Dominion Diamond breathes more life into Diavik mine
Dominion Diamond Corporation has announced that its jointly-owned Diavik mine will have its life span extended by two years. At this time, the mining company has also hiked its estimate of the project’s future production.
According to Dominion, the deposit will now last until 2025, compared with a March 2015 projection of 2023. Because of this, the mine’s new estimated output from now until its closure has risen 16 per cent to 46 million carats. The revenue forecast has also gone up 22 per cent to $9 billion for the eight-year period. These new estimates are based on a technical report showing figures from January 31, which reflects the mine’s A-21 extension, set to begin production in 2018.
Jim Gowans, chairman of Domionion, says the updated plan for Diavik “extends the mine life, increases carat production, and grows future revenues and cash flows, while maintaining operating costs and capital expenditures at levels that are consistent with earlier forecasts.”
Adds Gowans, “The focus on cost-efficiency improvements and development of the A-21 pipe, which underpins the mine-life extension, is consistent with our goal of increasing net asset value per share.”
Dominion owns 40 per cent of the Diavik mine, with Rio Tinto holding the rest and running the project operations.
This news comes as Dominion considers a sale of the company. Dominion has said that it is prepared to enter discussions with the Washington Companies over a potential USD $1.1 billion acquisition, while Reuters reported that Dominion had also held merger talks with Stornoway Diamond Corporation, the organization behind Quebec’s Renard mine.