Name and Location
Ekati diamond mine – Sable project, Northwest Territories, Canada.

Client
Dominion Diamond Corporation
(88.9%).

Project Description
Dominion has announced a positive prefeasibility study (PFS) on the Sable kimberlite pipe deposit located within the Core Zone Joint Venture property, in the Northwest Territories. Sable’s higher-value ore will allow for optimal mine sequencing and operational flexibility to maximise the value of the Ekati operation.

The Sable pipe is located beneath Sable lake, 17 km north-north-west of the existing Ekati mine infrastructure, and is fully permitted under existing land-use permits, a water licence and a Fisheries Act Authorisation.

The PFS has evaluated the development of the Sable pipe as an incremental development opportunity of the Jay project. Ekati’s Jay pipe, which has an 85-million-carat reserve and is currently in the feasibility study stage, is expected to come on line in 2020.

Incorporating production from Sable into the Jay project will keep the existing Ekati process plant at its full capacity until 2033, with Sable processing ending in 2027.

The Pigeon pipe, with a three-million-carat reserve and a ten-million-carat resource, which began production in 2015, will fill the mine’s production gap between Misery Main and Jay in 2018 and 2019.

Misery Main is a 14-million-carat reserve, with first production expected in the first half of this year. It is estimated to contribute four-million carats this year, which will substantially increase the mine’s output by 70% to an estimated 5.1-million carats in 2016.

Net Present Value/Internal Rate of Return
Using a base diamond price of $140/ct, the PFS has calculated an after-tax net present value, at a 7% discount rate, of $137-million (attributable to Dominion) and internal rate of return of 16.2%.

Value
Development capital will total about $142-million. Prestripping capital is estimated at $85-million.

Duration
The Sable project could extend the life of Ekati by about three years to 2033.

Latest Developments
Dominion has entered into contracts for substantially the entire 2017 financial year construction programme, which is focused on the establishment of an all-season access road to the project area.

Construction of the rock dams and site infrastructure is expected to take place in the 2018 financial year, dewatering and prestripping in the 2019 financial year, and mining and processing of kimberlite later in the same year.

The company plans to re-evaluate and further optimise the Sable mining and processing schedule based on the results of the Jay feasibility study, which is currently under way.

Dominion does not plan on completing a standalone feasibility study on the Sable project.

Key Contracts and Suppliers
Not stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Dominion Diamond Corporation, tel +1 416 362 2237, fax +1 416 362 2230 or email ddc@ddcorp.ca.