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Dominion Diamond Corporation
Canada’s Largest Independent Diamond Producer
and Third Largest Producer Globally by Value
Fiscal Year 2015 Fourth Quarter & Year End Results
Forward Looking Information
TSX/NYSE: DDC
Caution Regarding Forward Looking Information
Certain information included in this presentation constitutes forward-looking information within the meaning of Canadian and United States securities laws. Forward-looking
information relates to management’s future outlook and anticipated events or results, and can include statements or information regarding plans for mining, development,
production and exploration activities at the Company’s mineral properties, sales estimates, expected sales, and expected operating costs. Forward-looking information
included in this presentation includes the estimated mine life and other plans, timelines and targets for mining, development, permitting, production and exploration activities at
the Ekati Diamond Mine and Diavik Diamond Mine, estimated reserves and resources at the Ekati Diamond Mine and Diavik Diamond Mine, production, capital and operating
cost estimates for the Ekati Diamond Mine and the Diavik Diamond Mine and the Company’s intention to pay a regular dividend on its common shares.
Forward-looking information is based on certain factors and assumptions, including, among other things, the current mine plans for each of the Diavik Diamond Mine and the
Ekati Diamond Mine; construction and exploration activities at the Company’s mineral properties; the timely receipt of required regulatory approvals; mining methods; currency
exchange rates; estimates related to the capital expenditures required to bring the Jay pipe and A-21 pipe into production; required operating and capital costs; labour and
fuel costs; world and US economic conditions; future diamond prices; and the level of worldwide diamond production. While the Company considers these assumptions to be
reasonable based on the information currently available to it, they may prove to be incorrect. Forward-looking information is subject to certain factors, including risks and
uncertainties, which could cause actual results to differ materially from what the Company currently expects. These factors include, among other things, the uncertain nature
of mining activities, including risks associated with underground construction and mining operations, risks associated with joint venture operations, including risks associated
with the inability to control the timing and scope of future capital expenditures, risks associated with the estimates related to the capital expenditures required to bring the Jay
pipe and A-21 pipe into production, the risk that the operator of the Diavik Diamond Mine may make changes to the mine plan and other risks arising because of the nature of
joint venture activities, risks associated with the remote location of and harsh climate at the Company’s mineral property sites, variations in mineral reserve and mineral
resource estimates, grade estimates and expected recovery rates, failure of plant, equipment or processes to operate as anticipated, risks resulting from the Eurozone
financial crisis, risks associated with regulatory requirements and any delays in receiving required regulatory approvals, the risk that diamond price assumptions may prove to
be incorrect, the risk of fluctuations in diamond prices and changes in US and world economic conditions, uncertainty as to whether dividends will be declared by the
Company’s board of directors or the Company’s dividend policy will be maintained, or the Company’s the risk of fluctuations in the Canadian/US dollar exchange rate and
cash flow and liquidity risks. Please see the Company’s most recently filed Management’s Discussion and Analysis, as well as the Company’s current Annual Information
Form, both available at www.sedar.com and www.sec.gov, respectively, for a discussion of these and other risks and uncertainties involved in the Company’s operations.
Actual results may vary from the forward-looking information.
Readers are cautioned not to place undue importance on forward-looking information, which speaks only as of the date of this presentation, and should not rely upon this
information as of any other date. Due to assumptions, risks and uncertainties, including the assumptions, risks and uncertainties identified above, actual events may differ
materially from current expectations. While the Company may elect to, it is under no obligation and does not undertake to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise at any particular time, except as required by law.
Technical Information
The scientific and technical information relating to the Ekati Diamond Mine included herein has been prepared and verified by Dominion, operator of the Ekati Diamond Mine,
under the supervision of Peter Ravenscroft, FAusIMM, of Burgundy Mining Advisors Ltd., an independent mining consultant, and a Qualified Person within the meaning of
National Instrument 43-101 of the Canadian Securities Administrators and is given as of January 31, 2015.
The scientific and technical information relating to the Diavik Diamond Mine included herein has been prepared and verified by Diavik Diamond Mines (2012) Inc., operator of
the Diavik Diamond Mine, under the supervision of Calvin Yip, P. Eng., Principal Advisor, Strategic Planning of Diavik Diamond Mines (2012) Inc., and a Qualified Person
within the meaning of National Instrument 43-101 of the Canadian Securities Administrators, and is given as of December 31, 2014.
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TSX/NYSE: DDC
Dominion Diamond – Purely Canadian
The only major diamond producer operating exclusively in Canada
› Low-risk jurisdiction
› Two of the richest producing diamond mines in the world
• Ekati Diamond Mine – 88.9% ownership of the Core Zone and 65.3% of the Buffer Zone
• Diavik Diamond Mine – 40% ownership
› Ekati Diamond Mine has large-scale development assets including the Jay pipe
› Experienced management team based in the Northwest Territories
› Strong Balance Sheet to fund Capex and Environmental Bonds with $458 million of unrestricted
cash and $45 million of debt (as of January 31, 2015)
› Dividend declared on April 8, 2015 of 40 cents per share to be paid in full on May 21, 2015 to
shareholders of record as of April 30, 2015
• Subject to declaration by the Board of Directors, the Company intends to pay a regular annual
dividend of 40 cents per share in total to be paid semi-annually through an interim and final
dividend. For fiscal 2016 an interim dividend of $0.20 per share is expected to be paid in or
around November 2015, and the final dividend is expected to be paid in or around May 2016
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TSX/NYSE: DDC
Dominion Diamond – Purely Canadian
Consistent Diamond Production in a Politically Stable Environment
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TSX/NYSE: DDC
Our Assets
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Sable
Pigeon
Koala U/G
Koala North
Panda
Beartooth
Ekati
Fox
Looking South
Jay
Misery
Lynx
A-21
Diavik
A-418
A-154S
A-154N
Looking South
TSX/NYSE: DDC
Why did we buy Ekati?
Initial Purchase April 2013
$553 million
Ekati Working Capital
› Rough Diamond Inventories
› Cash
› Mine supplies
$154 million
Purchase price net of WC
$172 million
$62 million
$165 million
FY15 Segment Operating Profit $125 million
Current Ownership1
88.9%
Core Zone
20.2M carats of Reserves
51.4M carats of Indicated Resources
65.3%
Buffer Zone
85.6M carats of Reserves
91.6M carats of Indicated Resources
1 Reserves and Resources are as of January 31, 2015, and on a 100% basis; Mineral resources are inclusive of Mineral Reserves.
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TSX/NYSE: DDC
Ekati – Already Delivering Improvements
Carats recovered for FY15 were approximately 28% ahead of plan
Plant Improvements Completed:
› Heavy Media Separators added (HMS)
› Systematic Screen Monitoring and
›
Replacement
X-Ray Recovery improved
Additional planned improvements:
›
›
›
›
High Pressure Grinding Rolls added (HPGR)
More HMS
More Grease Tables
Installed re-crush capability
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TSX/NYSE: DDC
Ekati - Misery Main and Satellite Pipes
Misery Main
› Probable Reserve increased grade from 4.0
carats per tonne to 4.7 carats per tonne
› 3.0 million tonnes of probable reserves
› Approximate price per carat of US$861
Satellites – South and Southwest Extension
› FY 2015: 805,000 carats recovered; grade of
1.39 carats per tonne, average price of $78
per carat
Capex
› Approximately $70 million in fiscal 2016 and
$38 million at the beginning of fiscal 2017
remains to be spent before the first ore from
Misery Main is anticipated to be put through
the processing plant in early calendar 2016
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Based on the Company’s October 2014 prices.
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TSX/NYSE: DDC
Ekati – Pigeon Pipe
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› Located 5km northwest of Koala with a
surface area of 3.5 hectares
› Stripping of waste material already
underway
› Ore mining scheduled to commence in
calendar 2015 and finishing in 2019
› 3.6 million carats in Probable Mineral
Reserve
› 5.9 million carats of Indicated Mineral
Resources
The Pigeon Pipe just before de-watering commenced
› Approximate price per carat of US$1801
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Based on the Company’s October 2014 prices.
Mineral resources that are not mineral reserves do not have demonstrated economic viability; Mineral resources are inclusive of
Mineral reserves.
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TSX/NYSE: DDC
Ekati - Jay Pipe
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›
Located 7km from the existing Misery pit and
approximately 30km from the Ekati process plant
›
Jay is the most significant undeveloped deposit
at Ekati and has the potential to extend the mine
life approximately 11 years beyond the current
projected closure in calendar year 2020
›
84.6 million carats were
Probable Mineral Reserve
›
90.6 million carats of Indicated Mineral
Resources
›
Jay pipe is currently undergoing permitting. A
ministerial decision regarding the Environmental
Assessment is expected in late calendar 2015.
Once this decision is issued, the water and landuse permitting process will take a further six to
eight months
›
Production planned to begin in 2020, ramping up
to full production in 2021 and finishing in 2031
promoted
to
Mineral resources that are not mineral reserves do not have demonstrated economic viability; Mineral resources are inclusive of Mineral
reserves.
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Jay Pre-Feasibility Study Results –
Financial and Project Highlights
Mined waste
TSX/NYSE: DDC
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182.1 million tonnes
Mined ore
45.6 million tonnes
Strip ratio
3.99
Recovered carats
84.6 million carats
Recovered grade
1.9 carats per tonne
Initial development capital
US$657 million1
US$33 million1
Pre-stripping capital
US$148 million1
Sustaining capital
Average diamond price
US$86 per carat2
Pre-tax NPV
US$1,127 million
Post-tax NPV
US$610 million3
Real discount rate
Dike
Ekati Overview
Pit
Road
System
7%
Mine operational life
11 years
Average total operating cost
per tonne processed
$75 per tonne4
Pre-tax IRR
21%
Post-tax IRR
16%3
Note: All US$ figures refer to unescalated 2014 United States Dollars and are on a 100% basis. All tonne totals refer to dry metric tonnes.
1. This estimate is at an assumed exchange rate of 1.135 CA$/US$ in calendar 2015 and 1.10 CA$/US$ in calendar 2016 and thereafter, and includes a
US$83M contingency. The primary capital development cost is expected to be the construction of the dike and its associated infrastructure, including
roads and pumping infrastructure.
2. Using the average prices from the Company's calendar 2014 rough diamond sales and the current diamond recovery profile of the Ekati processing plant,
the Company has modeled the diamond price for Jay to be approximately US$64 per carat. Price forecasts for the Jay PFS are inclusive of a real 2.5%
annual escalation from the average 2014 price over the life of the mine. The 2.5% price escalation price forecast is based on the Company’s analysis of
long term supply-demand balance in the diamond market.
3. After taxes/royalties and unleveraged. Taxes are calculated on a stand-alone basis. Key applicable taxes assumed include a 13% Northwest Territories
royalty rate and a 26.5% statutory income tax rate.
4. Operating costs estimated at a diesel fuel price of $1.20/litre delivered to Ekati.
TSX/NYSE: DDC
Ekati – The Future
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In the current Mine Plan
Longer-term exploration potential
› Misery Main push back on plan
› Pigeon permitted and on plan
› Lynx permitted and on plan
› Fox underground
› Jay underground
› Exploration potential on existing trend lines
Other
› Sable – Open Pit
› Permitted for mining and haulage road
permitting in progress
› Bulk sample completed in April 2015.
Plans are to complete a pre-feasibility
study
› Jay – Open Pit
› Developers Assessment Report (DAR)
filed in November 2014
› Pre-feasibility study results announced
in January 2015
TSX/NYSE: DDC
Diavik Diamond Mine
›
53 million carats in total Reserves
(proven and probable)
›
10 million carats at the A-21 pipe was
promoted to proven reserves
›
A-21 development approved by the
operator in November 2014
›
The
Company’s
40%
share
of
development capital is estimated to be
CDN$157 million
›
Construction is expected to commence in
2015 and diamond production anticipated
by the end of 2018
›
The timing of A-21 in the mine plan does
not extend the existing mine life but adds
additional feed to the process plant when
the A-154S pipe is depleted
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