Dominion Diamond Announces Positive Results of Misery Deep Pre-Feasibility Study and Provides Update on Fox Deep Project at Ekati Mine

23 May 2017

YELLOWKNIFE, NT (May 23, 2017) – Dominion Diamond Corporation (TSX: DDC, NYSE: DDC) (the “Company” or “Dominion”) is pleased to report the positive results of a pre-feasibility study (Misery Deep PFS) on the development of an underground operation below the Misery open pit at the Ekati Diamond Mine (“Ekati mine”) in the Northwest Territories of Canada. The Company is also providing an update on the Fox Deep project below the mined-out Fox open pit at the Ekati mine. The Misery and Fox kimberlite pipes are located in the Core Zone Joint Venture in which the Company has an 88.9% participating interest. Unless otherwise indicated, all amounts are presented on a 100% basis, and all financial information is presented in US dollars.
Highlights

  • Inaugural probable mineral reserve of 1.8 million tonnes and 8.7 million carats at Misery Deep
  • Positive pre-feasibility study on Misery Deep project, based on underground sublevel retreat mining method, with incremental post-tax net present value of $92 million (Dominion’s share) and internal rate of return of 40%
  • Misery Deep enhances production profile at Ekati mine from fiscal 2020 to 2023, with initial capital development of $94 million, 8.7 million carats recovered, and a construction decision expected June 2017
  • Ekati mine life extended from fiscal 2034 to fiscal 2035
  • Misery pipe continues to produce outstanding large fancy yellow diamonds, providing upside to modelled diamond prices
  • Recently recovered “Arctic Sun” diamond is largest fancy yellow stone recovered to date in North America at 65.93 rough carats, with estimated polished value of $5 million
  • Preliminary economic assessment (PEA) on Fox Deep project expected in third quarter of fiscal 2018, and pre-feasibility study scheduled for late fiscal 2018
“Our exciting high-return Misery Deep project, with a post-tax IRR of 40%, is advancing towards development and is expected to enhance our production profile at Ekati over the medium term,” said Jim Gowans, Chairman of the Board. “The new mineral reserve at Misery Deep reflects the addition of high grade ore close to our existing mining operation and demonstrates the near- to longer-term upside potential at known kimberlites in the Lac de Gras district.”

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