Dominion Diamond Provides Update on Process Plant Repairs and Updated Ekati Diamond Mine Production Guidance

July 5, 2016

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Dominion Diamond (TSX:DDC) has reported after further review of repairs required at the Ekati Diamond Mine process plant from the fire on June 23, it continues estimating that repairs will take approximately three months from the date of the fire. Current cost of the repairs is estimated at $25 million.

As quoted in the press release:

Repairs will include the replacement of degritting screen #3 with the associated rubber lined chutes, piping, pumps and motors, as well as electrical cables and instrumentation. Most of these items are already on hand while some others are currently being procured, and will be flown to site. The Company has an insurance policy on the Ekati diamond mine that includes a property damage and business interruption component and it has commenced work with its insurance claims adjusters.

The Company is reducing operating costs and deferring some capital costs during the plant downtime. Mining activities continue at the higher value Misery open pit and Koala underground, and have been suspended at Pigeon and Lynx. The Misery and Koala material will be stockpiled, with the intention of processing a blend of the high value Misery Main and Koala ore when the process plant restarts.

Updated production guidance for the Ekati Diamond Mine for fiscal 2017, which takes into account the process plant downtime, is included in the table below. Non-essential sustaining capital projects including mobile equipment rebuilds and the expansion of communication and automation systems have been postponed until fiscal 2018. A temporary layoff of approximately three months has already been implemented with an estimated impact on approximately 330 temporary and permanent contractors, and employees.

Click here to read the full press release.

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Category: Gem