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Dominion Diamond Corporation Reports Diavik Diamond Mine Q1 Production

Dominion Diamond Corporation (DDC.TO, DDC) reported that in the first calendar quarter of 2013, the Diavik Diamond Mine produced 1.9 million carats from 0.5 million tonnes of ore processed, as compared to 1.6 million carats from 0.5 million tonnes of ore processed in the comparable quarter of the prior year. The 21% increase in carats recovered in the quarter was primarily due to improved grade in each of the kimberlite pipes. The average grade of ore processed was 3.87 carats/tonne compared with 3.03 carats/tonne in the comparable quarter of the prior year.

A new mine plan and budget for calendar 2013 has been approved by Rio Tinto plc and the company. The plan for calendar 2013 foresees Diavik Diamond Mine production of approximately 6 million carats from the mining and processing of approximately 1.6 million tonnes of ore with a further 0.2 million tonnes processed from stockpile ore. Mining activities will be exclusively underground with approximately 0.7 million tonnes expected to be sourced from A-154 North, 0.5 million tonnes from A-154 South, and 0.4 million tonnes from the A-418 kimberlite pipes. Included in the estimated production for calendar 2013 is approximately 0.6 million carats from RPR and 0.1 million carats from the improved recovery process for small diamonds. These RPR and small diamond recoveries are not included in the company's reserves and resource statement and are therefore incremental to production. Current production for calendar 2013 is ahead of plan by approximately 39% and an upward revision of the plan is under consideration for the end of the second quarter.

The development of A-21, the last of the Diavik Diamond Mine's kimberlite pipes in the original mine plan, has been deferred due to the decreased urgency of development following the identification of extensions to the existing pipes. Although these extension areas cannot be categorized as ore at this time due to insufficient definition work, the company expects the life of the existing developed pipes will be extended, thereby deferring the need for production from A-21 to keep the processing plant full. The A-21 pre-feasibility study currently being undertaken assumes that the A-21 pipe will be mined with the open pit methods used for the other pipes. A dike would be constructed similar to the two other pits but smaller in size. Detailed plans are still being refined and optimized although no underground mining is currently envisaged.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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