NYSEAM:DDC - Post by User
Post by
Ciaoon Sep 23, 2016 8:52pm
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Post# 25272794
TD on restart
TD on restart Dominion Diamond Corp.
(DDC-N) US$8.97
Turning the Corner with the Restart of Ekati Mill
Steven Green, CFA
Daryl Young, CFA, CA
Event
Dominion announced the restart of the Ekati mill and the sale of a large diamond
Impact: POSITIVE
Ekati mill restarted:
Dominion announced that the Ekati mill restarted operations at full capacity on September 21, just under three months after being shut down on June 23, in line with the original guidance.
In our view, this marks the turning point for a stronger outlook and improved cash flow generation, with theplant now processing the 750mm-tonne stockpile of higher-value ore mined from the Misery Main open pit and Koala underground. Although the current quarter (Q3) is expected to be weak, with the mill down for most of the quarter, we expect significantly stronger results in Q4 and 2017. Process plant repairs under budget: The total cost of the repairs was US$15mm,below the initial estimates of approximately C$25mm.Large diamond sold; represents upside to management's forecasts: Dominionrecovered a 186-carat gem-quality diamond from the Pigeon pipe in early-June; the stone was the largest gem-quality diamond recovered at the Ekati mine (which does not typically recover large gem-quality diamonds) to-date. The stone was sold in September for $2.8mm