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Dominion Diamond Corporation Issues Reserve and Resource statement for the Ekati Diamond Mine



  Dominion Diamond Corporation Issues Reserve and Resource statement for the
                              Ekati Diamond Mine

PR Newswire

TORONTO, April 24, 2013

TORONTO, April 24, 2013 /PRNewswire/ - Dominion Diamond Corporation (TSX:DDC),
(NYSE:DDC) (the "Company")  is pleased  to release the  reserves and  resource 
statement for the Ekati Mine that is  expected to be included in the  upcoming 
43-101 Technical Report.The Ekati Diamond Mine was acquired from BHP  Billiton 
Canada Inc. in April 2013  and consists of two  joint ventures, the Core  Zone 
and the Buffer Zone Joint Ventures.

Highlights are:

  * The Ekati Diamond Mine consists of 282 mining leases over 262,175
    hectares, containing 150 known kimberlites, with Mineral Resources
    currently estimated for eight pipes, and Mineral Reserves for five.
  * Indicated Mineral Resources (inclusive of Mineral Reserves) of 105.7
    million tonnes containing an estimated 127.5 million carats.
  * Inferred Mineral Resources of 24.9 million tonnes containing an estimated
    19.1 million carats.
  * Probable Mineral Reserves of 20.6 million tonnes containing an estimated
    19.6 million carats.
  * Koala is being mined using an incline caving method, and Koala North is
    using a sub-level retreat mining method. The Fox open pit is currently
    active. The Misery pit is undergoing a pushback. 
  * Production to 2019 is supported by the current Mineral Reserves. 
  * There is significant upside potential to extend the mine life if some or
    all of the mineralization is promoted to resource status.  In addition the
    Jay, Lynx, Sable and Fox deep mineral resources, may be able to be
    incorporated in the life-of-mine plan once sufficient additional technical
    work has been undertaken.
  * Additional potential for supplemental process plant feed is present in the
    form of coarse reject tails that have been stockpiled at Ekati since the
    start of production in 1998 to present.  There is also potential to treat
    low-grade stockpiles, primarily derived from open pit mining at the Fox
    kimberlite, if the grades in the stockpiles can be demonstrated to be
    economic with additional testwork.

The classification of  reserves is  supported by an  economic model,  relating 
only  to  the  mining  of  reserves,  and  prepared  solely  to  justify   the 
classification as reserves by demonstrating economic value. This model is  the 
basis for  the  basis  for  the 43-101  and  includes  the  Company's  current 
estimates of  future rough  diamond revenue  from the  current reserves  only, 
which will be included in the 43-101  technical report to be published in  the 
next month.  The  model  also includes  an  estimate  of costs  which  can  be 
reasonably attributed to the mining and processing of reserves only.

This model does not  constitute the operating plan  for the project. The  mine 
plan implemented by the previous operator included the past and future  mining 
of substantial additional mineralization which is not currently categorized as
reserves or resources  within the  meaning of National  Instrument 43-101  but 
which the Company  expects to continue  to mine  as part of  its current  mine 
plan.   The  Company  may  elect  to   do  further  technical  work  on   this 
mineralization to determine  whether such  mineralization can  be promoted  to 
Reserve status. The Company is constrained by National Instrument 43-101  from 
including this mineralization in a combined production mine plan.

The Core Zone Joint Venture, which  contains the current producing assets,  is 
held 80% by the Company, and hosts the Koala, Koala North, Misery, Pigeon, and
Fox kimberlites.The Company also holds 58.8% of the Buffer Zone Joint Venture,
which hosts  the Jay  and Lynx  kimberlites: neither of  these kimberlites  is 
ascribed a value in the current life-of-mine plan.

Conference Call and Webcast
Beginning at 8:30AM  (ET) on  Thursday, April 25th,  the Company  will host  a 
conference  call  for  analysts,  investors  and  other  interested   parties. 
Listeners may access a live broadcast of the conference call on the  Company's 
investor relations web site at www.ddcorp.ca or by dialing 888-771-4371 within
North America  or  847-585-4405  from  international  locations  and  entering 
passcode 34744794.

An online archive of the broadcast will be available by accessing the
Company's investor relations web site at www.ddcorp.ca. A telephone replay of
the call will be available one hour after the call through 11:00PM (ET),
Thursday, May 9th, 2013 by dialing 888-843-7419 within North America or
630-652-3042 from international locations and entering passcode 34744794.

About Dominion Diamond Corporation
Dominion Diamond  Corporation  is  a  Canadian  diamond  mining  company  with 
ownership interests in two  of the world's most  valuable diamond mines.  Both 
mines are  located in  the low  political risk  environment of  the  Northwest 
Territories of Canada. The Company is  the fourth largest diamond producer  by 
value  globally   and   the  largest   diamond   mining  company   by   market 
capitalization, listed on the Toronto and New York Stock Exchanges.

The Company operates the Ekati Diamond Mine through its 80% ownership as  well 
as  a  58.8%  ownership  in  the  surrounding  areas  containing   prospective 
resources.  It  also sells  diamonds  from its  40%  ownership in  the  Diavik 
Diamond Mine.

For more information, please visit www.ddcorp.ca

Forward-Looking Information

Information  included  herein  that  is  not  current  or  historical  factual 
information, including information about estimated mine life,  and other plans
regarding mining activities at the Ekati Diamond Mine, estimated reserves  and 
resources at, and production from,  the Ekati Diamond Mine, projected  capital 
and operating costs,  future diamond prices,  and the estimated  value of  the 
Ekati Diamond Mine, may  constitute forward-looking information or  statements 
within the meaning of applicable securities laws. Forward-looking  information 
is based on  certain factors  and assumptions regarding,  among other  things, 
mining, production,  construction  and  exploration activities  at  the  Ekati 
Diamond Mine, mining methods, currency exchange rates, required operating  and 
capital costs, labour and fuel costs, world and US economic conditions, future
diamond prices, and the level of worldwide diamond production. Actual  results 
may vary from  the forward-looking  information. 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 we currently expect. These
factors  include,  among  other  things,   the  uncertain  nature  of   mining 
activities, including  risks  associated  with  underground  construction  and 
mining operations, risks associated with the location of and harsh climate  at 
the Ekati Diamond Mine site, fluctuations in diamond prices and changes in  US 
and world economic  conditions, risks relating  to the price  of fuel and  the 
availability and  cost of  labour for  the  Ekati Diamond  Mine, the  risk  of 
fluctuations in  the  Canadian/US  dollar  exchange rate,  as  well  as  risks 
associated with regulatory  requirements. Readers are  cautioned not to  place 
undue importance on forward-looking information,  which speaks only as of  the 
date of this disclosure, and should not  rely upon this information as of  any 
other date. 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, further  events or otherwise  at any  particular 
time, except as  required by  law. Additional  information concerning  factors 
that may  cause  actual  results  to materially  differ  from  those  in  such 
forward-looking statements is contained in the Company's filings with Canadian
and United  States  securities regulatory  authorities  and can  be  found  at 
www.sedar.com and www.sec.gov, respectively.

INTRODUCTION

Dominion Diamond  Corporation (the  "Company") is  a Canadian  diamond  mining 
company with ownership interests in two  of the world's most valuable  diamond 
mines. The  Company supplies  rough diamonds  to the  global market  from  its 
controlling interest in the Ekati Diamond Mine, and its 40% ownership interest
in the Diavik  Diamond Mine, both  located approximately 300  km northeast  of 
Yellowknife in  the Canada's  Northwest  Territories. Dominion  Diamond  Ekati 
Corporation, a wholly-owned subsidiary of the Company, is the operator of  the 
Ekati Diamond Mine.

Unless otherwise specified, all financial information is presented in Canadian
dollars, on a 100% basis.

The Ekati Diamond Mine was acquired by the Company from BHP Billiton on  April 
10, 2013. The Ekati Diamond Mine consists of the Core Zone, which includes the
current operating mine and  other permitted kimberlite pipes,  as well as  the 
Buffer Zone, an adjacent area hosting kimberlite pipes having both development
and exploration potential.  The Core  Zone Joint Venture  is held  80% by  the 
Company and  10%  each  by Dr.  Charles  Fipke  and Dr.  Stewart  Blusson.  It 
encompasses 176  mining leases,  totalling  173,024 ha,  and hosts  111  known 
kimberlite occurrences including the Koala, Koala North, Fox, Misery,  Pigeon, 
and Sable kimberlite  pipes. The  Buffer Joint Venture  is held  58.8% by  the 
Company, 10%  by Dr.  Charles Fipke,  and  31.2% by  Archon Minerals  Ltd.  It 
contains 106 mining leases covering 89,151.6 ha, and hosts 39 known kimberlite
occurrences including the Jay and Lynx kimberlite pipes.

The Ekati  Diamond Mine  is located  near Lac  de Gras,  approximately 300  km 
northeast of  Yellowknife  and  200 km  south  of  the Arctic  Circle  in  the 
Northwest Territories of Canada. This area is within the Canadian  sub-arctic; 
cold winter  conditions  predominate  for  the  majority  of  the  year,  with 
approximately  five  months  of  spring/summer/fall  weather  each  year  when 
day-time temperatures  are above  freezing.  Mining activities  are  conducted 
year-round.

Road access  to the  Ekati  Diamond Mine  is  by a  winter  ice road  that  is 
typically open for 8-10 weeks out of the year, from mid-January to late March.
The ice  road is  built  each year  as  a joint  venture  with the  two  other 
operating diamond mines  in the region,  the Diavik and  Snap Lake mines.  All 
heavy freight except emergencies is transported to the site by truck over  the 
ice road.  The  Ekati  Diamond Mine  has  an  all season  runway  and  airport 
facilities suitable to accommodate large aircraft. Air transport is used  year 
round for transport of all personnel to and from the site as well as light  or 
perishable supplies, and as required for emergency freight.

The discovery of  kimberlites in  the Lac  de Gras  region was  the result  of 
systematic heavy mineral sampling  over a ten year  period by prospectors  Dr. 
Charles E. Fipke and Dr. Stewart Blusson. By late 1989, Dia Met Minerals  Ltd. 
was funding the programs and began staking mineral claims in the region. After
making significant indicator mineral finds in the area, Dia Met approached BHP
as a potential partner. The Core Zone Joint Venture agreement between BHP, Dia
Met, Charles Fipke and Stewart Blusson was subsequently signed in August 1990.

The first diamond-bearing kimberlite  pipe on the  property was discovered  by 
drilling in 1991.  An Addendum to the Core Zone Joint Venture in October  1991 
gave BHP the right to acquire additional mineral claims within 22,500 feet  of 
the exterior boundaries of  the then property area.  The claims acquired as  a 
result became  the Buffer  Zone  Joint Venture  claims. To  date,  exploration 
activities have  included  till  sampling,  airborne  and  ground  geophysical 
surveys, and drill programs.   Approximately 350 geophysical and/or  indicator 
dispersion targets were drilled, with a total of 150 kimberlites discovered on
the Core Zone and  Buffer Zone properties.   The kimberlites were  prioritized 
using  microdiamond  and  indicator   mineral  chemistry.   Forty   kimberlite 
occurrences  were  subsequently  tested  for  diamond  content  using  reverse 
circulation drilling and/or  surface bulk  samples.  Significant  macrodiamond 
results were obtained on seventeen pipes. There has been no exploration of the
Ekati Project area for new kimberlites since 2007. Baseline environmental data
were collected throughout the NWT Diamonds Project area from 1993 to 1996.  In
1995, BHP  submitted its  Environmental  Impact Statement  (EIS) for  the  NWT 
Diamonds Project to  the Federally-appointed  Environmental Assessment  Review 
Panel.  After a comprehensive  review, the Government  of Canada approved  the 
development of the NWT Diamonds Project in November 1996.

In 1998, the  project was  renamed Ekati Diamond  Mine after  the Tlicho  word 
meaning "fat lake". Construction  of the mine began  in 1997, open pit  mining 
operations commenced in  August 1998,  and the Ekati  Diamond mine  officially 
opened on October 14, 1998. In 2011, a major milestone was reached when  Ekati 
achieved production  of  50  million  carats  of  diamonds.  Open  pit  mining 
operations commenced in August 1998 at  the Panda pipe, and continued  through 
June 2003.  Underground production from the Panda pipe began in June 2005  and 
completed in 2010.  The Panda kimberlite pipe is fully depleted.

The Koala  open  pit operation  commenced  in  2003 and  completed  in  2007.  
Underground production  from  the  Koala  pipe began  in  June  2007  and  the 
operation is  currently active.  The Koala  North underground  trial mine  was 
operated from  2003 to  2004.  Commercial  underground mining  at Koala  North 
began in 2010 and the operation is currently active.

The Misery open pit operation commenced in 2002 and completed in 2006. 
Production from Misery stockpiles continued to 2007.  Pre-stripping at Misery
for a pushback pit commenced in 2011 and the operation is active. The Fox open
pit operation commenced in 2005 and the operation is currently active. The
Beartooth open pit operation commenced in 2004 and completed in 2008.  The
Beartooth kimberlite pipe is depleted and the open pit is being used for fine
processed kimberlite tailings.

Table 1 summarizes the Ekati Diamond Mine's production history.

Table 1:  Production History of the Ekati Diamond Mine

                                             
                000's         000's         Grade
Fiscal Year     Metric        Carats        Carats per
                Tonnes        Recovered     tonne
                Processed
1999            1,565         1,230         0.79
2000            3,377         2,777         0.82
2001            3,199         2,800         0.88
2002            3,354         4,562         1.36
2003            4,310         5,424         1.26
2004            4,446         6,853         1.54
2005            4,595         4,522         0.98
2006            4,297         3,197         0.74
2007            4,539         4,030         0.89
2008            4,411         4,188         0.95
2009            4,762         4,026         0.85
2010            4,895         3,811         0.78
2011            4,692         3,133         0.67
2012            4,482         2,231         0.50
2013 H1         2, 024        760           0.38
TOTAL           58, 948       53, 543       0.91

Notes to Accompany Production History Table.
    
1. Fiscal year 1999 - 1 June, 1998 to 31 May, 1999.
2. Fiscal year 2000 - 1 June, 1999 to 30 June, 2000 (13 months).
3. Fiscal year 2001 onward from 1 July to 30 June to reflect BHP Billiton's
   fiscal year.
4. Fiscal year 2013 H1 reflects period from 1 July to 31 December 2012

The reserve and resource information set out herein, as well as all other
scientific and technical information set out herein, was prepared by or under
the supervision of Mats Heimersson, P. Eng., an employee of the Company and a
Qualified Person within the meaning of National Instrument 43-101. The Company
is currently in the process of preparing a technical report on the mineral
resources and mineral reserves at the Ekati Diamond Mine, pursuant to National
Instrument 43-101. The Company expects to file this technical report shortly.

Environment and Social Licence

Compliance with environmental requirements and agreements is reported publicly
on an annual basis  through various agencies such  as the Wek'eezhii Land  and 
Water Board and the Independent  Environmental Monitoring Agency. Version  2.4 
of the Ekati Mine Interim Closure and Reclamation Plan (ICRP) was approved  by 
the Wek'eezhii Land and Water Board in November 2011.  The amount of financial
security currently provided to government  for closure and reclamation of  the 
Ekati operation is  $126 million.   Additional payments would  be required  to 
cover development of the Sable  open pit.  The Company  has also posted a  $20 
million 'Environmental Guarantee' required  under the Environmental  Agreement 
and  a  $0.9  million  security  deposit  required  under  the  Fisheries  Act 
Authorizations, which are not specifically related to closure and reclamation.

Ekati provided an updated estimate  of reclamation security to the  Wek'eezhii 
Land and Water Board  in March 2013.  The  proposed security estimate is  $225 
million for  existing development  areas and  Pigeon, plus  an additional  $10 
million to be provided in future at least 60 days prior to construction at the
Sable open pit.   Regulatory review of  the updated security  estimate by  the 
Wek'eezhii Land and Water Board and other governmental agencies was  initiated 
in April 2013, and no final determination as to the final monetary amounts for
the security payments has been made to date.

Drilling and Sampling

Core drilling using diamond-tipped tools is used to define the pipe  contacts, 
wall-rock  conditions,  and  internal  geology  but  is  not  used  for  grade 
estimation.   Core  drilling   is  also  used   to  obtain  geotechnical   and 
hydrogeological data.   In  the  kimberlite  deposits  with  declared  mineral 
resources, a total of 786 diamond drill holes (139,540 m) were completed.

Diamonds  for  grade  estimation  and   valuation  are  obtained  by   reverse 
circulation (RC) drilling and/or by bulk  sampling in underground or open  pit 
bulk sample mines.  Samples are processed using an on-site sample plant.   For 
the kimberlite pipes with declared mineral resources, a total of 289 RC  holes 
(62,653 m) were completed.

Conventional concepts  of sample  preparation and  analysis do  not  generally 
apply to  diamond-bearing kimberlite  deposits.  Diamonds  from large  samples 
must  be  physically  separated  from  their  host  rock  and  described   and 
evaluated.   To  accomplish  that,  bulk  samples  from  RC  drilling   and/or 
underground/surface operations, must be  processed and the diamonds  liberated 
and collected using a  sample plant facility.   Sample plants are  essentially 
scaled down process plants designed to handle  a few tonnes to tens of  tonnes 
per hour.

Bulk sampling and RC sampling provide information on the size distribution and
value of the diamonds  in a pipe.  The  underground exploration drift  samples 
(used at Fox, Panda and Koala) yielded large diamond parcels (more than  2,000 
carats) for valuation purposes and, due  to the large individual sample  sizes 
(ca. 40 to  70 tonnes  each) and  close spacing  of samples  (typically 3  m), 
provided key  data  on  the  effect  of  increased  sample  support  on  grade 
statistics and on spatial continuity  of diamond grades.  During RC  drilling, 
an initial 100 to 200 tonne sample  (total of drill hole interval samples)  is 
taken from each prioritized  kimberlite pipe and,  if encouraging results  are 
obtained,  more  extensive  sampling  campaigns  are  undertaken  to   provide 
sufficient  grade  and  diamond  value  data  to  support  classification   of 
resources.  The density  and spatial  distribution of RC  drill holes  between 
pipes varies considerably and  depends on a number  of factors including  pipe 
size, geologic  complexity  and  grade characteristics  relative  to  economic 
cut-offs.

Diamond Price

The diamond value  is estimated  for each  size cut-off  using exploration  or 
production sample parcels and process plant partition curves and is  validated 
using recent sales prices  achieved by the prior  operator BHP Billiton.   The 
average diamond value  (diamond reference  value) is estimated  for each  pipe 
(and  in  some  cases  multiple  geological  domains  within  a  pipe)   using 
exploration and/or production  parcels ranging  in size  from several  hundred 
carats to tens of thousands of carats.  These diamond parcels have been valued
on both Ekati's price book (prior  to transaction) and on the Company's  price 
book and are adjusted for current market conditions.

Using the  diamond  reference  values  from  the  exploration  and  production 
parcels, the current diamond  recovery profile of  the Ekati processing  plant 
and prices from  Ekati's December  2012 rough  diamond sale,  the Company  has 
modeled the approximate rough  diamond price per carat  for each of the  Ekati 
kimberlite types, shown in  Table 2.  For  the purposes of  this model it  has 
been assumed that there is a 2% per annum real price growth during the life of
the mine excluding the current year in which pricing is assumed to be flat.

Table 2: Diamond Reference Value Assumptions as at 31, Dec 2012

                                                 
Joint Venture      Kimberlite     US$/carat     Recovery %
Agreement Area     Type           @1.2 mm       @1.2 mm
Core Zone          Koala Ph5      $358          93%
                   (RVK)
                   Koala Ph6      $415          95%
                   (VK)
                   Koala Ph7      $422          97%
                   (VK/MK)
                   Koala N.       $435          96%
                   (RVK/VK)
                   Fox TK         $312          95%
                   Misery RVK     $112          88%
                   Pigeon RVK     $217          88%
                   Pigeon MK      $195          83%
                   Sable          $140          79%
                   RVK/VK
Buffer Zone        Jay RVK/VK     $74           85%
                   Lynx           $257          86%
                   RVK/VK

Notes to Accompany Diamond Reference Value Table.
1.  RVK means re-sedimented volcaniclastic kimberlite; VK means volcaniclastic
    kimberlite; MK means magmatic kimberlite and TK means transitional
    kimberlite.
2.  Diamond price is based upon the diamonds that would be recovered by the
    current Ekati process plant that uses a 1.2 mm slot screen size cut-off.
3.  The recovery factor is the adjustment that is applied to the resource
    grade that is based on a slot screen size cut-off of 1.0 mm to make it
    equivalent to the grade that would be recovered by the current Ekati
    process plant which uses a 1.2 mm slot screen size.

Mineral Resource Estimates

Mineral resources  are estimated  for  the Koala,  Koala North,  Fox,  Misery, 
Pigeon, Sable, Jay and Lynx kimberlite pipes.

Mineral resource estimation consists of development of appropriate  geological 
and domain models, using  drill data.  Geophysical imaging  is used to aid  in 
modelling shape and size of  the deposits at and  near surface for pipes  that 
are not in production; as-mined outlines  or contact points are used to  guide 
the modelling process  where production  is underway.   Domain boundaries  are 
assumed to be  smooth planar  contacts and  are adjusted  based on  geological 
data.  In the case of  internal dilution (e.g. granitic xenoliths),  automated 
modelling has been used, assuming sub-rounded, horizontal shapes.

Statistical and  geostatistical  analyses  of  grade,  density,  and  moisture 
content are  performed  to  ensure  that  the  defined  internal  domains  are 
appropriate to these  properties.  Contact  analysis is used  to support  both 
hard and soft boundaries.   If appropriate, capping can  be used to limit  the 
influence of grade outlier and large stones.  Block sizes depend on the mining
method and deposit, and range from 5 x 5 x 5 m to 20 x 20 x 30 m in size.  The
maximum  extrapolation  distances   used  in  interpolation   vary  for   each 
deposit/domain, and are assessed through variography.

All data  are compiled  in  a Vulcan  block  model (.bmf).   Typically,  model 
interpolation is performed using ordinary kriging or, alternatively, the  data 
are simulated.  When simulated, 100 equally probable realizations were created
and the average  of these realizations  (e-type) was used  as the block  model 
estimate.  The models were validated using histograms, a series of swath plots
in all three dimensions, cross validation, comparing pairs of estimated grades
to composite drill holes grades, and visual comparisons across the pipe.

Drill  spacing   studies   were   conducted  to   support   mineral   resource 
classification  confidence   category   assignments.    Drill   hole   spacing 
classification is as follows unless otherwise specified:

Measured - less than 30 m to nearest sample;

Indicated - less than 60 m to nearest sample;

Inferred - less than 90 m to nearest sample.

In certain  deposits, such  as Koala,  kriging variance  may also  be used  to 
support classification categories.  Ekati employs a scorecard rating system to
systematically  evaluate  kimberlite  model  parameters  and  assign  resource 
classification.  The scorecard system extends  the grade point distance  based 
classification based on  a workshop rating  of key model  data sets  including 
volume, grade,  internal geology  and diamond  valuation.  It  also  considers 
other  criteria  such  as   tenure  status,  processing  characteristics   and 
geotechnical and hydrogeological factors.

Kimberlite value  (US$/tonne) is  equal to  average grade  (carats per  tonne) 
multiplied by  average  diamond value  (US$/carat)  multiplied by  a  recovery 
factor.  For the Ekati mineral resources, a slot screen size cut-off of 1.0 mm
is used and a 100% recovery factor is assumed.

Conceptual pit designs for  open cut Mineral  Resources (Fox, Misery,  Pigeon, 
Sable, Jay and Lynx) were completed using Whittle shell analysis.   Parameters 
used in pit  shell analysis  varied by  kimberlite, and  ranges included;  pit 
slope angles  40-80  degrees,  mining  costs  $5-8/wet  metric  tonnes  (wmt), 
processing costs $16-26/dry  metric tonnes  (dmt) and  G&A costs  $17-29/dmt.  
Diamond valuations were those indicated in Table 2.

Conceptual underground designs for Koala North were based on a sub level
retreat mining method utilising 20m sub levels and $38-63/dmt operating cost. 
Conceptual underground designs for Koala were based on a sub level cave mining
method utilising 20 m sub levels and $38-63/dmt operating cost.  Conceptual
underground designs for Fox were based on a 130m deep block cave mining method
and $50-84/dmt operating cost.  Underground operating costs vary by elevation
within the underground mines.  Diamond valuations used were those indicated in
Table 2.

The classification of stockpiles is  based on the resource classification  for 
each source.  Active  stockpiles were  surveyed at  the end  of the  effective 
period, 31^st December  2012.  Fox crater  domain kimberlite and  Run of  Mine 
stockpiles are included in the 2012 stockpile estimates.

Mineral Resource Statement

Mineral resources take into account geologic, mining, processing and  economic 
constraints, and have been defined within a conceptual underground mine design
or  a  conceptual  open  pit  shell.   Depletion  has  been  included  in  the 
estimates.  No Measured mineral resources are reported.

Mineral  resources  are  reported  inclusive  of  mineral  reserves.   Mineral 
resources that  are not  mineral reserves  do not  have demonstrated  economic 
viability. Mineral resources are reported effective 31 December 2012 on a 100%
basis.  Mineral resource estimates are presented in Table 3.

Table 3: Mineral Resource Statement by Kimberlite Pipe - December 31, 2012

                                                                              
Classification     Joint         Kimberlite     Tonnes         Grade     Carats
                   Venture       Pipe           (millions)     (cpt)     (millions)
                   Agreement
                   Area
Indicated          Core Zone     Koala UG          7.4          0.6         4.5
                                 Koala N UG        0.3          0.6         0.2
                                 Fox OP            10.3         0.2         2.5
                                 (+140 RL)
                                 Fox UG            20.2         0.3         6.1
                                 (-140 RL)
                                 Misery            3.7          4.5         16.8
                                 Pigeon            10.6         0.5         4.9
                                 Sable             15.4         0.9         13.3
                                 Stockpiles        0.1          0.6         0.05
                                                                          
Subtotal                                           68.2         0.7         48.4
Indicated
(Core Zone
only)
                   Buffer        Jay               36.2         2.2         78.1
                   Zone
                                 Lynx              1.3          0.8         1.0
                                                                          
Subtotal                                           37.5         2.1         79.1
Indicated
(Buffer Zone
only)
Inferred           Core Zone     Koala UG          0.3          1.0         0.3
                                 Koala N UG        0.2          0.6         0.1
                                 Fox OP            1.1          0.3         0.3
                                 (+140 RL)
                                 Fox UG            5.6          0.3         1.7
                                 (-140 RL)
                                 Misery            0.8          2.9         2.3
                                 Pigeon            0.8          0.5         0.4
                                 Sable              -            -           -
                                 Stockpiles        6.6          0.2         1.0
                                                                          
Subtotal                                           15.3         0.4         6.1
Inferred
(Core Zone)
                   Buffer        Jay               9.5          1.4         12.9
                   Zone
                                 Lynx              0.1          0.8         0.1
                                                                          
Subtotal                                           9.6          1.3         13.0
Inferred
(Buffer Zone)

Notes to Accompany Mineral Resource Table.

1.  Mineral resources have an effective date of 31 December 2012. The
    resources estimate was prepared under the supervision of Mats Heimersson,
    P. Eng., an employee of the Company and a Qualified Person within the
    meaning of National Instrument 43-101.
    Mineral resources are reported on a 100% basis. The Company has an 80%
2.  participating interest in the Core Zone Joint Venture and a 58.8%
    participating interest in the Buffer Zone Joint Venture.
3.  Mineral resources are inclusive of mineral reserves.
4.  Mineral resources that are not mineral reserves do not have demonstrated
    economic viability.
5.  Mineral resources are reported at +1.0 mm (diamonds retained on a 1.0 mm
    slot screen).
6.. Mineral resources have been classified using a rating system that
    considers drill hole spacing, volume and moisture models, grade, internal
    geology and diamond valuation, mineral tenure, processing characteristics
    and geotechnical and hydrogeological factors, and, depending on the pipe,
    may also include kriging variance.
7.  Mineral resources amenable to open pit mining methods include Fox OP,
    Misery, Pigeon, Sable, Jay and Lynx. Conceptual pit designs for open cut
    mineral resources (Fox, Misery, Pigeon, Sable, Jay and Lynx) were
    completed using Whittle shell analysis.  Parameters used in pit shell
    analysis varied by kimberlite and ranges included; pit slope angles 40-80
    degrees, mining costs $5-8/wmt, processing costs $16-26/dmt and G&A costs
    $17-29/dmt.
8.  The Fox mineral resources are divided by elevation (RL, m above sea level)
    between open pit and underground mining methods.
9.  Mineral resources amenable to underground mining methods include Koala,
    Koala North and Fox UG. Conceptual underground designs for Koala North
    were based on a sub level retreat mining method utilising 20m sub levels
    and $38-63/dmt operating cost.  Conceptual underground designs for Koala
    were based on a sub level cave mining method utilising 20m sub levels and
    $38-63/dmt operating cost.  Conceptual underground designs for Fox were
    based on a 130m deep block cave mining method and $50-84/dmt operating
    cost.  Operating costs vary by elevation within the deposits.
10. Stockpiles are located near the Fox open pit and were mined from the
    uppermost portion of the Fox open pit operation (crater domain
    kimberlite).  Minor run of mine stockpiles (underground and open pit) are
    maintained at or near the process plant and are available to maintain
    blending of kimberlite sources to the plant.
11. Tonnes are reported as millions of metric tonnes, diamond grades as carats
    per tonne (cpt), and contained diamond carats as millions of contained
    carats.
12. Tables may not sum as totals have been rounded in accordance with
    reporting guidelines.

Factors which  may  affect  the Mineral  resource  estimates  include: diamond 
valuation assumptions, changes  to the  methodology used  to estimate  diamond 
carat content, mining methods, geotechnical and geological interpretation, and
the  effect  of  different  sample-support  sizes  between  RC  drilling   and 
underground sampling.

Mineral Reserve Estimates

Mineral reserve  declaration  is  based on  Indicated  mineral  resources  and 
supported by either an  internal pre-feasibility-level or a  feasibility-level 
study.  Mineral  reserves were  estimated  for the  Koala, Koala  North,  Fox, 
Misery and Pigeon pipes, and active stockpile materials. Koala is mined as  an 
incline cave, similar to a block cave,  while Koala North is extracted by  sub 
level retreat. The Fox open  pit is currently active;  the Misery open pit  is 
undergoing a pushback.  Mining has not  yet commenced at the Pigeon pit.   The 
Panda, Koala, and Beartooth open pits are mined out.  The Panda underground is
also fully depleted.

Geotechnical parameters used during open  pit mine design include inter  ramp, 
and inter bench angles,  structural domains determined  from wall mapping  and 
geotechnical  drilling.   Underground  geotechnical  considerations  are  more 
focused on ground support, and monitoring of ground movement.

There are no  grade control  programs.  However, grade  verification of  block 
models is carried  out periodically by  collecting and processing  run-of-mine 
underground and  open pit  development samples  (typically 50  tonnes  each).  
Generally all kimberlitic material within the resource models is considered to
be economic,  and is  either  processed directly  or stockpiled  for  possible 
future processing.

Koala underground assumed overall dilution of 4% and 87% of mining  recovery.  
Koala North underground assumed no dilution and full recovery of kimberlite by
physical sorting of any waste material..

Fox open cut assumed dilution of 7%  waste and mining recovery of 96%  diluted 
material including internal dilution from entrained granite xenoliths.  Misery
open cut  design assumed  dilution of  4%  waste and  mining recovery  of  98% 
diluted material.  Pigeon  open cut design  assumed dilution of  6% waste  and 
mining recovery of 98% diluted material.

Recovery factors are applied based on parameters established during evaluation
of recovered diamonds collected  from bulk samples, and  are specific to  each 
kimberlite deposit and contained geologic domain.  The process plant currently
uses 1.2 mm  slotted de-grit screen  sizes so that  diamonds smaller than  the 
lower screen size cut-off are generally not recovered.  For the Ekati  mineral 
reserves, a slot screen size cut-off of 1.2 mm is applied (de-grit slot screen
used in the current Ekati process  plant) using deposit specific diamond  size 
data and partition curves modelling actual recovery of the current circuit.

Mineral Reserve Statement

Mineral reserve estimates are based  on material classed as indicated  mineral 
resources.  Consideration  of  the environmental,  permitting,  legal,  title, 
taxation,  socio-economic,  marketing  and   political  factors  support   the 
declaration of mineral reserves. Mineral reserves have an effective date of 31
December 2012.   Mineral reserves  are  summarized in  Table 4  by  kimberlite 
pipe.  No Proven mineral reserves have been declared.

Table 4:  Mineral reserves Statement - December 31, 2012

                                                                          
                   Joint                                                
Classification     Venture       Kimberlite     Tonnes         Grade     Carats
                   Agreement     Pipe           (millions)     (cpt)     (millions)
                   Area
Probable           Core Zone     Koala UG       5.8            0.6       3.6
                                 Koala N UG     0.3            0.6       0.2
                                 Fox OP         4.7            0.2       1.1
                                 Misery OP      3.0            4.0       12.2
                                 Pigeon OP      6.7            0.4       2.6
                                 Stockpiles     0.1            0.5       0.04
Total Probable                                  20.6           1.0       19.6

Notes to Accompany Mineral Reserve Table.

1. Mineral reserves have an effective date of 31 December 2012. The reserves
   were prepared under the supervision of Mats Heimersson, P. Eng., an
   employee of the Company and a Qualified Person within the meaning of
   National Instrument 43-101.
2. Mineral reserves are reported on a 100% basis
3. The mineral reserves are located entirely within the Core Zone Joint
   Venture area. (DDC is operator and has an 80% participating interest)
4. Mineral reserves are reported at +1.2 mm (diamonds retained on a 1.2 mm
   slot screen).
5. Mineral Reserves that will be, or are mined using open pit methods include
   Fox, Misery, and Pigeon.  Mineral Reserves are declared using the following
   assumptions: Fox open cut assumed dilution of 7% waste and mining recovery
   of 96% diluted material including internal dilution from entrained granite
   xenoliths.  Misery open cut design assumed dilution of 4% waste and mining
   recovery of 98% diluted material.  Pigeon open cut design assumed dilution
   of 6% waste and mining recovery of 98% diluted material.
6. Mineral Reserves that are mined using underground mining methods include
   Koala and Koala North.  Mineral Reserves are declared using the following
   assumptions: Koala underground assumed overall dilution of 4% and 87%
   mining recovery of diluted material.  Koala North underground assumed full
   recovery of kimberlite by the physical sorting of any waste material.
7. Stockpiles are minor run of mine stockpiles (underground and open pit) that
   are maintained at or near the process plant and are available to maintain
   blending of kimberlite sources to the plant.
8. Tonnes are reported as metric tonnes, diamond grades as carats per tonne,
   and contained diamond carats as millions of contained carats.
9. Tables may not sum as totals have been rounded in accordance with reporting
   guidelines.

Factors which may affect the  mineral reserve estimates include diamond  price 
assumptions; grade model assumptions, underground  mine design, open pit  mine 
design, geotechnical, mining and process plant recovery assumptions, practical
control of  dilution, changes  to  capital and  operating cost  estimates  and 
variations to the permitting, operating or social license regime  assumptions, 
in particular if permitting parameters are modified by regulatory  authorities 
during permit renewals.

Open Pit Mining

Open pit production  at Ekati is  currently from  the Fox pit  which has  been 
producing since 2005.  Phase 1 of the  Misery open pit was completed in  2004, 
and currently  waste stripping  is underway  for a  second phase  of open  pit 
mining at Misery pit.  A feasibility study for the Pigeon pipe open pit is  in 
progress and mining by open pit methods is planned.

Dewatering of lake systems  that have developed over  the kimberlite pipes  is 
generally required prior to commencement  of open pit mining activities.   The 
roughly  circular  open  pits   are  mined  using  conventional   truck-shovel 
operations and are developed in benches that  are typically 10 or 15 m  high.  
The open pits at  Ekati are relatively small.   Overall pit wall slopes  range 
between 45-52º ^ in  waste and 35-37º in  kimberlite.  Phased mining has  been 
used at the Fox pipe, but is not widely applied at Ekati due to the small  pit 
sizes.  A  single  circular access  ramp  around the  perimeter  of a  pit  is 
developed progressively as the benches are  mined.  Waste rock is hauled to  a 
designated waste rock storage area and dumped to an engineered design.  Ore is
hauled directly to the process plant.

Mined kimberlite  is  hauled  directly  from  the  open  pit  benches  at  Fox 
approximately 11 km to  the Ekati process  plant.  In the  case of the  Misery 
open pit, the kimberlite from  the pit will be dumped  on a transfer pad,  and 
then loaded into haulage trucks for transport 29 km to the process plant.

The open pit mobile equipment fleet includes two rotary blast hole drills, two
diesel hydraulic DTH hammer drills, one diesel hydraulic shovel and two diesel
hydraulic excavators for truck loading, and a haulage fleet of two 170 t,  and 
twenty-three 100  t capacity  rigid-body trucks.   A fleet  of 80  t  capacity 
haulage trucks will be used for the 29 km ore haul from the Misery pit.   Four 
of these  trucks are  now on  site.   In addition,  the surface  mobile  fleet 
includes over 90 units of support equipment.

The planned  open pit  for  Pigeon will  require additional  mining  equipment 
including blast hole and hammer drills, diesel hydraulic excavator, dozers and
loaders. It is anticipated  that the existing haulage  fleet will be  deployed 
for ore  and waste  rock movement.  The haulage  distance from  Pigeon to  the 
process plant is 5km.

Underground Mining

The Koala mine was developed with  sublevels spaced 20 m apart vertically  and 
5 m x 5  m drawpoints on  a 14.5 m  spacing (centre to  centre).  The  highest 
elevation production sublevel is located  at 2050L, approximately 160 m  below 
the base of the former Koala open pit.  Ore production from the drawpoints  is 
a combination of the blasted kimberlite  and caved kimberlite that lies  above 
the blasted zone through to the pit.   As production proceeds, the top of  the 
cave zone below  the pit is  constantly being  drawn down, and  the level  and 
profile of the  surface expression  of the  cave zone  is closely  monitored.  
Below sublevel 1970L the mine transitions  to an incline cave with the  lowest 
production level located at 1810L.

The Koala North  mine is a  sub level retreat  operation with 20  m sub  level 
spacing.  Drawpoints are 4.6  m x 4.6 m  on a 16 m  centre to centre  spacing. 
Drawpoints are offset between  levels to ensure  ground stability and  maximum 
draw.

Kimberlite is transported from the mines via a 1.37 m (54 inch) wide  conveyor 
system hung via chain from the back of the conveyor ramp. The system  consists 
of four main underground conveyor sections plus a surface "stacker"  conveyor, 
with a transfer arrangement between each conveyor.  All production mucking  is 
carried out using load haul dump  (LHD) vehicles, tramming to the remuck  bays 
or loading 45 t  capacity diesel haulage  trucks.  Ore is  dumped into an  ore 
pass system, and fed to  a 500 tph primary  mineral sizer before loading  onto 
the 2.4 km long conveyor system from Koala to the process plant.  On  surface, 
the radial stacking conveyor discharges to an 8,000 t surface stockpile.

Process Recovery

The metallurgical  process  is conventional  for  the diamond  industry.   The 
current nominal production  rate for Ekati  main process plant  is 13,300  dry 
tonnes per day.  Heavy media separation (MS) and X-ray are the primary methods
of extracting diamonds from  processed kimberlite.  Kimberlite processing  and 
diamond recovery at Ekati involves:

  * Primary crushing - redundancy with primary, secondary and reclaim sizers
  * Stockpile - used as a buffer between plant and crushing
  * Secondary crushing (cone crusher)
  * Washing (degritting)
  * Heavy media separation
  * Recovery

       * Wet high intensity magnetic separation
       * Wet X-ray sorting
       * Drying
       * Dry single particle X-ray sorting
       * Grease table

  * Diamond concentrate sorting, sieving and preparation for transport to the
    sorting and valuation facility in Yellowknife

Infrastructure

Ekati is an operating  mine and key infrastructure  on site includes the  open 
pits, underground mines,  sample and  process plants, waste  rock storage  and 
tailings storage facilities, buildings (mobile and permanent), pipelines, pump
stations, electrical systems, quarry site, camp pads and laydowns, ore storage
pads, roads, culvert  and bridges, airstrip,  helipad, and mobile  equipment.  
There is minimal  additional infrastructure  expected to be  required for  the 
Pigeon  open  pit   due  to  its   close  proximity  to   the  central   Ekati 
infrastructure.

Deposition of  fine  processed  kimberlite  into  one  of  the  four  licensed 
containment cells within the Long Lake Containment Facility will be  completed 
in  2013  rendering  this  area  available  for  reclamation  field   trials.  
Deposition will  continue to  2018  into two  cells  that have  been  utilized 
throughout operations.  The fourth licenced  deposition area is not  currently 
planned to  be used  except as  contingency or  for future  developments.   In 
addition, the  mined-out Beartooth  pit  has been  used  since late  2012  for 
processed  kimberlite  containment.  The   containment  cell  expansions   and 
Beartooth pit will provide  capacity to 2018 with  the mined-out Panda,  Koala 
and Fox pits  available to  provide additional  capacity beyond  that date  if 
required.

Capital and Operating Cost Estimates

The prior operator of Ekati  had a financial year  ending June 30th.  All  the 
financial information is shown on a financial  year end of June 30th with  the 
six month period of January 2013 to June 2013 shown as 2H 2013.

Table 5 shows currently estimated sustaining and mine development capital from
2013  onward.   The   costs  shown  include   estimated  contingencies   where 
applicable, but does not  include any escalation  or risk contingency  amounts 
for unforeseen  events.  In addition  to  ongoing equipment  replacements  and 
general  operational  upgrades,  sustaining   capital  will  include   certain 
categories of ongoing  underground excavation to  maintain mining advances  to 
increasing depths.

Table 5  includes costs  associated with  the development  of the  Misery  and 
Pigeon pipes.  The total  current  estimated capital  cost of  developing  the 
Misery pipe is $385 million consisting largely of mining costs to achieve  ore 
release, and of which  $145 was spent  by end of  December 2012.  The  current 
estimated cost for developing the Pigeon project is $78 million which includes
the construction  of access  roads,  and pre-stripping  of waste  material  to 
prepare the pit for production and contingency.

Table 5 also shows currently estimated operating costs based on the  Company's 
operating experience, adjusted to present-day dollar terms.  Given the  remote 
location of  the  Ekati  Diamond  Mine,  a  large  portion  of  the  operating 
expenditure is fixed,  with the major  cost items being  labour and fuel  (for 
both power and equipment).

Marketing costs, private  royalties and  estimated reclamation  costs are  not 
shown in Table 5. These are  included separately in the economic analyses  set 
out below. The reclamation costs are based on Ekati's closure cost model  that 
includes  all  activities  required  by  the  approved  Interim  Closure   and 
Reclamation Plan.

Table 5     Capital and Operating Costs - Ekati Diamond Mine (100% Basis)

                                                                 
                        CAPITAL COSTS                    OPERATING COSTS
           Developing     Sustaining       Total       Direct and Indirect
           $Millions      $Millions      $Millions          $Millions
2013H2        33             20             53                 187
 2014         125            34             159                374
 2015         129             8             137                210
 2016         32              8             40                 275
 2017          -              8              8                 450
 2018          -              8              8                 392
 2019          -              5              5                 257
Totals        319            91             410               2,145

Note: Total may not add up due to rounding.

Economic Analysis

Table 6 represents a cash flow model based only on Probable mineral  reserves, 
and is presented solely  to indicate the economic  viability of the  operation 
and it is not a forecast of expected future cash flows.  The Probable  mineral 
reserves in this cash flow model are sourced from the Fox, Koala, Koala North,
Misery and Pigeon kimberlite pipes.

The production forecast in  Table 6 is derived  from the Company's  estimates, 
based on  the  current reserves  as  of December  31,  2012. The  capital  and 
operating costs  that  are shown  in  Table 5  are  also based  on  the  prior 
operators estimates with the Company having applied its own economic  factors, 
such as exchange rates.

The Company sorts its rough diamonds  in Antwerp, Toronto, Canada and  Mumbai, 
India and then  distributes the  resulting sales  parcels to  its Belgium  and 
Indian subsidiaries for sale. The model  is based on production sales  revenue 
(assume that all diamonds are sold in the year of production). Marketing  cost 
of $17.7 million per annum is assumed based on Ekati's recent budget forecast.

Two royalties are payable.   One is to the  Federal Government, the second  is 
payable to a  third-party on  production from  the Misery  pipe.  The  Federal 
Government royalty payable is equal to the  lesser of 13% of the output  value 
or a sliding  scale royalty payable  on the actual  production value that  can 
range from  5%  for production  between  $10,000 and  $5  million to  14%  for 
production over  $45 million.   The Misery  royalty is  payable on  kimberlite 
production from  the  Misery  pipe  such that  C$18.76  per  tonne  mined  and 
processed is payable on the first 428,390 tonnes, and C$23.42 per tonne  mined 
and processed is payable on the next 544,000 tonnes.

The model is shown on  a financial year end of  June 30^th with the six  month 
period of January 2013 to June 2013  shown as 2H 2013.   These figures do  not 
include rough diamond  stocks at  the mine  at the  opening of  the year.   In 
addition, the model  does not take  into account any  rough diamond  inventory 
available for sale that the  Company held at the end  of its January 31,  2013 
financial year.

As a further analysis, based  on the cash flow  model, the sensitivity of  the 
Ekati Diamond Mine to changes in  various parameters can be demonstrated.  Net 
present value ("NPV") at a 7% real  discount rate is used as the indicator  to 
see the impact of  varying the diamond prices,  the grade, the capital  costs, 
the operating  costs  and  the  Canadian/US  dollar  exchange  rate.  For  the 
variables in the sensitivity analysis, a +/-10% change is applied. The  impact 
on NPV  (for the  expected life  of mine  cash flow  model) of  this level  of 
variance in selected variables is shown in Table 7.

Table 6: Cash Flow Model for Ekati Diamond Mine (100% Basis).

  Item                                   H2
                               TOTALS   FY13   FY14   FY15   FY16   FY17   FY18   FY19  FY20  FY21  FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36
                                                                                                                                                                              
                                                                                                                                                                              
  Waste  
  mined              Total       79.00   6.44  15.72  19.50  17.41   9.98   8.51   1.44                                                                                       
                                                                                                                                                                              
  Ore    
  mined              UG                                                                                                                                                       
                     Koala        5.84   0.14   0.80   1.07   1.19   1.09   0.92   0.62                                                                                       
                     Koala
                     North        0.29   0.17   0.11      -      -      -      -      -                                                                                       
                     OC                                                                                                                                                       
                     Fox          4.66   1.79   2.67   0.19                                                                                                                   
                     Misery       3.03      -      -      -   0.32   1.87   0.84                                                                                              
                     Pigeon       6.73      -      -      -   0.23   0.84   2.68   2.98                                                                                       
                     Total       20.55   2.11   3.59   1.26   1.75   3.79   4.45   3.60                                                                                       
                                                                                                                                                                              
  Grade              UG                                                                                                                                                       
                     Koala        0.61   0.78   0.62   0.59   0.51   0.55   0.69   0.76                                                                                       
                     Koala
                     North        0.57   0.58   0.55      -      -      -      -      -                                                                                       
                     OC                                                                                                                                                       
                     Fox          0.23   0.29   0.19   0.13      -      -      -      -                                                                                       
                     Misery       4.03      -      -      -   3.67   4.11   3.98      -                                                                                       
                     Pigeon       0.38      -      -      -   0.38   0.39   0.38   0.38                                                                                       
                                                                                                                                                                              
  Processing         Total
                     Tonnes
                     Processed   20.55   2.11   3.59   1.26   1.75   3.79   4.45   3.60                                                                                       
                     Total
                     Carats
                     Recovered   19.56   0.74   1.08   0.66   1.88   8.59   5.01   1.61                                                                                       
                                                                                                                                                                              
  Revenue                                                                                                                                                                     
        Average
        Price^1      US$ / ct          332.74 367.25 401.81 216.98 146.42 186.73 304.29     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
        Exchange
        Rate^2       US$ / C$            1.00   1.00   1.00   1.00   1.00   1.00   1.00  1.00  1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
        Cash Inflow    C$ M      4,203    453    396    265    407  1,257    936    489           -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
                                                                                                                                                                              
  Costs                                                                                                                                                                       
        Development
        Capital        C$ M        319     33    124    129     32      -      -      -     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
        Sustaining
        Capital        C$ M         91     20     34      8      8      8      8      5                                                                                       
        Total
        Operating
        Costs          C$ M      2,145    187    374    210    275    450    392    257     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
        Reclamation
        Costs^3        C$ M        435      -      1      -      -      -      0     25   148   133   54   10    5    4    7    6    5    6    6    6    6    4    2    2    7
        Marketing
        Costs^4        C$ M         93     10     17      8      8     17     17     17     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
        Increase
        (decrease)
        in Working
        Capital        C$ M                                                                                                                                                   
        Cash Outflow             3,083    250    549    356    324    475    417    303   148   133   54   10    5    4    7    6    5    6    6    6    6    4    2    2    7
                                                                                                                                                                              
  Net Cash Flow       
  before Taxes                   1,119    203  (153)   (91)     83    782    519    186 (148) (133) (54) (10)  (5)  (4)  (7)  (6)  (5)  (6)  (6)  (6)  (6)  (4)  (2)  (2)  (7)
                                                                                                                                                                              
  Tax^5                                                                                                                                                                       
        Territorial
        Taxation
        (11.5% of
        pre tax FCF)   C$ M        163     28      -      -      -     71     49     15     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
        NWT Mining
        Royalty
        (Average
        5.9% over
        life of
        mine)          C$ M        237      5      6      -      -     13    108     74    31     -    -    -                                                                 
        Federal
        Taxation
        (15% of post
        Royalty FCF)   C$ M        205     36      -      -      -     86     64     20     -     -    -    -    -    -    -    -    -    -    -    -    -    -    -    -    -
                                                                                                                                                                              
                                                                                                                                                                              
  Cash Flow                                                                                                                                                                   
        Revenue less
        Costs          C$ M        514    134  (160)   (91)     83    613    298     77 (179) (133) (54) (10)  (5)  (4)  (7)  (6)  (5)  (6)  (6)  (6)  (6)  (4)  (2)  (2)  (7)
                                                                                                                                                                              
                                                                                                                                                                              
  Net Present Value    C$ M
  at 7% discount
  rate                             460                                                                                                                                        
                                                                                                                                                                              
                                                                                                                                                                              
                                                                                                                                                                              
  (1)   Value by pipe weighted by production from each
        pipe.  2% real compound annual growth applied over
        time in the model.                                                                                                                                                    
        H2 FY13 comprises of first three months actuals plus three months forecast which includes all inventory on hand being sold prior to June                         
        30, 2013. FY14 and thereafter, revenue is based on all carats produced sold in that period                                                                            
  (2)   Assumes a
        constant
        parity rate
        through life
        of mine                                                                                                                                                               
  (3)   Detailed closure workplan prior to mine
        closure include exit packages for remaining
        mine employees                                                                                                                                                        
  (4)   Marketing costs based
        on FY14 budgeted
        diamond sorting and
        sales costs.                                                                                                                                                          
  (5)   Tax
        calcuation
        illustrative                                                                                                                                                          

Table 7:  Sensitivity Analysis - Ekati Diamond Mine (100% Basis)

                Financial Sensitivity   NPV   ($Million)
                   - 10%        Base Case       + 10%
Parameter          Change                      Change
Price                    268             460         656
Grade                    268             460         656
Capital Costs            483             460         438
Operating Costs          595             460         329
US$/C$ FX Rate           272             460         652

Mine Life

The current mine  plan assumes  production from  Fox, Misery  and Pigeon  open 
pits, and the Koala North and Koala underground operations.

Koala North is  currently in  production as  a sub  level retreat  underground 
operation and  is  scheduled  to  finish  in  2014.   Koala  is  currently  in 
production as  a  sublevel  /  inclined  cave  underground  operation  and  is 
scheduled to finish in 2019.  Fox is currently in operation as an open pit and
is scheduled  to finish  in October  2014.  Stripping  of waste  material  and 
satellite  kimberlite  is  in  progress  at  Misery  open  pit  with  expected 
production from the Misery Main Pipe in December 2015 and completion of mining
in 2018.  Stripping  of waste material  from Pigeon open  pit is scheduled  to 
commence in 2014 with mining of kimberlite commencing in 2015 and finishing in
2019.

The Misery  satellite  pipes which  will  be mined  during  the  pre-stripping 
operations for Misery Main Pipe have been assessed from bulk samples collected
during exploration programs. An exploration target has been estimated for  the 
Misery satellite pipes.  The Company cautions that the potential quantity  and 
grade of  the exploration  target  is conceptual  in  nature. There  has  been 
insufficient exploration  and/or study  to define  the exploration  target  as 
Mineral Resources it is uncertain if additional exploration will result in the
exploration target being delineated as Mineral Resources.  Recovered  diamonds 
displayed similar characteristics to the  Misery Main Pipe; however, there  is 
currently insufficient support  for grade  estimates to  allow for  estimating 
Mineral Resources.  As a consequence, the material is currently planned to  be 
stockpiled until  confirmatory  grade  testing  at the  sample  plant  can  be 
conducted.  The tonnage range is estimated to be between 2.7 Mt and 4.5 Mt  at 
a grade range of 1.0 cpt to 1.7 cpt.  Based on sample data from the  satellite 
pipes, and using the  Diamond Reference Value Assumptions  as at 31 Dec  2012, 
the diamond values could range between US$90 per carat and US$140 per carat.

Coarse reject  tails  have  been  stockpiled  at  Ekati  since  the  start  of 
production  in  1998  to  present.   Several  production  periods  have   been 
identified during  which high  grade  feed sources  were blended  through  the 
process plant using  coarser de-grit  screens (1.6  mm slot)  compared to  the 
current 1.2  mm  configuration. In  addition,  the re-crush  circuit  was  not 
utilised during these periods. The tonnage  range for the coarse reject  tails 
from the production periods of interest are estimated at 3.5 to 4.5 Mt.  Based
on stone size  distributions and recovered  grade data, this  material has  an 
overall grade  ranging from  0.2 to  0.6 carats  per tonne.   Based on  recent 
process plant audit parcel  valuations and diamond values  as at 31 Dec  2012, 
the diamond values  could range  from US$80 per  carat to  US$140 per  carat.  
While the historic recoveries and valuations may not necessarily be indicative
of recoveries or valuations within the current coarse reject tails stockpiles,
treatment of this material represents an attractive opportunity to  supplement 
mill feed.  A production test for grade and diamond recovery is planned to  be 
processed through the main plant later this calendar year.

Mineral resources that are not included in the current mine plan include Jay,
Lynx, Sable and Fox deep. Jay is considered the most significant prospect due
its large size and high grade (36.2 M tonnes of Indicated Mineral Resources at
an average grade of 2.2 carats per tonne) and represents upside potential for
the operation. A pre-feasibility study for Jay has not been initiated to date.
The Jay pipe deposit is located within the Buffer Zone Joint Venture property
beneath Lac du Sauvage, a moderate sized lake north of Lac de Gras, and is
approximately 1.2 km from the shoreline.  The area and shoreline close to the
Jay deposit is undeveloped except for the Misery pit and related
infrastructure (approximately 7 km to the southeast) and the main Ekati mine
infrastructure located approximately 30 km to the northwest.

The Misery satellite pipes and the coarse tailings, along with the Jay, Lynx,
Sable and Fox deep mineral resources represent future plant feed upside
potential, and some or all of this mineralization may be able to be
incorporated in the life-of-mine plan once sufficient additional work has been
undertaken to support estimation of higher-confidence mineral resources and
eventual conversion to mineral reserves.  There is also potential to treat
low-grade stockpiles, primarily derived from open pit mining at the Fox
kimberlite if the grades in the stockpiles can be demonstrated to be economic.

 

 

SOURCE Dominion Diamond Corporation

Contact:

Contacts:
Mr. Richard Chetwode, Vice President, Corporate Development - +44 (0)
7720-970-762 or rchetwode@ddcorp.ca

Ms. Kelley Stamm, Manager, Investor Relations - (416) 205-4380
or kstamm@ddcorp.ca
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