Photo by: Duane Daws
TORONTO (miningweekly.com) – Canadian precious gem miner Dominion Diamond Corp on Wednesday reported its third consecutive loss-making quarter for 2013, booking a net loss attributable to shareholders of $7.8-million, or $0.09 a share, for the three months ended January 31.
This compared with a net profit from continuing operations of $12.1-million the year before.
A net foreign exchange loss of $7.9-million during the fourth quarter related to the weakening in the Canadian dollar against the US dollar, and a net income tax expense of $19-million weighed on the bottom line in the period.
The Toronto-based company, which had relocated its senior management to Yellowknife, in the Northwest Territories, to be on hand near its Ekati and Diavik diamond mines, reported consolidated rough diamond sales of $233.2-million compared with the $110.1-million in revenue it booked in the comparable quarter of 2012.
For the period, Dominion reported sales of $114-million from its Ekati mine and $119.2-million from Diavik.
At the end of the quarter, the company held rough diamond inventory valued at about $205-million, of which $40-million of rough diamond inventory had been held as strategic stock from sale as at January 31.
For the full financial year, sales from Diavik totalled $352.3-million, and $399.6-million from Ekati.
Dominion said it saw a continued strong performance from Diavik during the fourth quarter, producing (on a 100% basis) 2.1-million carats from 540 000 t of ore processed, compared with output of 1.9-million carats from 470 000 t of ore processed in the comparable quarter of 2012.
This was a result of the improvements in the mining rates as the underground ramp-up progressed throughout the year to full production from all three pipes.
During the fourth quarter, the company sold about a million carats from the Diavik mine.
Dominion reported full-year diamond sales of three-million carats from the Diavik mine for a total of $352-million, resulting in an average price of $118/ct, compared with 3.2-million carats for an average price of $109/ct in the comparable period.
“Our early experience at Ekati continues to exceed our expectations while Diavik also outperforms its planned targets. The diamond market has improved, both in pricing and volume of demand, as the important diamond consuming economies, led by the US, maintain momentum,” Dominion chairperson and CEO Robert Gannicott said.
Financial year 2014 was a time during which the company transitioned into one of the world's largest pure play diamond mining companies.
During this period, the company completed the sale of the Harry Winston luxury brand segment at an enterprise value of $1-billion (including the assumption of $250-million of pro forma net debt) and the acquisition of the Ekati diamond mine from a global mining company for whom diamonds were no longer a core asset. The company paid a total of $553-million for its interest in Ekati, which included $62-million of cash, $154-million of rough diamond inventory and $165-million of supplies (fuel, cement and other mining supplies).
"The Diavik diamond mine, which is one of the highest grade diamond mines in the world, continues to deliver excellent results,” the company said.
Further, Dominion noted that the first three months of calendar 2014 had seen an upturn in rough diamond prices of just more than 7%. This growth was mainly the result of restocking in the US, the world's largest market for diamond jewellery, following strong demand in the important US holiday season and strong demand in China, the world's second largest consumer of diamond jewellery, in the period running up to Chinese New Year.
Evidence suggested that jewellery sales were also increasing in India, another significant consumer of diamond jewellery, where sales had been weak in the past two years.
On Thursday, Dominion’s TSX-listed shares traded up to a high of C$15.10 a share, before falling back to a closing price of C$14.78 apiece.