Dominion Diamond Reports Fiscal 2018 First Quarter Results

12 June 2017

Strong sales and Adjusted EBITDA driven by high-value Ekati production; robust project pipeline advancing

On June 12, Dominion Diamond Corporation reported its first quarter operational and financial results for the three months ending April 30, 2017. Highlights include:

  • Higher-value ore blend at Ekati Diamond Mine (“Ekati mine”) continues to have positive impact on financial results
    • Adjusted EBITDA(1) was $97.0 million in Q1 fiscal 2018, an increase of 79% from $54.3 million in Q1 fiscal 2017, reflecting higher-value production at the Ekati mine.
  • Significant year-over-year production growth
    • Consolidated carats recovered increased 17% to 2.15 million carats in Q1 fiscal 2018 from 1.83 million carats in Q1 fiscal 2017 due primarily to production from the high-grade Misery Main pipe at the Ekati mine, with stable production at the Diavik Diamond Mine (“Diavik mine”).
  • Robust project pipeline advancing
    • Misery Deep approved for construction by the Board of Directors based on a positive pre-feasibility study completed in May; Jay water licence recommended for Ministerial approval; Fox Deep preliminary economic assessment underway.
  • Generating growth through exploration
    • High-priority pipes identified near existing infrastructure at Ekati mine – inaugural inferred mineral resource reported at Leslie pipe, and drilling planned at Kodiak pipe this summer.
  • Strong balance sheet maintained
    • Total unrestricted cash resources of $131.2 million, debt of $10.6 million and $210 million available under the revolving credit facility at April 30, 2017.
  • Financial and operating guidance unchanged
    • Fiscal 2018 sales expected to be between $875 and $975 million and Adjusted EBITDA between $475 and $560 million.
  • Value creation remains the focus
    • Dual-track approach – execution on long-term strategy, and strategic review process.

“The significant year-over-year improvement in sales, gross margin and Adjusted EBITDA is the result of our transition to high-value production at Ekati, and continued solid performance at Diavik,” said Jim Gowans, Chairman of the Board. “We are building upon the strong momentum that started at the beginning of this year, while advancing our project pipeline to support longer-term value generation. With Misery Deep now approved for construction, we will benefit from an enhanced mid-term production and cash flow profile, while continuing to optimize our operations and maximize the value of the diamonds we sell.”

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