Dominion Diamond to Proceed with Development of Jay Project, Canada

Published: July 11, 2016 |

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Dominion Diamond Corporation will proceed with the development of the Jay Project based on the positive results of a feasibility study (FS) and subsequent revised project schedule and life-of-mine plan.

The Jay Project is located within the Buffer Zone Joint Venture Property, and is the most significant undeveloped kimberlite pipe deposit at Dominion’s majority-owned Ekati mine in Canada’s Northwest Territories.

Highlights:

• Positive project economics. Base case post-tax NPV at 100 percent share of US $398 million and IRR of 15.6 percent. At Dominion’s share of both the Buffer Zone and Core Zone joint ventures, the project base case post tax NPV is US $278 million and IRR is 16.7 percent. Jay will utilize existing Ekati mine infrastructure and has total development capital cost of US $647 million.

• Self-funding. Development is expected to be funded from existing cash and internal cash flow.

• Platform for future growth at Ekati. Mine life extension to calendar 2033 opens up further development opportunities.

• Development schedule aligned with positive market outlook. Processing commences in calendar 2022 which positions the project well to take advantage of favorable supply-demand dynamics in the diamond market, particularly in the lower price segment.

“The Jay feasibility study has confirmed the economic and technical viability of the large-scale, high grade Jay Project, which is the most significant undeveloped deposit at the Ekati mine. With a revised project schedule and updated mine plan, this positive feasibility study sets out a clear long-term plan for Ekati. We are very confident in the outlook for the diamond market and believe the mine life extension provided by Jay positions us well for the future. While work remains in order to complete project permitting, and to identify optimization and cost reduction opportunities as we build Jay, we are very pleased with the results,” said Brendan Bell, chief executive officer of Dominion Diamond.

Jay is the most significant undeveloped deposit at the Ekati Diamond Mine due to its large size and high grade. Jay is located beneath Lac du Sauvage, a moderate sized lake north of Lac de Gras, and is approximately 1.2 km from the shoreline. The Jay pipe is approximately 7 km to the northeast of the Misery Pit and related infrastructure, and 30 km to the southeast of the main Ekati mine infrastructure.

The Jay FS updates certain key economic and technical assumptions regarding the Jay Project from the pre-feasibility study (PFS) disclosed in January 2015. As was the case for the Jay PFS, the Jay FS evaluated the open pit mining of the Jay pipe as an incremental development opportunity of the Ekati Mine, separate and in addition to all other mineral reserves at the Ekati Mine (including the Sable pipe). The economic analysis in the Jay FS assumed the mining of Sable and Jay concurrently from calendar 2021 to 2023, followed by mining at Jay only from 2024 to 2032, with the completion of Jay processing and the end of Ekati operations in 2033. Compared to the Jay PFS, the expected mine life is extended by two years in order to accommodate concurrent processing of Sable ore at the Ekati processing plant.

“Our strategy for the Ekati Mine is to develop new deposits in tandem with existing mining operations in order to increase the total value of the property. The decision to proceed with Jay, combined with our earlier decision to proceed with the Sable project where construction of infrastructure has begun, are major steps towards the execution of this strategy. Together these projects will add significant value to Ekati and will enable us to pursue other incremental growth opportunities near our existing operations,” added Bell.

To read the full details in the company’s press release, CLICK HERE

About Dominion Diamond
Dominion Diamond Corporation is the world’s third largest producer of rough diamonds by value. Both of its production assets are located in the low political risk environment of the Northwest Territories in Canada where the company also has its head office. The company is well capitalized and has a strong balance sheet. The company operates the Ekati Diamond Mine and also owns 40 percent of the Diavik Diamond Mine. Between the two mining operations, diamonds are currently produced from a number of separate kimberlite pipes providing a diversity of diamond supply as well as reduced operational risk. It supplies premium rough diamond assortments to the global market through its sorting and selling operations in Canada, Belgium and India.

To stop by Dominion Diamond’s website, CLICK HERE

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