sentiment, the banks that finance the industry remain cautious. The retail markets outside the U.S. remain impacted by the strong U.S. dollar, making jewelry comparatively expensive in domestic currency terms. Despite declines in the top end luxury sector, retail demand growth in China is focused on the broader commercial sector of the market supported by a growing middle class. Also in the Far East, Japanese demand remains robust supported by luxury tourism from China. Conversely, the retail markets in Europe, Hong Kong and the Middle East remain somewhat subdued."
In related news, Dominion this week announced the appointment of Trudy Curran and Tim Dabson to its board of directors - bringing the total number of directors to nine. Curran, who has extensive experience in mergers and acquisitions, financing, executive compensation and governance across a range of industries including oil and gas, mining and transportation, will also take on the role of chair of the health, safety, and environmental committee. Dabson is a 35-year diamond industry veteran, holding positions throughout the value chain. He worked for De Beers for 33 years, most recently as executive director – beneficiation, culminating in the transfer of the company’s distribution activities from London to Gaborone, Botswana, at the end of 2013.