Dominion Diamond Corporation reported that its third quarter fiscal 2017 quarter (three months ended Oct. 31, 2016) gross margin amounted to $22.2 million, resulting in an operating loss of $9.1 million versus an operating profit of $9.5 million a year ago. As previously reported, the company's diamond sales for the third quarter were $102.7 million from the sale of 1.2 million carats. The results reflected both the process plant fire at the Ekati Diamond Mine and the carryover of lower average value goods from both the Ekati and Diavik Diamond Mines in the second quarter of fiscal 2017. However, their consolidated gross margin of $22.2 million for the quarter was positively influenced by the sale of higher value Misery Main carats that were mined and processed prior to the shutdown of the Ekati process plant. Third quarter Adjusted EBITDA of $22.6 million remained positive but was negatively influenced by the process plant fire at the Ekati Diamond Mine, which resulted in $22.4 million in mine standby costs being incurred during the quarter. Third quarter profit before income taxes of $33.4 million and consolidated net income attributable to shareholders of $28.8 million or $0.34 per share for the quarter was reported for the third quarter.
“We are pleased to have restarted the Ekati process plant slightly ahead of schedule and within budget, and to see the start of the positive impact of our mitigation strategy which is now helping to generate positive margin contribution from the first sale of commercial production from Misery Main,” stated Brendan Bell, Chief Executive Officer. “Continued improvements in operational performance, combined with our strong balance sheet, will underpin our ability to deliver on our capital allocation strategy which balances investment in growth with a return of capital to shareholders.” Still, the company notes that prices have decreased by an average of 5% over Q2 fiscal 2017, and noted the market for lower priced rough diamonds was hurt by the demonetization of the Indian rupee. "This disruption is expected to continue to impact demand for lower priced rough diamonds into the first quarter of fiscal 2018." Sales for the first 9 months of fiscal year 2017 fell to $441 million from $542 million.