UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR
15D-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2016 |
Commission File Number: 001-33838 |
DOMINION DIAMOND CORPORATION |
(Translation of registrant's name into English)
P.O. Box 4569, Station A Toronto, ON, Canada M5W 4T9 |
(Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ⃞ Form 40-F ⊠
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ⃞
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ⃞
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ⃞ No ⊠
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DATED the 23rd day of February, 2016.
DOMINION DIAMOND CORPORATION |
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(Registrant) | ||||
By: |
/s/ Ron Cameron |
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Name: |
Ron Cameron |
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Title: |
Chief Financial Officer |
EXHIBIT INDEX
EXHIBIT |
DESCRIPTION OF EXHIBIT |
|
99.1 |
News release dated February 23, 2016 - Dominion Diamond Corporation reports Fiscal 2016 Fourth Quarter and Year-End Sales; Ekati Diamond Mine Production Results, Ekati Fiscal 2017 Mine Plan and Jay Pipe Update |
Exhibit 99.1
Dominion Diamond Corporation Reports Fiscal 2016 Fourth Quarter and Year-End Sales; Ekati Diamond Mine Production Results, Ekati Fiscal 2017 Mine Plan and Jay Pipe Update
YELLOWKNIFE, Northwest Territories--(BUSINESS WIRE)--February 23, 2016--Dominion Diamond Corporation (TSX:DDC, NYSE:DDC) (the “Company” or “Dominion”) reports Ekati Diamond Mine and Diavik Diamond Mine fourth fiscal quarter 2016 (November through January) sales, Ekati Diamond Mine production results, fiscal 2017 Mine Plan for the Ekati Diamond Mine and Jay pipe update. Unless otherwise specified, all financial information is presented in U.S. dollars.
Highlights
(1) Excluded from the Ekati sales recorded in the fourth fiscal
quarter of 2016 is $2.5 million of sales from carats produced and sold
from the processing of material from the Misery Northeast pipe produced
during the pre-commercial production period ($11.5 million in Q4 fiscal
2015 from the Misery South, Southwest and Northeast pipes).
(2)
Excluded from the Ekati sales recorded in fiscal year 2016 is $9.5
million of sales from carats produced and sold from the processing of
material from the Misery Northeast pipe produced during the
pre-commercial production period ($42.5 million in fiscal 2016 from the
Misery South, Southwest and Northeast pipes).
Sales
Ekati and Diavik Rough Diamond Sales
The
Company recorded total fourth quarter sales of $178.1 million ($240.6
million in Q4 fiscal 2015). For fiscal year 2016, the Company recorded
sales of $720.6 million ($915.7 million in fiscal 2015).
Q4 FY 2016 Summary
Sales in millions of US dollars |
Three months ended
Jan 31, 2016 |
Twelve months ended
Jan 31, 2016 |
||||
Ekati Rough (100% basis) | $ | 111.6 | $ | 464.8 | ||
Diavik Rough (40% basis) | $ | 66.5 | $ | 255.7 | ||
Total Sales(1) | $ | 178.1 | $ | 720.6 | ||
Carats Sold (000s) |
||||||
Ekati Rough (100% basis) | 636 | 2,337 | ||||
Diavik Rough (40% basis) | 469 | 1,740 | ||||
Total Carats Sold (a) (1) | 1,105 | 4,077 |
(a) Figures may not add up due to rounding.
(1) Excluded from
the Ekati sales recorded in the fourth fiscal quarter of 2016 and fiscal
year 2016 were carats produced and sold from the processing of material
from the Misery Northeast pipe produced during the pre-commercial
production period. During the fourth quarter for fiscal 2016, the
Company sold an estimated 40,000 carats of such production for estimated
proceeds of $2.5 million (150,000 carats and estimated proceeds of $11.5
million in Q4 fiscal 2015 from the Misery South, Southwest and Northeast
pipes). For the twelve months ended January 31, 2016, the Company sold
an estimated 140,000 carats from this production for estimated proceeds
of $9.5 million (estimated 540,000 carats and estimated $42.5 million in
fiscal 2015 from the Misery South, Southwest and Northeast pipes).
The Diamond Market
U.S. Diamond retail sales
were positive in the important fourth quarter. In China, consumers
continued to buy diamond jewellery, but the previous overstocking by
retailers meant much lower replenishment of inventory during the period.
Prices were lowered by 5% in the Company’s January sale in line with the
market, but polished prices in many categories have firmed as the U.S.
looks to restock and the shortage of rough in the cutting centers has
resulted in an improvement in some areas of rough pricing being seen at
the Company’s tender in early February in India.
Inventories
Three rough diamond sales were held
during the quarter. The Company plans to hold two rough diamond sales in
the first fiscal quarter of 2017.
At January 31, 2016, the Company had approximately 2.0 million carats of rough diamond inventory available for sale with an estimated market value of approximately $97 million. The Company also had approximately 1.3 million carats of rough diamond inventory that was work in progress (compared to 1.0 million carats of rough diamond inventory that was work in progress as at January 31, 2015). The low average price per carat for the inventory available for sale at the end of the period is partially a reflection of the Company choosing to hold back a quantity of lower value rough diamonds which were then sold in the second week in February at a tender in India in order to confirm market prices for this range of rough diamonds.
Diamond Inventory (available for sale)
(in millions of US dollars, except carats) |
Jan 31, 2016 | Oct 31, 2015 | Jan 31, 2015 | |||||||||
Ekati Diamond Mine (100%) | Carats (million) | 1.0 | 1.0 | 0.1 | ||||||||
Estimated Market Value | $ | 60 | $ | 90 | $ | 65 | ||||||
Diavik Diamond Mine (40%) | Carats (million) | 1.0 | 0.9 | 0.1 | ||||||||
Estimated Market Value | $ | 37 | $ | 65 | $ | 20 | ||||||
Diamond Inventory |
Estimated Market Value of Inventory1 |
$ | 97 | $ | 155 | $ | 85 |
(1) Diamond inventory figures exclude approximately $18 million of samples which are used in the sorting and valuation processes.
Pricing
The Company has modeled the approximate
rough diamond price per carat for each of the Diavik and Ekati
kimberlite process plant feed types below based on the average price per
carat achieved in January 2016.
Diamond Prices January 2016 Average Price per Carat (in US dollars)1 |
|||||||||||
Diavik Ore Type |
Ekati Ore Type2 |
||||||||||
A-154 South | $ | 120 | Koala | $ | 295 | ||||||
A-154 North | $ | 160 | Koala North | $ | 350 | ||||||
A-418 | $ | 85 | Fox | $ | 265 | ||||||
COR | $ | 45 | Misery South and Misery Main(3) | $ | 70 | ||||||
Misery SW Extension(4) | $ | 40 – 55 | |||||||||
COR | $ | 60 – 105 | |||||||||
Pigeon(3) | $ | 155 |
(1) Rough diamond prices are rounded to the nearest $5 per carat.
(2)
The pricing above is based on the Company’s pricing model, which does
not include price adjustments for the additional recovery resulting from
the diamond liberation initiative.
(3) Estimated prices for Misery
Main pipe and the Pigeon pipe are based on modelled prices rather than
actual sales since no production from either pipe was sold by the end of
January 2016.
(4) Estimated prices for Misery Southwest Extension
have been updated based upon the sorting results of goods produced
during the batch processing of unblended material in Q3 fiscal 2016.
Ekati Production
Ekati Diamond Mine Production (100% basis)
For the three months ended Jan 31, 2016 | For the three months ended Jan 31, 2015 | ||||||||||||
Pipe |
Ore Processed (000s tonnes) |
Carats (000s) |
Grade (carats/tonne) |
Ore Processed (000s tonnes) |
Carats (000s) |
Grade (carats/tonne) |
|||||||
Fox | - | - | - | 108 | 25 | 0.24 | |||||||
Koala | 293 | 266 | 0.91 | 221 | 233 | 1.06 | |||||||
Koala North | - | - | - | 37 | 22 | 0.59 | |||||||
Pigeon | 39 | 24 | 0.60 | - | - | - | |||||||
Misery Satellites(1) | 377 | 706 | 1.87 | 255 | 328 | 1.29 | |||||||
COR(2) | 208 | 168 | 0.81 | 346 | 213 | 0.61 | |||||||
Total(3) | 917 | 1,164 | 1.27 | 967 | 821 | 0.85 |
For the twelve months ended Jan 31, 2016 | For the twelve months ended Jan 31, 2015 | ||||||||||||
Pipe |
Ore Processed (000s tonnes) |
Carats (000s) |
Grade (carats/tonne) |
Ore Processed (000s tonnes) |
Carats (000s) |
Grade (carats/tonne) |
|||||||
Fox | 85 | 24 | 0.28 | 1,597 | 529 | 0.33 | |||||||
Koala | 1,034 | 883 | 0.85 | 887 | 1,065 | 1.20 | |||||||
Koala North | 97 | 53 | 0.55 | 236 | 195 | 0.83 | |||||||
Pigeon | 39 | 24 | 0.60 |
- |
- |
- |
|||||||
Misery Satellites(1) | 1,146 | 1,941 | 1.69 | 707 | 910 | 1.29 | |||||||
COR(2) | 1,216 | 807 | 0.66 | 704 | 459 | 0.65 | |||||||
Total(3) | 3,618 | 3,732 | 1.03 | 4,131 | 3,158 | 0.76 |
(1) The Misery Satellites include the Misery South and Southwest
satellite pipes, which are inferred resources, and Misery Northeast
material. Approximately 10,000 tonnes of Northeast material was
processed in the fourth fiscal quarter at an average grade of 1.21
carats per tonne, and approximately 133,000 tonnes of Northeast material
was processed during the twelve months ended January 31, 2016, at an
average grade of 1.00 carats per tonne. The Northeast material is not
included in the reserves or resources and is therefore incremental
production.
(2) This material is not included in the reserves or
resources and is therefore incremental production.
(3) Figures may
not add up due to rounding.
Diavik Production
The Diavik Diamond Mine production
results for the fourth calendar quarter of 2015 were released on January
18, 2016. Diavik reports to the calendar year ending December 31, and
Ekati reports to the fiscal year ending January 31. The Company does not
report Diavik fiscal production results.
Ekati Fiscal 2017 Mine Plan
Run of Mine Production (100% basis) | |||||
Pipe |
Tonnes Processed (millions) |
Carats (millions) |
|||
Reserves Only Base Case | |||||
Koala Underground | 1.2 | 0.7 | |||
Pigeon | 1.1 | 0.5 | |||
Misery Main | 0.5 | 2.5 | |||
Total (Base Case only)(2)(3) |
2.8 | 3.7 | |||
Misery Southwest(1) | 0.7 | 1.5 | |||
Misery South(1) | 0.3 | 0.3 | |||
Total (Operating Case)(2)(3) |
3.9 | 5.5 | |||
Waste tonnes moved | 26.7 | - |
(1) Misery South and Southwest pipes are currently inferred
resources. Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Inferred mineral resources are
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral
reserves. There is no certainty that the Operating Case will be realized.
(2)
The Base and Total Operating Case do not include any impact of the
diamond liberation initiative.
(3) Figures may not add up
due to rounding.
Ekati Fiscal 2017 Mine Plan Key Timeline
Jay Pipe Update
The Company expects to complete
the Jay Feasibility Study by May 2016, one month later than previously
expected. In advance of this study’s completion, the Company is pleased
to provide an update on evaluation of the Jay Pipe.
The Company is currently evaluating the results of a reverse circulation drilling campaign conducted at Jay during winter 2015 as part of the Jay Feasibility Study. A total of 8 holes were drilled at approximately 24 inches in diameter, for a total of 1,028 tonnes sampled. The Ekati Bulk Sample Plant processed the drill hole interval samples and a total of 1,904 carats were recovered at a 1.0mm bottom cut-off, for a recovered sample grade of 1.85 carats/tonne. As part of the 2015 sample review, the 1996 and 2006 samples were re-interpreted and it was determined that they were processed at a 0.5mm bottom slot screen cut-off and 0.65mm bottom slot screen size cut-off, respectively. The Jay Pre-Feasibility Study (“Jay PFS”) had assumed that the 1996 and 2006 samples were processed at a 1.0mm slot screen cut-off. This reinterpretation suggests, all things being equal, a marginally higher diamond price for Jay, balanced by a lower grade, than previously reported, resulting in a net impact of a decrease in value per tonne in the range of approximately 7%.
Using the average prices from the Company’s November 2015 diamond sales, and diamond valuation data from the 1996, 2006, and 2015 drilling program parcels, Kleingeld, Young and Partners (“KYP”) has now modeled the diamond price for Jay at a 1.0mm bottom slot screen cut-off to be between $53-$58 per carat (in 2015 USD), depending on the rock type. The average modeled price for Jay will depend on the proportion of rock types to be mined. For comparison, using average prices from the Company’s October 2014 diamond sales, and diamond valuation data from the 1996 and 2006 drilling program parcels, the Jay PFS had originally modeled the diamond price for Jay at a 1.0mm bottom slot screen cut-off to be between $54-$70 per carat, with an average price of $64 per carat (in 2014 USD). Diamond prices have weakened between the Company’s October 2014 and November 2015 diamond sales.
This Jay pipe update does not yet include the impact of additional diamond recovery in the lower value smaller size categories as a result of the Company’s previously announced commissioning of the Fine DMS unit in the Ekati processing plant. The additional recovery from the Fine DMS is expected to result in an increase in recovered carats from the processing of the same tonnage of kimberlite.
Once the Jay Feasibility Study is complete, the Company will provide updated Mineral Resource and Mineral Reserve estimates for the Jay kimberlite deposit.
Qualified Person
The scientific and technical
information contained in this press release has been prepared and
verified by Dominion, operator of the Ekati Diamond Mine, under the
supervision of Peter Ravenscroft, FAusIMM, of Burgundy Mining Advisors
Ltd., an independent mining consultant, and a Qualified Person within
the meaning of National Instrument 43-101 of the Canadian Securities
Administrators. For further details and information concerning the
Company’s mineral reserves and resources at the Ekati Diamond Mine,
please refer to the technical report entitled “Ekati Diamond Mine,
Northwest Territories, Canada, NI 43-101 Technical Report” that has an
effective date of January 31, 2015, which can be found on the Company’s
profile at www.sedar.com and on the Company’s website at www.ddcorp.ca.
Cautionary Statement Regarding Preliminary Results
The
Company cautions that the Company’s fourth quarter and year-end sales
results disclosed in this news release are preliminary and reflect
expected fourth quarter year-end sales results as of the date of this
news release. Actual reported results are subject to final review and
may vary from what is currently expected because of a number of factors,
including, without limitation, additional or revised information and
changes in accounting standards or policies or in how those standards
are applied. In addition, the preliminary results contained in this news
release do not include all of the measures of financial performance that
would be disclosed in the Company’s annual financial statements. The
Company will provide additional financial information and related
discussion and analysis about its fourth quarter and year-end financial
results when it reports those actual results.
Forward-Looking Information
Certain information
included herein, including information about mining activities and other
plans at the Ekati Diamond Mine, estimated production from the Ekati
Diamond Mine and the completion of the Jay Feasibility Study,
constitutes forward-looking information or statements within the meaning
of applicable securities laws. Forward-looking information is based on
certain factors and assumptions including, among other things, the
current mine plan for the Ekati Diamond Mine; mining, production,
construction and exploration activities at the Ekati Diamond Mine;
currency exchange rates; world and US economic conditions; future
diamond prices; and the level of worldwide diamond production.
Forward-looking information is subject to certain factors, including
risks and uncertainties, which could cause actual results to differ
materially from what the Company currently expects. These factors
include, among other things, the uncertain nature of mining activities,
including risks associated with underground construction and mining
operations, risks associated with joint venture operations, risks
associated with the remote location of and harsh climate at the
Company’s mining properties, variations in mineral reserve and mineral
resource estimates, grade estimates and expected recovery rates, failure
of plant, equipment or processes to operate as anticipated, risks
resulting from the Eurozone financial crisis, risks associated with
regulatory requirements, the risk of fluctuations in diamond prices and
changes in US and world economic conditions, the risk of fluctuations in
the Canadian/US dollar exchange rate and cash flow and liquidity risks.
Actual results may vary from the forward-looking information. Readers
are cautioned not to place undue importance on forward-looking
information, which speaks only as of the date of this disclosure, and
should not rely upon this information as of any other date. While the
Company may elect to, it is under no obligation and does not undertake
to, update or revise any forward-looking information, whether as a
result of new information, further events or otherwise at any particular
time, except as required by law. Additional information concerning
factors that may cause actual results to materially differ from those in
such forward-looking statements is contained in the Company's filings
with Canadian and United States securities regulatory authorities and
can be found at www.sedar.com and www.sec.gov,
respectively.
About Dominion Diamond Corporation
Dominion Diamond
Corporation is the world’s third largest producer of rough diamonds by
value. Both of its production assets are located in the low political
risk environment of the Northwest Territories in Canada where the
Company also has its head office. The Company is well capitalized and
has a strong balance sheet.
The Company operates the Ekati Diamond Mine through its 88.9% ownership as well as a 65.3% ownership in the surrounding areas containing additional reserves and resources, and also owns 40% of the Diavik Diamond Mine. Between the two mining operations, diamonds are currently produced from a number of separate kimberlite pipes providing a diversity of diamond supply as well as reduced operational risk. It supplies premium rough diamond assortments to the global market through its sorting and selling operations in Canada, Belgium and India.
For more information, please visit www.ddcorp.ca
CONTACT:
Dominion Diamond Corporation
Mr. Richard Chetwode, +44
(0) 7720-970-762
Vice President, Corporate Development
rchetwode@ddcorp.ca
or
Ms.
Kelley Stamm, 416-205-4380
Manager, Investor Relations
kstamm@ddcorp.ca