Dominion Holds Off on Ekati Expansion

RAPAPORT… Dominion Diamond Mines has delayed a key extension to its
Ekati mine for a second time as it assesses the project’s profitability, according to reports.

The miner originally postponed the Jay expansion in June
2016 because it determined that the main Ekati deposit could yield more ore
than it had expected. Following that decision, Dominion said it would begin
work on Jay in 2018, rather than its original target of 2017.

However, the miner has pushed back the project again to study how
it can increase Jay’s profitability, CBC News reported Wednesday, citing
a company official.

Jay was due to add 84.6 million carats to Ekati’s production, extending
its life span by approximately 11 years to beyond 2030, according to a 2015
study. The miner projected an average
price of $86 per carat for Jay’s rough diamonds.

Dominion has already received regulatory approvals for the
project, such as a water license and land-use permits. The company has put work
on hold for this year, and hasn’t stated when it will resume those operations, or
how the decision will affect Jay’s time line, CBC News said. Production
was due to begin in 2022,
Dominion said two years ago.

Ekati’s total production was 5.2 million carats in the fiscal year that ended January 31, 2017. Other than Ekati, Dominion also owns 40% of
the Diavik mine in Canada’s Northwest Territories, with the remainder held by
Rio Tinto-owned subsidiary Diavik Diamond Mines. Last year, the asset produced
7.5 million carats, with Dominion’s share coming to approximately 3 million
carats.

In July, US-based Washington Companies bought Dominion for
approximately $1.2 billion. The miner did not respond to Rapaport News’ request for comment.

Image: Copyright © Dominion Diamond Mines