Dominion Diamond Corporation Reports Fiscal 2014 Second Quarter Results

   Dominion Diamond Corporation Reports Fiscal 2014 Second Quarter Results

PR Newswire

TORONTO, Sept. 4, 2013

TORONTO, Sept. 4, 2013 /PRNewswire/ - Dominion Diamond Corporation (TSX:DDC,
NYSE:DDC) (the "Company") today announced its second quarter results for the
period ending July 31, 2013.

Robert Gannicott, Chairman and Chief Executive Officer, commented, "We are
well pleased with the performance of our new acquisition, the Ekati Mine,
which has delivered an adjusted EBITDA margin of thirty percent for the
quarter. Grades and diamond sales are ahead of our purchase model while costs
are modestly lower. At Diavik the "Reshaping Diavik" initiative by Rio Tinto
has delivered cost savings and production increases compared with the current
mine plan. Diamond sales have exceeded expectations in a market place that has
held its ground during the last six months despite the financial troubles of
India and China. Looking to the future, we have already defined a concept for
the mining of the Jay Pipe with the potential to add 10 to 15 years of
production beyond the current Ekati Mine Plan."

Second Quarter Summary

  *Consolidated rough diamond sales from the Diavik and Ekati Diamond Mines
    for the second quarter were $261.8 million, resulting in an operating
    profit of $12.4 million.
  *The Diavik Diamond Mine generated gross margin of 25.1% and an EBITDA
    margin of 47% during the second quarter.
  *The Ekati Diamond Mine gross margin would have been 11% and the EBITDA
    margin would have been 30%, if the effect of the market value adjustment
    to inventory made as part of the acquisition was excluded.
  *Included in the consolidated net loss attributable to shareholders for the
    quarter was $5.4 million (after-tax) of restructuring costs at the
    Antwerp, Belgium office and $10.6 million (after-tax) of expenses relating
    to the cancellation of the credit facility that had been previously
    arranged for the acquisition of the Ekati Diamond Mine. Excluding these
    two items and the impact of the sale of opening acquisition inventory that
    was included at market value in the Ekati cost of sales, the Company's
    consolidated net profit attributable to shareholders for the quarter would
    have been $11.1 million or $0.13 per share.
  *Company recorded a consolidated net loss attributable to shareholders of
    $16.3 million or $(0.19) per share for the quarter.

Diavik Diamond Mine 

  *Production for the second calendar quarter at the Diavik Diamond Mine was
    1.6 million carats on a 100% basis.
  *During the second quarter, the Company sold approximately 0.7 million
    carats from the Diavik Diamond Mine for a total of $91.3 million for an
    average price per carat of $130.
  *At July 31, 2013, the Company had 0.5 million carats of Diavik Diamond
    Mine produced inventory with an estimated market value of approximately
    $65 million.

Ekati Diamond Mine

  *The Ekati Diamond Mine performed ahead of the Company's expectations for
    grade and diamond sales for the quarter, with modestly lower costs than
    expected. Production for the second calendar quarter at the Ekati Diamond
    Mine was 0.4 million carats on a 100% basis.
  *During the second quarter, the Company sold approximately 0.6 million
    carats from the Ekati Diamond Mine for a total of $170.5 million for an
    average price per carat of $289.
  *At July 31, 2013, the Company had 0.4 million carats of Ekati Diamond Mine
    produced inventory with an estimated market value of approximately $135
    million.
  *A detailed valuation study of opening inventory held at the time of the
    Ekati acquisition has determined that the inventory, which was valued at
    market prices as of April 10^th, had a value of $154 million, an increase
    of $19.4 million over the original estimate. This increased the amount of
    inventory available for sale in the second quarter. At the end of the
    second quarter, the Company had $15 million of this inventory remaining.
  *The Company has completed the restructuring of the additional sales and
    marketing premises that it acquired as part of the Ekati Diamond Mine, and
    has now integrated the marketing and sales operations for Ekati with those
    for Diavik into a single location.
  *A Project Description Report for the Lynx Pipe is expected to be submitted
    by the Company in mid-September as a precursor for the Jay project. The
    report for which will be filed in mid-October. The development of the Jay
    Pipe has the potential to add a further ten to fifteen years of production
    beyond the current Ekati mine plan.

Conference Call and Webcast

Beginning at 8:30AM (ET) on Thursday, September 5th, 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
web site at www.ddcorp.ca or by dialing 866-270-6057 within North America or
617-213-8891 from international locations and entering passcode 66211452.

An online archive of the broadcast will be available by accessing the
Company's 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, September
19th, 2013 by dialing 888-286-8010 within North America or 617-801-6888 from
international locations and entering passcode 15589624.

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

                                  Highlights
    (ALL FIGURES ARE IN UNITED STATES DOLLARS UNLESS OTHERWISE INDICATED)

Dominion Diamond Corporation, the ("Company") recorded a consolidated net loss
attributable to shareholders  of $16.3 million  or $(0.19) per  share for  the 
quarter, compared to a net profit attributable to shareholders of $4.8 million
or $0.06 per  share in the  second quarter of  the prior year.  Net loss  from 
continuing operations attributable to  shareholders (which now represents  the 
Diavik and  Ekati mining  segments) was  $16.3 million  or $(0.19)  per  share 
compared to a net profit from  continuing operations of $4.0 million or  $0.05 
per share in the comparable quarter  of the prior year. Continuing  operations 
includes all  costs related  to the  Company's mining  operations. Prior  year 
numbers relate only to results from  the Diavik Diamond Mine. Included in  the 
consolidated net loss attributable  to shareholders for  the quarter was  $5.4 
million (after-tax) of restructuring costs at the Antwerp, Belgium office  and 
$10.6 million  (after-tax) of  expenses  related to  the cancellation  of  the 
credit facilities that  had been  previously arranged in  connection with  the 
Ekati Diamond Mine Acquisition.  Excluding these two items  and the impact  of 
the sale of opening acquisition inventory that was included at market value in
Ekati  cost  of  sales,  the  Company's  estimated  consolidated  net   profit 
attributable to shareholders for the quarter would have been $11.1 million  or 
$0.13 per share.

Consolidated sales  from continuing  operations were  $261.8 million  for  the 
quarter compared to  $61.5 million  for the  comparable quarter  of the  prior 
year, resulting  in  an operating  profit  of  $12.4 million  compared  to  an 
operating profit of $8.9 million in the comparable quarter of the prior  year. 
Consolidated EBITDA from continuing operations  was $45.0 million compared  to 
$22.1 million in the comparable quarter of the prior year.

During the second quarter, the Company recorded sales from the Diavik  Diamond 
Mine of $91.3 million compared to  $61.5 million in the comparable quarter  of 
the prior year.  The Company sold  approximately 0.7 million  carats from  the 
Diavik Diamond Mine for an  average price per carat  of $130, compared to  0.4 
million carats  for an  average price  per  carat of  $142 in  the  comparable 
quarter of the prior year. The 62%  increase in volume of Diavik Diamond  Mine 
carats sold versus the comparable quarter of the prior year resulted primarily
from the  decision in  that prior  quarter to  hold some  Diavik Diamond  Mine 
inventory from all price ranges until stability returned to the rough  diamond 
market. The 9% decrease in the Company's achieved average rough diamond prices
for the Diavik Diamond  Mine as compared  to the second  quarter of the  prior 
year resulted primarily from the sale  during the second quarter of the  prior 
year of higher priced Diavik Diamond Mine goods that had originally been  held 
back by the Company in the first quarter of fiscal 2013 due to a then observed
imbalance in  the rough  and polished  diamond prices  for these  goods.  This 
segment generated gross margins and EBITDA margins of sales of 25.1% and  47%, 
respectively, compared  to  23.9% and  43%,  respectively, in  the  comparable 
quarter of the prior year.

During the second  quarter, the Ekati  Diamond Mine recorded  sales of  $170.5 
million and sold  approximately 0.6 million  carats for an  average price  per 
carat of $289. This segment generated gross margins and EBITDA margins of 2.6%
and 8%,  respectively. The  Company estimates  that gross  margins and  EBITDA 
margins would  have been  approximately 11.0%  and 30%,  respectively, if  the 
effect of the market value adjustment to  inventory made as part of the  Ekati 
Diamond Mine Acquisition was excluded.

The Corporate segment, which  includes all costs  not specifically related  to 
the operations of the  Diavik and Ekati mines,  recorded selling, general  and 
administrative expenses  of $13.0  million, compared  to $4.7  million in  the 
comparable quarter of the prior year. The increase from the comparable quarter
of the prior year was primarily due to $6.0 million of restructuring costs  at 
the Antwerp, Belgium office  related to the acquisition  of the Ekati  Diamond 
Mine on April 10, 2013.

                     Management's Discussion and Analysis

  PREPARED AS OF SEPTEMBER 4, 2013 (ALL FIGURES ARE IN UNITED STATES DOLLARS
                         UNLESS OTHERWISE INDICATED)

Basis of Presentation
The following is management's discussion and analysis ("MD&A") of the  results 
of operations for Dominion  Diamond Corporation for the  three and six  months 
ended July 31, 2013, andits financial position as at July 31, 2013. This MD&A
is based on the Company's  unaudited interim condensed consolidated  financial 
statements prepared in accordance with  IAS 34 "Interim Financial  Reporting", 
as issued by the International Accounting Standards Board, and should be  read 
in conjunction  with the  unaudited interim  condensed consolidated  financial 
statements and notes thereto for the three and six months ended July 31, 2013,
and the audited consolidated financial  statements for the year ended  January 
31, 2013. Unless otherwise specified,  all financial information is  presented 
in United  States  dollars.  Unless otherwise  indicated,  all  references  to 
"second quarter" refer to the three months ended July 31.

Caution Regarding Forward-Looking Information
Certain  information  included  in   this  MD&A  constitutes   forward-looking 
information within the meaning of Canadian and United States securities  laws. 
Forward-looking information can generally  be identified by  the use of  terms 
such as "may",  "will", "should", "expect",  "plan", "anticipate",  "foresee", 
"appears",   "believe",   "intend",   "estimate",   "predict",    "potential", 
"continue",  "objective",  "modeled",  "hope",  "forecast"  or  other  similar 
expressions concerning matters that are not historical facts.  Forward-looking 
information relates to management's future  outlook and anticipated events  or 
results, and can include statements or information regarding plans for mining,
development, production and  exploration activities at  the Company's  mineral 
properties, projected capital expenditure requirements, liquidity and  working 
capital  requirements,  expectations  concerning  the  diamond  industry,  and 
expected cost of sales and  cash operating costs. Forward-looking  information 
included in this MD&A includes the current production forecast, cost of  sales 
and cash cost of production estimates and planned capital expenditures for the
Diavik Diamond  Mine  and  other forward-looking  information  set  out  under 
"Diavik Operations  Outlook", and  the current  production forecast,  cost  of 
sales and cash cost of  production estimates and planned capital  expenditures 
for the Ekati Diamond Mine and other forward-looking information set out under
"Ekati Operations Outlook".

Forward-looking information  is  based  on  certain  factors  and  assumptions 
described below and elsewhere in this MD&A including, among other things,  the 
current mine plans for each of the  Diavik Diamond Mine and the Ekati  Diamond 
Mine; mining,  production,  construction  and exploration  activities  at  the 
Company's mineral  properties;  currency  exchange rates;  and  world  and  US 
economic conditions.  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  the Company  currently expects.  These factors  include, 
among other things, the uncertain nature of mining activities, including risks
associated  with  underground  construction   and  mining  operations,   risks 
associated with joint venture operations, including risks associated with  the 
inability to control the timing and scope of future capital expenditures,  the 
risk that the operator of the Diavik Diamond Mine may make changes to the mine
plan  and  other  risks  arising  because  of  the  nature  of  joint  venture 
activities, risks associated with the remote location of and harsh climate  at 
the Company's  mineral  property  sites, risks  resulting  from  the  Eurozone 
financial crisis, risks associated with  regulatory requirements, the risk  of 
fluctuations  in  diamond  prices  and  changes  in  US  and  world   economic 
conditions, the risk of fluctuations  in the Canadian/US dollar exchange  rate 
and cash flow and liquidity risks. Please see page 21 of this MD&A, as well as
the Company's current Annual Information Form, available at www.sedar.com  and 
www.sec.gov, respectively,  for a  discussion  of these  and other  risks  and 
uncertainties involved in  the Company's operations.  Actual results may  vary 
from the forward-looking information.

Readers are  cautioned  not  to  place  undue  importance  on  forward-looking 
information, which speaks only  as of the  date of this  MD&A, and should  not 
rely upon this information as of any other date. Due to assumptions, risks and
uncertainties, including the assumptions,  risks and uncertainties  identified 
above and elsewhere  in this MD&A,  actual events may  differ materially  from 
current expectations. The Company  uses forward-looking statements because  it 
believes such  statements  provide  useful information  with  respect  to  the 
currently expected future operations and financial performance of the Company,
and cautions readers  that the information  may not be  appropriate for  other 
purposes. 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,  future events  or otherwise  at any  particular 
time, except as required by law.

Summary Discussion
Dominion Diamond Corporation is focused on  the mining and marketing of  rough 
diamonds to the  global market.  The Company  supplies rough  diamonds to  the 
global market from its operation of the Ekati Diamond Mine (in which it owns a
controlling interest) and  its 40%  ownership interest in  the Diavik  Diamond 
Mine, both located in Canada's Northwest Territories.

The Company has an ownership interest  in the Diavik group of mineral  claims. 
The Diavik Joint  Venture (the  "Diavik Joint Venture")  is an  unincorporated 
joint arrangement  between  Diavik  Diamond  Mines  Inc.  ("DDMI")  (60%)  and 
Dominion Diamond Diavik Limited Partnership ("DDDLP") (40%) where DDDLP  holds 
an undivided 40% ownership interest in the assets, liabilities and expenses of
the Diavik Diamond Mine. DDMI is the operator of the Diavik Diamond Mine. DDMI
is a wholly owned subsidiary of Rio Tinto plc of London, England.

The Company has a controlling  interest in the Ekati  Diamond Mine as well  as 
the associated diamond  sorting and sales  facilities in Yellowknife,  Canada, 
and Antwerp, Belgium. The Company acquired  its interest in the Ekati  Diamond 
Mine on  April 10,  2013 (the  "Ekati Diamond  Mine Acquisition").  The  Ekati 
Diamond Mine consists  of the  Core Zone  (80% interest),  which includes  the 
current operating mine and  other permitted kimberlite pipes,  as well as  the 
Buffer Zone (58.8% interest), an adjacent area hosting kimberlite pipes having
both  development  and  exploration   potential.  The  Company  controls   and 
consolidates the Ekati Diamond Mine and minority shareholders are presented as
non-controlling interests  on  the unaudited  interim  condensed  consolidated 
financial statements.

Market Commentary
Diamond market sentiment was  mixed in the second  quarter. The US remained  a 
solid market and showed  potential for stronger growth  in the second half  of 
the fiscal year. The demand from the  US retail market remains focused on  the 
mid-range of polished  diamonds, where prices  remained stable throughout  the 
quarter. Japan has also seen significant growth in jewelry demand as  economic 
stimulus bolstered retail activity. However, restricted demand for higher  end 
polished diamonds,  especially from  China, has  led to  discounting in  these 
ranges. Nonetheless, levels of retail diamond  stock in China are low and  the 
diamond market anticipates an improvement in  the third fiscal quarter as  the 
market fundamentals  return to  more normal  levels. In  addition, the  market 
remains cautious due  to continued concerns  around macroeconomic  uncertainty 
combined with worsening economic conditions in India related to the  weakening 
of the rupee and tightened liquidity.

The rough  diamond  market  has  mirrored the  polished  diamond  market  with 
activity centered  on lower  price  ranges while  the  market for  higher  end 
diamonds remains flat. Toward the end of the quarter it was evident that there
was a shortage of supply in the lower price ranges of rough diamond  inventory 
and it is expected that  there will be upward pressure  on the price of  these 
goods as polishers restock. The rough  diamond market expects the second  half 
of the year to see a return to more normal trading conditions and  anticipates 
resurgence in demand in the lead up to the Asian wedding and year-end  holiday 
seasons.

Consolidated Financial Results
The Company's consolidated results from continuing operations relate solely to
its mining operations, which include the production, sorting and sale of rough
diamonds. The results of the Company's luxury brand segment, which it disposed
of on March 26,  2013, are treated as  discontinued operations for  accounting 
and reporting purposes and current and  prior period results have been  recast 
accordingly.  The  following  is  a  summary  of  the  Company's  consolidated 
quarterly results for the eight quarters ended July 31, 2013.

(expressed in thousands of United States dollars except per share amounts and where otherwise noted) (unaudited)
                                                                                                                    Six
                                                                                                           Six    months
                                                                                                        months     ended
                                                                                                         ended      July
                        2014     2014     2013     2013     2013     2013     2012     2012  July 31,      31,
                         Q2       Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013     2012
Sales              $  261,803 $ 108,837 $ 110,111 $  84,818 $  61,473 $  89,009 $ 102,232 $  36,239 $  370,640 $ 150,482
Cost of sales        234,372   81,535   79,038   71,663   46,784   70,099   72,783   34,112   315,907  116,883
Gross margin          27,431   27,302   31,073   13,155   14,689   18,910   29,449    2,127    54,733   33,599
Gross margin (%)       10.5%    25.1%    28.2%    15.5%    23.9%    21.2%    28.8%     5.9%     14.8%    22.3%
Selling, general
and 
administrative
expenses              15,056   16,843   10,086    7,581    5,750    6,739    5,464    5,390    31,898   12,489
Operating profit
(loss) from
continuing
operations        12,375   10,459   20,987    5,574    8,939   12,171   23,985  (3,263)    22,835   21,110
Finance expenses    (19,637)  (3,994)  (2,382)  (2,308)  (2,151)  (2,242)  (1,616)  (2,691)  (23,631)  (4,393)
Exploration costs    (3,145)  (1,039)    (306)    (673)    (568)    (254)    (177)    (600)   (4,185)    (822)
Finance and other
income                 1,032      804      601       60       67       52       51      256     1,836      119
Foreign exchange
gain (loss)          (2,814)      732      116    (301)    1,048    (370)      680      285   (2,083)      678
Profit (loss)
before income
taxes from
continuing
operations          (12,189)    6,962   19,016    2,352    7,335    9,357   22,923  (6,013)   (5,228)   16,692
Income tax expense
(recovery)             6,913    4,699    6,977    1,583    3,386    3,330   10,281  (1,574)    11,611    6,716
Net profit (loss)
from continuing
operations         $ (19,102) $   2,263 $  12,039 $     769 $   3,949 $   6,027 $  12,642 $ (4,439) $ (16,839) $   9,976
Net profit (loss)
from discontinued
operations             -  497,385    2,802    3,245      804    5,583    3,946    (292)   497,385    6,387
Net profit (loss)  $ (19,102) $ 499,648 $  14,841 $   4,014 $   4,753 $  11,610 $  16,588 $ (4,731) $  480,546 $  16,363
Net profit (loss)
from continuing
operations
attributable to                                                                                     
Shareholders       $ (16,304) $   2,822 $  12,146 $     152 $   3,951 $   6,027 $  12,654 $ (4,436) $ (13,481) $   9,978
Non-controlling
interest             (2,798)    (559)    (107)      617      (2)        -     (12)      (3)   (3,358)      (2)
Net profit (loss)
attributable to                                                                                     
Shareholders       $ (16,304) $ 500,207 $  14,948 $   3,397 $   4,755 $  11,610 $  16,600 $ (4,728) $  483,904 $  16,365
Non-controlling
interest             (2,798)    (559)    (107)      617    ( 2)        -    ( 12)    ( 3)   (3,358)    ( 2)
Earnings (loss)
per share -
continuing
operations                                                                                      
Basic          $   (0.19) $    0.03 $    0.14 $    0.00 $    0.05 $    0.07 $    0.15 $  (0.05) $   (0.16)     0.12
Diluted        $   (0.19) $    0.03 $    0.14 $    0.00 $    0.05 $    0.07 $    0.15 $  (0.05) $   (0.16)     0.12
Earnings (loss)
per share                                                                                           
Basic          $   (0.19) $    5.89 $    0.18 $    0.04 $    0.06 $    0.14 $    0.20 $  (0.06) $     5.70     0.19
Diluted        $   (0.19) $    5.82 $    0.18 $    0.04 $    0.06 $    0.14 $    0.19 $  (0.06) $     5.65     0.19
Cash dividends
declared per share $     0.00 $    0.00 $    0.00 $    0.00 $    0.00 $    0.00 $    0.00 $    0.00 $     0.00     0.00
Total assets ^(i)  $    2,295 $   2,412 $   1,710 $   1,733 $   1,660 $   1,716 $   1,607 $   1,656 $    2,295    1,660
Total long-term
liabilities ^(i)   $      696 $     695 $     269 $     682 $     461 $     472 $     641 $     661 $      696      461
Operating profit
(loss) from
continuing
operations     $   12,375 $  10,459 $  20,987 $   5,574 $   8,939 $  12,171 $  23,985 $ (3,263) $   22,835 $  21,110
Depreciation and
amortization ^(ii)    32,644   20,211   24,346   20,588   13,160   22,172   24,284   19,933    52,855   35,332
EBITDA from
continuing
operations ^(iii)  $   45,019 $  30,670 $  45,333 $  26,162 $  22,099 $  34,343 $  48,269 $  16,670 $   75,690 $  56,442

(i)   Total assets and total long-term liabilities are expressed in millions
       of United States dollars.
(ii)  Depreciation and amortization included in cost of sales and selling,
       general and administrative expenses.
(iii) Earnings before interest, taxes, depreciation and amortization
       ("EBITDA"). See "Non-IFRS Measures" on page 20.

Three Months Ended July 31, 2013 ComparedtoThree Months Ended July 31, 2012

CONSOLIDATED NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
The Company recorded a  second quarter consolidated  net loss attributable  to 
shareholders of $16.3 million  or $(0.19) per share  compared to a net  profit 
attributable to shareholders of $4.8 million or $0.06 per share in the  second 
quarter of the prior year. Net loss from continuing operations attributable to
shareholders was $16.3 million or $(0.19)  per share compared to a net  profit 
from continuing  operations  of  $4.0  million  or  $0.05  per  share  in  the 
comparable quarter of the  prior year. Included in  the consolidated net  loss 
attributable to shareholders for the  quarter was $5.4 million (after-tax)  of 
restructuring  costs  at  the  Antwerp,  Belgium  office  and  $10.6   million 
(after-tax) of expenses related to  the cancellation of the credit  facilities 
that had been previously  arranged in connection with  the Ekati Diamond  Mine 
Acquisition. Excluding these two items and  the impact of the sale of  opening 
acquisition inventory  that was  included at  market value  in Ekati  cost  of 
sales,  the  Company's  estimated  consolidated  net  profit  attributable  to 
shareholders for the quarter would have been $11.1 million or $0.13 per share.

CONSOLIDATED SALES
Sales for  the second  quarter totaled  $261.8 million,  consisting of  Diavik 
rough diamond  sales  of  $91.3  million  and  Ekatirough  diamond  sales  of 
$170.5million. This  compares to  sales of  $61.5 million  in the  comparable 
quarter of theprior  year (Diavik rough  diamond sales of  $61.5 million  and 
Ekati rough diamond sales of $nil).

The Company  expects that  results for  its mining  operations will  fluctuate 
depending on  the seasonality  of production  at its  mineral properties,  the 
number of sales events conducted during the quarter, rough diamond prices  and 
the volume, size and quality distribution of rough diamonds delivered from the
Company's  mineral  properties  and  sold  by  the  Company  in  eachquarter. 
See"Segmented Analysis" on page 10 for additional information.

CONSOLIDATED COST OF SALES AND GROSS MARGIN
The Company's second quarter cost of  sales was $234.4 million resulting in  a 
gross margin of 10.5% compared toa cost of sales of $46.8 million and a gross
margin of 23.9% for  the comparable quarter of  the prior year. The  Company's 
cost of sales includes costs associated with mining and rough diamond  sorting 
activities. See "Segmented Analysis" on page 10 for additional information.

CONSOLIDATED INCOME TAXES
The Company  recorded a  net income  tax expense  of $6.9  million during  the 
second quarter, compared to a  net income tax expense  of $3.4 million in  the 
comparable quarter  of the  prior  year. The  Company's combined  federal  and 
provincial statutory income tax  rate for the quarter  is 26.5%. There are  a 
number of  items that  can significantly  impact the  Company's effective  tax 
rate, including  foreign currency  exchange rate  fluctuations, the  Northwest 
Territories mining  royalty,  earnings  subject  to  tax  different  than  the 
statutory rate  and unrecognized  tax  benefits. As  a result,  the  Company's 
recorded tax provision can  be significantly different  than the expected  tax 
provision calculated based on the statutory tax rate.

The recorded  tax  provision  is particularly  impacted  by  foreign  currency 
exchange rate fluctuations. The Company's functional and reporting currency is
US dollars; however, the calculation of income tax expense is based on  income 
in the currency of the country of origin. As such, the Company is  continually 
subject to foreign exchange fluctuations, particularly as the Canadian  dollar 
moves against the US  dollar. During the second  quarter, the Canadian  dollar 
weakened against  the  US  dollar.  As  a  result,  the  Company  recorded  an 
unrealized foreign exchange  gain of $4.2  million on the  revaluation of  the 
Company's Canadian  dollar denominated  deferred  income tax  liability.  This 
compares to  an  unrealized foreign  exchange  gain  of $3.0  million  in  the 
comparable quarter of the prior year. The unrealized foreign exchange gain  is 
recorded as part  of the Company's  deferred income tax  recovery, and is  not 
taxable for  Canadian income  tax  purposes. During  the second  quarter,  the 
Company also recognized  a deferred  income tax  expense of  $7.4 million  for 
temporary differences  arising  from  the difference  between  the  historical 
exchange rate and the  current exchange rate  translation of foreign  currency 
non-monetary items. This  compares to a  deferred income tax  expense of  $4.0 
million recognized in the comparable quarter  of the prior year. The  recorded 
tax provision during  the quarter also  included a net  income tax expense  of 
$1.2 million relating to  foreign exchange differences  between income in  the 
currency of the country of origin and  US dollars. This compares to no  income 
tax expense or  recovery recognized  in the  comparable quarter  of the  prior 
year.

Due to the  number of factors  that can potentially  impact the effective  tax 
rate and the sensitivity of the  tax provision to these factors, as  discussed 
above, it is expected that the Company's effective tax rate will fluctuate  in 
future periods.

CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The principal  components  of  selling, general  and  administrative  ("SG&A") 
expenses include  expenses  for  salaries  and  benefits,  professional  fees, 
consulting and travel. The Company incurred SG&A expenses of $15.1 million for
the second quarter, compared to $5.8 million in the comparable quarter of  the 
prior year. The  increase from the  comparable quarter of  the prior year  was 
primarily due to $6.0 million of  restructuring costs at the Antwerp,  Belgium 
office,  related  in  each  case  to  the  Ekati  Diamond  Mine   Acquisition. 
See"Segmented Analysis" on page 10 for additional information.

CONSOLIDATED FINANCE EXPENSES FROM CONTINUING OPERATIONS
Finance expenses for the  second quarter were $19.6  million compared to  $2.2 
million for the  comparable quarter of  the prior year.  The increase was  due 
primarily to  the expensing  of approximately  $14.0 million  relating to  the 
cancellation of the  credit facilities  that had been  previously arranged  in 
connection with the  Ekati Diamond  Mine Acquisition.  The Company  ultimately 
determined to fund the Ekati Diamond Mine  Acquisition by way of cash on  hand 
and did not draw on these credit facilities which were subsequently  cancelled 
in the  second  quarter. Also  included  in consolidated  finance  expense  is 
accretion expense of  $4.5 million (three  months ended July  31, 2012 -  $0.6 
million) related to future site restoration liabilities at the Diavik  Diamond 
Mine and the Ekati Diamond Mine.

CONSOLIDATED EXPLORATION EXPENSE FROM CONTINUING OPERATIONS
Exploration expense of  $3.1 million  was incurred during  the second  quarter 
compared to $0.6  million in  the comparable quarter  of the  prior year.  The 
increase was due to $2.1 million  of exploration work on the Company's  claims 
in the Northwest Territories and $0.9  million of exploration work on the  Jay 
pipe within the Buffer Zone at the Ekati Diamond Mine.

CONSOLIDATED FINANCE AND OTHER INCOME FROM CONTINUING OPERATIONS
Finance and  other income  of  $1.0 million  was  recorded during  the  second 
quarter compared to $0.1 million in the comparable quarter of the prior year.

CONSOLIDATED FOREIGN EXCHANGE FROM CONTINUING OPERATIONS
A net foreign exchange loss of  $2.8 million was recognized during the  second 
quarter compared  to  a net  foreign  exchange gain  of  $1.0 million  in  the 
comparable quarter of the prior year. TheCompany does not currently have  any 
significant foreign exchange derivative instruments outstanding.

Six Months Ended July 31, 2013 ComparedtoSix Months Ended July 31, 2012
CONSOLIDATED NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
The Company recorded a consolidated net profit attributable to shareholders of
$483.9 million or  $5.70 per  share for  the six  months ended  July 31,  2013 
compared to a  net profit  attributable to  shareholders of  $16.4 million  or 
$0.19 per share in the comparable period  of the prior year. Included in  this 
amount is a $497.6  million gain on  the sale of the  luxury brand segment  on 
March  26,  2013.  Net  loss   from  continuing  operations  attributable   to 
shareholders was $13.5 million or $(0.16)  per share compared to a net  profit 
from continuing operations  attributable to shareholders  of $10.0 million  or 
$0.12 per  share in  the comparable  period of  the prior  year.  Discontinued 
operations represented  $497.4  million  of  net profit  or  $5.86  per  share 
compared to $6.4 million or  $0.08 per share in  the comparable period of  the 
prior year.

CONSOLIDATED SALES
Sales totaled  $370.6  million  for  the  six  months  ended  July  31,  2013, 
consisting of Diavik  rough diamond  sales of $180.2  million and  Ekatirough 
diamond sales of $190.5 million. This  compares to sales of $150.5 million  in 
the comparable period of theprior year (Diavik rough diamond sales of  $150.5 
million and Ekati rough diamond sales of $nil). The Ekati rough diamond  sales 
are for the period from April 10,  2013, which was the date the Ekati  Diamond 
Mine Acquisition was completed, to July 31, 2013.

The Company  expects that  results for  its mining  operations will  fluctuate 
depending on  the seasonality  of production  at its  mineral properties,  the 
number of sales events conducted during the quarter, rough diamond prices  and 
the volume, size and quality distribution of rough diamonds delivered from the
Company's  mineral  properties  and  sold  by  the  Company  in  eachquarter. 
See"Segmented Analysis" on page 10 for additional information.

CONSOLIDATED COST OF SALES AND GROSS MARGIN
The Company's cost of sales was $315.9  million for the six months ended  July 
31, 2013, resulting in a gross margin of 14.8% compared toa cost of sales  of 
$116.9 million and a gross  margin of 22.3% for  the comparable period of  the 
prior year. The Company's cost of sales includes costs associated with  mining 
and rough diamond sorting activities. See "Segmented Analysis" on page10  for 
additional information.

CONSOLIDATED INCOME TAXES
The Company recorded a net income tax expense of $11.6 million during the  six 
months ended July  31, 2013,  compared to  a net  income tax  expense of  $6.7 
million in the  comparable period of  the prior year.  The Company's  combined 
federal and provincial statutory income tax rate for the six months ended July
31, 2013 is 26.5%. There are a  number of items that can significantly  impact 
the Company's effective  tax rate,  including foreign  currency exchange  rate 
fluctuations, the Northwest  Territories mining royalty,  earnings subject  to 
tax different than  the statutory  rate and  unrecognized tax  benefits. As  a 
result, the Company's  recorded tax provision  can be significantly  different 
than the expected tax provision calculated based on the statutory tax rate.

The recorded  tax  provision  is particularly  impacted  by  foreign  currency 
exchange rate fluctuations. The Company's functional and reporting currency is
US dollars; however, the calculation of income tax expense is based on  income 
in the currency of the country of origin. As such, the Company is  continually 
subject to foreign exchange fluctuations, particularly as the Canadian  dollar 
moves against the US dollar.  During the six months  ended July 31, 2013,  the 
Canadian dollar  weakened  against the  US  dollar. The  Company  recorded  an 
unrealized foreign exchange  gain of $6.0  million on the  revaluation of  the 
Company's Canadian dollar denominated deferred income tax liability during the
six months  ended  July 31,  2013.  This  compares to  no  unrealized  foreign 
exchange gain or  loss recorded in  the comparable period  of the prior  year. 
During the six months ended July  31, 2013, the Company recognized a  deferred 
income tax expense of $10.5 million for temporary differences arising from the
difference between the historical exchange rate and the current exchange  rate 
translation of  foreign  currency  non-monetary  items.  This  compares  to  a 
deferred income  tax expense  of  $2.5 million  recognized in  the  comparable 
period of the  prior year. The  recorded tax provision  during the six  months 
ended July 31, 2013  did not include  any net income  tax expense or  recovery 
relating to foreign exchange differences between income in the currency of the
country of origin and the US dollar.  This compares to a tax recovery of  $2.0 
million recognized in the comparable period of the prior year.

Due to the  number of factors  that can potentially  impact the effective  tax 
rate and the sensitivity of the  tax provision to these factors, as  discussed 
above, it is expected that the Company's effective tax rate will fluctuate  in 
future periods.

CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The Company incurred  SG&A expenses  of $31.9  million during  the six  months 
ended July 31, 2013, compared to $12.5 million in the comparable period of the
prior year. The  increase from  the comparable period  of the  prior year  was 
primarily due  to $11.2  million  of transaction  costs  and $6.0  million  of 
restructuring costs at the  Antwerp, Belgium office, related  in each case  to 
the Ekati Diamond Mine  Acquisition. See"Segmented Analysis"  on page 10  for 
additional information.

CONSOLIDATED FINANCE EXPENSES FROM CONTINUING OPERATIONS
Finance expenses were  $23.6 million for  the six months  ended July 31,  2013 
compared to $4.4  million for  the comparable period  of the  prior year.  The 
increase was due  primarily to  the expensing of  approximately $14.0  million 
relating to the cancellation of the credit facilities that had previously been
arranged in connection with  the Ekati Diamond  Mine Acquisition. The  Company 
ultimately determined to  fund the Ekati  Diamond Mine Acquisition  by way  of 
cash on  hand  and  did  not  draw  on  these  credit  facilities  which  were 
subsequently cancelled.  Also  included  in consolidated  finance  expense  is 
accretion expense  of $6.7  million (six  months ended  July 31,  2012 -  $1.3 
million) related to future site restoration liabilities at the Diavik  Diamond 
Mine and the Ekati Diamond Mine.

CONSOLIDATED EXPLORATION EXPENSE FROM CONTINUING OPERATIONS
Exploration expense of $4.2 million was  incurred during the six months  ended 
July 31, 2013 compared to $0.8 million  in the comparable period of the  prior 
year. The  increase  was  due to  $3.1  million  of exploration  work  on  the 
Company's claims in the Northwest Territories and $0.9 million of  exploration 
work on the Jay pipe within the Buffer Zone at the Ekati Diamond Mine.

CONSOLIDATED FINANCE AND OTHER INCOME FROM CONTINUING OPERATIONS
Finance and other income  of $1.8 million was  recorded during the six  months 
ended July 31, 2013, compared to $0.1 million in the comparable period of  the 
prior year.

CONSOLIDATED FOREIGN EXCHANGE FROM CONTINUING OPERATIONS
A net foreign  exchange loss  of $2.1 million  was recognized  during the  six 
months ended July 31, 2013,  compared to a net  foreign exchange gain of  $0.7 
million in  the comparable  period of  the prior  year. TheCompany  does  not 
currently  have  any  significant  foreign  exchange  derivative   instruments 
outstanding.

Segmented Analysis
The operating segments  of the Company  include the Diavik  Diamond Mine,  the 
Ekati Diamond Mine and the  Corporate segment. The Corporate segment  captures 
costs not specifically related to operating the Diavik and Ekati mines.

Diavik Diamond Mine

This segment includes the production, sorting and sale of rough diamonds  from 
the Diavik Diamond Mine.

(expressed in thousands of United States dollars) (unaudited)
                                                                                                    Six       Six
                                                                                                    months    months
                                                                                                     ended     ended
                                                                                                      July      July
                          2014    2014     2013    2013    2013    2013     2012    2012      31,      31,
                         Q2      Q1       Q4      Q3      Q2      Q1       Q4      Q3     2013     2012
Sales                                                                                         
North America    $      - $  6,179 $   4,604 $  7,697 $  2,269 $  7,432 $   2,727 $  8,835 $   6,179 $   9,701
Europe            80,530  61,642   84,346  57,438  50,514  54,370   78,846  21,993  142,172  104,884
India             10,737  21,095   21,161  19,683   8,690  27,207   20,659   5,411   31,832   35,897
Total sales           91,267  88,916  110,111  84,818  61,473  89,009  102,232  36,239  180,183  150,482
Cost of sales         68,328  61,888   79,038  71,663  46,784  70,099   72,783  34,112  130,216  116,883
Gross margin          22,939  27,028   31,073  13,155  14,689  18,910   29,449   2,127   49,967   33,599
Gross margin (%)       25.1%   30.4%    28.2%   15.5%   23.9%   21.2%    28.8%    5.9%    27.7%    22.3%
Selling, general    
and 
administrative
expenses                 1,409   1,110    1,860   1,279   1,050     972    1,308   1,026    2,518    2,023
Operating profit     $ 21,530 $ 25,918 $  29,213 $ 11,876 $ 13,639 $ 17,938 $  28,141 $  1,101 $  47,449 $  31,576
Depreciation and    
amortization ^(i)       21,768  19,906   24,042  20,283  12,874  21,876   23,849  19,709   41,674   34,750
EBITDA ^(ii)         $ 43,298 $ 45,824 $  53,255 $ 32,159 $ 26,513 $ 39,814 $  51,990 $ 20,810 $  89,123 $  66,326

^(i)  Depreciation and amortization included in cost of sales and selling,
       general and administrative expenses.
^(ii) Earnings before interest, taxes, depreciation and amortization
       ("EBITDA"). See "Non-IFRS Measure" on page 20.

Three Months Ended July 31, 2013 ComparedtoThree Months Ended July 31, 2012
DIAVIK Sales
During the second quarter, the  Company sold approximately 0.7 million  carats 
from the Diavik Diamond Mine for a total of $91.3 million for an average price
per carat of $130, compared to 0.4 million carats for a total of $61.5 million
for an average price per carat of $142 in the comparable quarter of the  prior 
year. The 62% increase in volume of carats sold versus the comparable  quarter 
of the prior year resulted primarily  from the decision in that prior  quarter 
to hold some inventory from all  price ranges until stability returned to  the 
rough diamond market. The 9% decrease in the Company's achieved average  rough 
diamond prices as compared  to the second quarter  of the prior year  resulted 
primarily from the sale during the second quarter of the prior year of  higher 
priced Diavik Diamond  Mine goods that  had originally been  held back by  the 
Company in the first quarter of fiscal  2013 due to a then observed  imbalance 
in the rough and polished  diamond prices for these  goods. At July 31,  2013, 
the Company had 0.5 million carats  of Diavik Diamond Mine produced  inventory 
with an estimated market value of approximately $65 million.

Had the Company sold only the  last production shipped in the second  quarter, 
the estimated  achieved price  would have  been approximately  $132 per  carat 
based on the prices achieved in the July 2013 sale.

DIAVIK COST OF SALES AND GROSS MARGIN
The Company's second  quarter cost of  sales for the  Diavik Diamond Mine  was 
$68.3 million resulting in a gross margin of 25.1% compared to a cost of sales
of $46.8 million and a gross margin of 23.9% in the comparable quarter of  the 
prior year. Cost  of sales for  the second quarter  included $21.6 million  of 
depreciation and  amortization compared  to $12.4  million in  the  comparable 
quarter of the prior  year. The increase in  depreciation and amortization  is 
due in  part to  the higher  costs associated  with underground  mining.  This 
segment  generated  gross  margins  and  EBITDA  margin  of  25.1%  and   47%, 
respectively, compared  to  23.9% and  43%,  respectively, in  the  comparable 
quarter of  the prior  year.  The gross  margin  is anticipated  to  fluctuate 
between quarters, resulting  from variations  in the specific  mix of  product 
sold during each quarter and rough diamond prices.

A substantial portion of consolidated cost of sales is mining operating costs,
which are incurred at the Diavik Diamond Mine. During the second quarter,  the 
Diavik cash cost of production was $38.9 million compared to $40.6 million  in 
the comparable quarter of the prior year. Cost of sales also includes  sorting 
costs, which consists of the Company's cost of handling and sorting product in
preparation for sales to third parties, and depreciation and amortization, the
majority of  which  is  recorded  using  the  unit-of-production  method  over 
estimated proven and probable reserves.

The MD&A refers to cash cost of production, a non-IFRS performance measure, in
order to  provide  investors  with  information  about  the  measure  used  by 
management to monitor performance. This information is used to assess how well
the Diavik Diamond  Mine is  performing compared to  the mine  plan and  prior 
periods. Cash cost of  production includes mine site  operating costs such  as 
mining, processing  and  administration,  but is  exclusive  of  amortization, 
capital, and exploration and development  costs. Cash cost of production  does 
not have any standardized meaning prescribed by IFRS and differs from measures
determined in accordance with  IFRS. This performance  measure is intended  to 
provide additional information and should not be considered in isolation or as
a substitute for  measures of  performance prepared in  accordance with  IFRS. 
This measure is  not necessarily indicative  of net profit  or cash flow  from 
operations  as  determined  under  IFRS.   The  following  table  provides   a 
reconciliation of cash cost of production to the Diavik Diamond Mine's cost of
sales disclosed for the three months ended July 31, 2013 and 2012.

(expressed in thousands of United    Three months ended  Three months ended
States dollars)                             July 31, 2013        July 31, 2012
Diavik cash cost of production            $       38,887      $       40,594
Private royalty                                   1,730              1,089
Other cash costs                                    889                602
Total cash cost of production                    41,506             42,285
Depreciation and amortization                    18,539             16,015
Total cost of production                         60,045             58,300
Adjusted for stock movements                      8,283           (11,516)
Total cost of sales                       $       68,328      $       46,784

DIAVIK SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Diavik Diamond Mine segment during the quarter was  $1.4 
million compared to $1.1 million in the comparable quarter of the prior year.

Six Months Ended July 31, 2013 ComparedtoSix Months Ended July 31, 2012
DIAVIK SALES
During the six months ended July 31, 2013, the Company sold approximately  1.5 
million carats from the Diavik Diamond Mine for a total of $180.2 million  for 
an average price per carat of $121 compared to 1.4 million carats for a  total 
of $150.5 million for  an average price  per carat of  $104 in the  comparable 
period of the prior year. The  17% increase in the Company's achieved  average 
rough diamond prices resulted primarily from the sale during the first quarter
of the prior year of almost all of the remaining lower priced goods originally
held back in inventory by the Company at October 31, 2011 due to an oversupply
in the market at that time. The 3%  increase in volume of carats sold was  due 
primarily to two offsetting factors that impacted the comparable period of the
prior year: first, an increase in volume  of carats sold from the sale  during 
the first quarter of the  prior year of almost of  all of the remaining  lower 
priced goods  originally held  back  in inventory  at  October 31,  2011;  and 
second, a decrease in volume of carats sold due to the decision in the  second 
quarter of the prior year to hold  some inventory from all price ranges  until 
stability returned to the rough diamond market.

DIAVIK COST OF SALES AND GROSS MARGIN
The Company's cost of  sales for the  Diavik Diamond Mine  for the six  months 
ended July 31, 2013, was $130.2 million  resulting in a gross margin of  27.7% 
compared to a cost of sales of $116.9  million and a gross margin of 22.3%  in 
the comparable period  of the prior  year. Cost  of sales for  the six  months 
ended July 31, 2013  included $41.2 million  of depreciation and  amortization 
compared to $34.0  million in the  comparable period of  the prior year.  This 
segment generated gross margins and EBITDA margins of sales of 27.7% and  49%, 
respectively, compared  to  22.3% and  44%,  respectively, in  the  comparable 
period of the prior year. The gross margin is anticipated to fluctuate between
quarters, resulting from variations in the specific mix of product sold during
each quarter and rough diamond prices.

A substantial portion of consolidated cost of sales is mining operating costs,
which are incurred  at the Diavik  Diamond Mine. During  the six months  ended 
July 31, 2013, the Diavik cash  cost of production was $81.8 million  compared 
to $84.6 million in  the comparable period  of the prior  year. Cost of  sales 
also includes sorting costs, which consists of the Company's cost of  handling 
and  sorting  product  in  preparation   for  sales  to  third  parties,   and 
depreciation and amortization,  the majority  of which is  recorded using  the 
unit-of-production method over estimated proven and probable reserves.

The MD&A refers to cash cost of production, a non-IFRS performance measure, in
order to  provide  investors  with  information  about  the  measure  used  by 
management to monitor performance. This information is used to assess how well
the Diavik Diamond  Mine is  performing compared to  the mine  plan and  prior 
periods. Cash cost of  production includes mine site  operating costs such  as 
mining, processing  and  administration,  but is  exclusive  of  amortization, 
capital, and exploration and development  costs. Cash cost of production  does 
not have any standardized meaning prescribed by IFRS and differs from measures
determined in accordance with  IFRS. This performance  measure is intended  to 
provide additional information and should not be considered in isolation or as
a substitute for  measures of  performance prepared in  accordance with  IFRS. 
This measure is  not necessarily indicative  of net profit  or cash flow  from 
operations  as  determined  under  IFRS.   The  following  table  provides   a 
reconciliation of cash cost of production to the Diavik Diamond Mine's cost of
sales disclosed for the six months ended July 31, 2013 and 2012.

(expressed in thousands of United        Six months ended  Six months ended
States dollars)                               July 31, 2013      July 31, 2012
Diavik cash cost of production               $      81,806      $     84,630
Private royalty                                     2,924            3,727
Other cash costs                                    1,959            2,031
Total cash cost of production                      86,689           90,388
Depreciation and amortization                      41,448           29,786
Total cost of production                          128,137          120,174
Adjusted for stock movements                        2,079          (3,291)
Total cost of sales                          $     130,216      $    116,883

DIAVIK SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for  the Diavik Diamond  Mine segment for  the six months  ended 
July 31, 2013  was $2.5  million compared to  $2.0 million  in the  comparable 
period of the prior year.

OPERATIONAL UPDATE
Production for the second calendar quarter at the Diavik Diamond Mine was  1.6 
million carats  (at 100%)  compared  to 1.8  million  in the  second  calendar 
quarter of  the  prior  year. Total  production  includes  reprocessed  plant 
rejects ("RPR"), which are not included in the Company's reserves and resource
statement and are therefore incremental to production.

DOMINION DIAMOND DIAVIK LIMITED PARTNERSHIP'S 40% SHARE OF DIAVIK DIAMOND MINE
PRODUCTION
(reported on a one-month lag)

For the three months ended                              
June 30, 2013
                                 Ore Processed   Carats            Grade
Pipe                               (000s tonnes)     (000s)     (carats/tonne)
A-154 South                                 61      229             3.79
A-154 North                                 69      130             1.89
A-418                                       80      232             2.89
RPR                                          1       33                -
Total                                      211      624         2.82^(a)
^(a)Grade has been adjusted                             
to exclude RPR                                                             
                                                       
For the three months ended                               
June 30, 2012                                                              
                                 Ore Processed   Carats            Grade
Pipe                               (000s tonnes)     (000s)     (carats/tonne)
A-154 South                                 13       54             4.28
A-154 North                                 28       58             2.04
A-418                                      174      604             3.47
RPR                                          -        -                -
Total                                      215      716         3.33^(a)
^(a)Grade has been adjusted                             
to exclude RPR                                                             
                                                       
For the six months ended June                            
30, 2013                                                                   
                                 Ore Processed   Carats            Grade
Pipe                               (000s tonnes)     (000s)     (carats/tonne)
A-154 South                                120      524             4.36
A-154 North                                138      296             2.15
A-418                                      151      506             3.35
RPR                                          3       76                -
Total                                      412    1,402         3.24^(a)
^(a)Grade has been adjusted                             
to exclude RPR                                                             
                                                       
For the six months ended June                            
30, 2012                                                                   
                                 Ore Processed   Carats            Grade
Pipe                               (000s tonnes)     (000s)     (carats/tonne)
A-154 South                                 28      104             3.70
A-154 North                                 69      128             1.85
A-418                                      329    1,095             3.33
RPR                                          1       32                -
Total                                      427    1,359         3.12^(a)
^(a)Grade has been adjusted                    
to exclude RPR

Diavik Operations Outlook
PRODUCTION
The approved and updated  mine plan for the  Diavik Diamond Mine for  calendar 
2013 currently foresees  production of approximately  7.3 million carats  from 
the mining of approximately  1.8 million tonnes of  ore and the processing  of 
approximately 2.2 million tonnes of material from both mining and  stockpiles. 
The approximately 22% increase in  carats in expected production for  calendar 
2013, as compared  to the  original plan  of approximately  6 million  carats, 
results from  both the  expected  processing of  more  stockpiled ore  and  an 
increase in underground  mining velocity  during the  calendar year.  Planned 
mining activities  will  be  exclusively underground  with  approximately  0.7 
million tonnes  expected to  be sourced  from A-154  North, approximately  0.5 
million tonnes  from A-154  South and  approximately 0.6  million tonnes  from 
A-418 kimberlite pipes. Included in the estimated production for calendar 2013
is approximately 0.4 million carats from  RPR and 0.1 million carats from  the 
improved recovery  process for  small diamonds.  These RPR  and small  diamond 
recoveries are not included in  the Company's reserves and resource  statement 
and are therefore incremental to production.

PRICING
Based on  prices from  the Company's  rough diamond  sales during  the  second 
quarter and  the current  diamond recovery  profile of  the Diavik  processing 
plant, the Company has modeled the current approximate rough diamond price per
carat for each of the Diavik ore types in the table that follows:

                  Sales cycle ended
                                July 2013
                        average price per
                                    carat
Ore type                  (in US dollars)
A-154 South      $               140
A-154 North                     180
A-418                           100
RPR                              50

COST OF SALES AND CASH COST OF PRODUCTION
Based on the current mine plan for the Diavik Diamond Mine for calendar  2013, 
the Company currently  expects cost of  sales for the  Diavik Diamond Mine  in 
fiscal 2014  to  be approximately  $280  million (including  depreciation  and 
amortization of approximately $95  million). The Company's  share of the  cash 
cost of production at the Diavik Diamond Mine for calendar 2013 is expected to
be approximately  $170  million  at  an  assumed  average  Canadian/US  dollar 
exchange rate of $1.02.

CAPITAL EXPENDITURES
Based on the current mine plan for the Diavik Diamond Mine for calendar  2013, 
the Company  currently  expects  DDDLP's  40% share  of  the  planned  capital 
expenditures for the Diavik  Diamond Mine in fiscal  2014 to be  approximately 
$26 million, assuming an  average Canadian/US dollar  exchange rate of  $1.02. 
During the  second quarter,  DDDLP's share  of capital  expenditures was  $5.6 
million ($16.5 million for the six months ended July 31, 2013).

Ekati Diamond Mine
This segment includes the production, sorting and sale of rough diamonds from
the Ekati Diamond Mine.

(expressed in thousands of United States dollars) (unaudited)
                                                                                      Six      Six
                                                                                       months   months
                                                                                        ended    ended
                                                                                         July     July
                           2014    2014  2013  2013  2013   2013  2012  2012      31,     31,
                          Q2      Q1    Q4    Q3    Q2    Q1    Q4    Q3     2013    2012
Sales                                                                           
Europe           $ 170,536 $ 19,921 $    - $    - $    - $    - $    - $    - $ 190,457 $      -
Total sales           170,536  19,921     -     -     -     -     -     -  190,457       -
Cost of sales         166,044  19,647     -     -     -     -     -     -  185,691       -
Gross margin            4,492     274     -     -     -     -     -     -    4,766       -
Gross margin (%)         2.6%    1.4%    -%    -%    -%    -%    -%    -%     2.5%      -%
Selling, general                                             
and
administrative
expenses                    676     520     -     -     -      -     -     -    1,196       -
Operating profit                                             $
(loss)                 $   3,816 $  (246) $    - $    - $    -      - $    - $    - $   3,570 $      -
Depreciation and                                             
amortization ^(i)        10,513       -     -     -     -      -     -     -   10,513       -
EBITDA ^(ii)         $  14,329 $  (246) $    - $    - $    - $    - $    - $    - $  14,083 $      -

      Depreciation and amortization included in cost of sales and selling,
^(i) general and administrative expenses. All sales are related to inventory
      purchased as a part of the Ekati Diamond Mine Acquisition, and
      accordingly are accounted for as cash cost of sales.
^(ii) Earnings before interest, taxes, depreciation and amortization
      ("EBITDA"). See "Non-IFRS Measure" on page 20.

Three months ended July 31, 2013
EKATI SALES
During the second quarter, the  Company sold approximately 0.6 million  carats 
from the Ekati Diamond Mine for a total of $170.5 million for an average price
per carat of $289.  The volume of  carats sold during  the quarter was  higher 
than what  the Company  would anticipate  going  forward as  a result  of  the 
shortening during the quarter of the  sorting and selling cycle that had  been 
in place at the  time of the Ekati  Diamond Mine Acquisition, which  increased 
the volume of carats available for sale. At July 31, 2013, the Company had 0.4
million carats  of Ekati  Diamond Mine  produced inventory  with an  estimated 
market value of approximately $135 million.

EKATI COST OF SALES AND GROSS MARGIN
The Company's cost of sales for the Ekati Diamond Mine during the second
quarter was $166.0 million, resulting in a gross margin of 2.6%. Cost of sales
for the second quarter was impacted by the sale of inventory that was recorded
at market value as a result of the Ekati Diamond Mine Acquisition. The Company
estimates the cost of sales would have been approximately $152 million during
the second quarter if the effect of the market value adjustment made as part
of the Ekati Diamond Mine Acquisition was excluded. The Company estimates that
gross margins and EBITDA margin would have been 11.0% and 30%, respectively if
the effect of the market value adjustment made as part of the Ekati Diamond
Mine Acquisition was excluded. The gross margin is anticipated to fluctuate
between quarters, resulting from variations in the specific mix of product
sold during each quarter, rough diamond prices and the continued sale of
inventory purchased at market values as part of the Ekati Diamond Mine
Acquisition.

Consolidated cost of  sales includes  mining operating costs  incurred at  the 
Ekati Diamond  Mine.  During  the  second quarter,  the  Ekati  cash  cost  of 
production was $94.1 million. Cost of sales also includes sorting costs, which
consists of the Company's cost of handling and sorting product in  preparation 
for sales to third parties, and depreciation and amortization, the majority of
which is recorded  using the unit-of-production  method over estimated  proven 
and probable reserves.

The MD&A refers to cash cost of production, a non-IFRS performance measure, in
order to  provide  investors  with  information  about  the  measure  used  by 
management to monitor performance. This information is used to assess how well
the Ekati  Diamond Mine  is performing  compared to  the mine  plan and  prior 
periods. Cash cost of  production includes mine site  operating costs such  as 
mining, processing  and  administration,  but is  exclusive  of  amortization, 
capital, and exploration and development  costs. Cash cost of production  does 
not have any standardized meaning prescribed by IFRS and differs from measures
determined in accordance with  IFRS. This performance  measure is intended  to 
provide additional information and should not be considered in isolation or as
a substitute for  measures of  performance prepared in  accordance with  IFRS. 
This measure is  not necessarily indicative  of net profit  or cash flow  from 
operations  as  determined  under  IFRS.   The  following  table  provides   a 
reconciliation of  cash  cost  of  production  to  the  Ekati  Diamond  Mine's 
operations' cost of sales disclosed for the three months ended July 31, 2013.

                                                     Three Months Ended
(expressed in thousands of United States dollars)            July 31, 2013
Ekati cash cost of production                             $       94,128
Other cash costs including inventory acquisition                  1,837
Total cash cost of production                                    95,965
Depreciation and amortization                                    25,286
Total cost of production                                        121,251
Adjusted for stock movements                                     44,793
Total cost of sales                                       $      166,044

EKATI SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Ekati Diamond Mine segment for the quarter were $0.7
million.

Period from April 10 to July 31, 2013
EKATI SALES
During  the  period  from  April  10  to  July  31,  2013,  the  Company  sold 
approximately 0.6 million carats  from the Ekati Diamond  Mine for a total  of 
$190.5 million for an average price per carat of $317.

Had the Company sold only the  last production shipped in the second  quarter, 
the estimated  achieved price  would have  been approximately  $304 per  carat 
based on the prices achieved in the July 2013 sale.

EKATI COST OF SALES AND GROSS MARGIN
The Company's cost of  sales for the  Ekati Diamond Mine  for the period  from 
April 10 to July 31, 2013, was $185.7 million, resulting in a gross margin  of 
2.5%. Cost of sales was impacted by the sale of inventory that was recorded at
market value as a  result of the Ekati  Diamond Mine Acquisition. The  Company 
estimates that the cost  of sales would have  been approximately $169  million 
during the period if the effect of the market value adjustment made as part of
the Ekati Diamond Mine  Acquisition was excluded.  The Company estimates  that 
gross margins  and EBITDA  margins of  sales would  have been  11.1% and  30%, 
respectively if the effect of the market value adjustment made as part of  the 
Ekati Diamond Mine Acquisition was  excluded. The gross margin is  anticipated 
to fluctuate between quarters, resulting  from variations in the specific  mix 
of product sold during  each quarter, rough diamond  prices and the  continued 
sale of inventory purchased at market values as part of the Ekati Diamond Mine
Acquisition.

A substantial portion of consolidated cost of sales is mining operating costs,
which are incurred at the Ekati Diamond Mine. During the period from April  10 
to July 31, 2013, the Ekati cash  cost of production was $111.5 million.  Cost 
of sales also includes sorting costs, which consists of the Company's cost  of 
handling and sorting product  in preparation for sales  to third parties,  and 
depreciation and amortization,  the majority  of which is  recorded using  the 
unit-of-production method over estimated proven and probable reserves.

The MD&A refers to cash cost of production, a non-IFRS performance measure, in
order to  provide  investors  with  information  about  the  measure  used  by 
management to monitor performance. This information is used to assess how well
the Ekati  Diamond Mine  is performing  compared to  the mine  plan and  prior 
periods. Cash cost of  production includes mine site  operating costs such  as 
mining, processing  and  administration,  but is  exclusive  of  amortization, 
capital, and exploration and development  costs. Cash cost of production  does 
not have any standardized meaning prescribed by IFRS and differs from measures
determined in accordance with  IFRS. This performance  measure is intended  to 
provide additional information and should not be considered in isolation or as
a substitute for  measures of  performance prepared in  accordance with  IFRS. 
This measure is  not necessarily indicative  of net profit  or cash flow  from 
operations  as  determined  under  IFRS.   The  following  table  provides   a 
reconciliation of  cash  cost  of  production  to  the  Ekati  Diamond  Mine's 
operations' cost of sales disclosed for the period April 10 to July 31, 2013.

                                                     Period April 10 to
(expressed in thousands of United States dollars)            July 31, 2013
Ekati cash cost of production                            $       111,509
Other cash costs including inventory acquisition                155,849
Total cash cost of production                                   267,358
Depreciation and amortization                                    31,830
Total cost of production                                        299,188
Adjusted for stock movements                                  (113,497)
Total cost of sales                                      $       185,691

EKATI SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Ekati Diamond Mine segment for the period from April 10
to July 31, 2013 were $1.2 million.

OPERATIONAL UPDATE
Production for the second calendar quarter  at the Ekati Diamond Mine was  0.4 
million carats at 100%. The development  of the Misery Pipe is continuing.  As 
of July 31, 2013, the Company had processed approximately 0.04 million  tonnes 
of material excavated  as part of  the waste stripping  for advancing the  pit 
profile of  the Misery  Pipe,  and has  recovered approximately  0.04  million 
carats of diamonds from this material. These diamond recoveries, all of  which 
occurred after June 30, 2013, are  not included in the Company's reserves  and 
resource statement and are therefore incremental to production.

EKATI DIAMOND MINE PRODUCTION (80% SHARE)
(this table reported on a one-month lag)

For the period from April 10,
2013 (date of acquisition) to                           
June 30, 2013
                                 Ore Processed   Carats            Grade
Pipe                               (000s tonnes)     (000s)     (carats/tonne)
Koala Phase 5                               50       19             0.38
Koala Phase 6                               26       34             1.30
Koala North                                 75       59             0.78
Fox                                        613      199             0.33
Total                                      764      311             0.41

Ekati Operations Outlook
PRODUCTION
The  approved  and  updated  mine  plan  and  budget  for  theEkati   Diamond 
Mineforesees production (on a 100% basis) for the period fromApril 10, 2013
to the calendar  2013 year-end of  approximately 1.0 million  carats from  the 
mining of  approximately 3.6  million  tonnes from  mineral reserve,  and  the 
processing of approximately 3.3 million tonnes, with some material being  made 
up of diamond bearing kimberlite from a satellite body in the Misery open  pit 
that is  excavated as  part  of the  waste stripping  as  the pit  profile  is 
advanced. Planned mining activities  include approximately 0.3 million  tonnes 
expected to be sourced  from Koala Phase 5,  approximately 0.3 million  tonnes 
from Koala Phase  6, approximately  0.3 million  tonnes from  Koala North  and 
approximately 2.7 million tonnes from Fox.

PRICING
Based on prices  from the Company's  rough diamond sales  during July and  the 
current diamond recovery profile  of the Ekati  processing plant, the  Company 
has modeled the current approximate rough diamond price per carat for each  of 
the Ekati ore types in the table that follows:

                  Sales cycle ended
                              July 2013
                      average price per
                                  carat
Ore type                (in US dollars)
Koala Phase 5    $               350
Koala Phase 6                   405
Koala North                     420
Fox                             305

COST OF SALES AND CASH COST OF PRODUCTION
Based on the current mine plan for the Ekati Diamond Mine for the period  from 
April 10, 2013 to the fiscal 2014 year-end, the Company currently expects cost
of sales at the  Ekati Diamond Mine  in fiscal 2014  to be approximately  $405 
million  (including  depreciation  and   amortization  of  approximately   $50 
million). The cash  cost of production  at the Ekati  Diamond Mine for  fiscal 
2014 is  expected to  be  approximately $320  million  at an  assumed  average 
Canadian/US dollar exchange rate of $1.02.

CAPITAL EXPENDITURES
The planned capital  expenditures for the  Ekati Diamond Mine  for the  period 
from  April  10,  2013  to  the  fiscal  2014  year-end  are  expected  to  be 
approximately $85 million  at an assumed  average Canadian/US dollar  exchange 
rate  of   $1.02.  The   currently  expected   capital  expenditures   include 
approximately $40 million for  the continued development  of the Misery  Pipe, 
consisting largely of mining costs to  achieve ore release. During the  second 
quarter, capital expenditures were approximately $28.2 million ($37.0  million 
for the period from April 10, 2013 to July 31, 2013).

Corporate
The Corporate segment captures costs not specifically related to the
operations of the Diavik and Ekati diamond mines.

(expressed in thousands of United States dollars) (unaudited)
                                                                                                           Six        Six
                                                                                                         months     months
                                                                                                          ended      ended
                        2014      2014     2013     2013     2013     2013     2012     2012  July 31,  July 31,
                         Q2        Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013      2012
Sales              $        - $        - $       - $       - $       - $       - $       - $       - $        - $        -
Cost of sales              -         -        -        -        -        -        -        -         -         -
Gross margin               -         -        -        -        -        -        -        -         -         -
Gross margin (%)          -%        -%       -%       -%       -%       -%       -%       -%        -%        -%
Selling, general
and 
administrative
expenses              12,971    15,213    8,227    6,302    4,700    5,767    4,153    4,364    28,184    10,467
Operating loss     $ (12,971) $ (15,213) $ (8,227) $ (6,302) $ (4,700) $ (5,767) $ (4,153) $ (4,364) $ (28,184) $ (10,467)
Depreciation and
amortization ^(i)        363       305      304      306      286      296      434      223       668       582
EBITDA ^(ii)       $ (12,608) $ (14,908) $ (7,923) $ (5,996) $ (4,414) $ (5,471) $ (3,719) $ (4,141) $ (27,516) $  (9,885)

^(i)  Depreciation and amortization included in cost of sales and selling,
       general and administrative expenses.
^(ii) Earnings before interest, taxes, depreciation and amortization
       ("EBITDA"). See "Non-IFRS Measure" on page 20.

Three Months Ended July 31, 2013 ComparedtoThree Months Ended July 31, 2012
CORPORATE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Corporate segment  during the quarter increased by  $8.3 
million from the comparable quarter of  the prior year. The increase from  the 
comparable quarter of  the prior  year was primarily  due to  $6.0 million  of 
restructuring costs  at the  Antwerp,  Belgium office,  related to  the  Ekati 
Diamond Mine Acquisition.

Six Months Ended July 31, 2013 ComparedtoSix Months Ended July 31, 2012
CORPORATE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Corporate segment  during the six months ended July  31, 
2013 increased by $17.7 million from the comparable period of the prior  year. 
The increase from the comparable period of the prior year was primarily due to
$11.2 million of transaction costs and $6.0 million of restructuring costs  at 
the Antwerp, Belgium office,  related in each case  to the Ekati Diamond  Mine 
Acquisition.

DISCONTINUED OPERATIONS
On March 26, 2013, the Company  completed the disposition of its luxury  brand 
segment to Swatch Group.  As a result, the  Company's consolidated results  no 
longer include the operations of the  luxury brand segment and the results  of 
the luxury  brand  segment are  now  treated as  discontinued  operations  for 
reporting purposes. Current  and prior  period results have  been restated  to 
reflect this change.

Liquidity and Capital Resources
Working Capital
As at July 31, 2013, the Company had unrestricted cash and cash equivalents of
$224.2million  and   restricted   cash   of  $123.4   million   compared   to 
$104.3million and $nil at  January 31, 2013. The  restricted cash is used  to 
support letters of credit to the Government  of Canada of CDN $127 million  in 
support of the reclamation obligations for the Ekati Diamond Mine. During  the 
quarter ended July  31, 2013,  the Company  reported cash  from operations  of 
$105.1million compared to $8.6 million in the comparable period of the  prior 
year.

Working  capital  increased   to  $490.0million   at  July   31,  2013   from 
$361.5million at January 31, 2013. During the quarter, the Company  decreased 
accounts receivable  from continuing  operations  by $0.6  million,  decreased 
other current assets  from continuing  operations by  $0.6 million,  decreased 
inventory and supplies from continuing operations by $101.7million, decreased
trade and  other  payables from  continuing  operations by  $16.2million  and 
decreased employee benefit plans from continuing operations by $0.2 million.

The  Company's  liquidity  requirements  fluctuate  from  quarter  to  quarter 
depending on,  among  other factors,  the  seasonality of  production  at  the 
Company's mineral properties, seasonality of mine operating expenses,  capital 
expenditure programs,  the  number of  rough  diamond sales  events  conducted 
during the quarter,  and the volume,  size and quality  distribution of  rough 
diamonds delivered  from the  Company's  mineral properties  and sold  by  the 
Company in each quarter.

The Company assesses liquidity and capital resources on a consolidated  basis. 
The Company's requirements are for  cash operating expenses, working  capital, 
contractual debt requirements and  capital expenditures. The Company  believes 
that  it  will   generate  sufficient  liquidity   to  meet  its   anticipated 
requirements for the next twelve months.

Financing Activities
On May 31, 2013, the Company repaid its senior secured revolving credit
facility with Standard Chartered Bank and cancelled this facility.

In connection with the Ekati Diamond  Mine Acquisition on April 10, 2013,  the 
Company arranged new secured credit facilities  with The Royal Bank of  Canada 
and Standard Chartered  Bank consisting of  a $400 million  term loan, a  $100 
million revolving credit facility and a $140 million letter of credit facility
(expandable to $265 million in  aggregate). The Company ultimately  determined 
to fund the Ekati Diamond Mine Acquisition by way of cash on hand and did  not 
draw on these new  facilities. These credit  facilities were cancelled  during 
the second quarter.

As at  July 31,  2013,  $nil was  outstanding  under the  Company's  revolving 
financing facility  relating  to  its  Belgian  subsidiary,  Dominion  Diamond 
International NV, and its Indian subsidiary, Dominion Diamond (India)  Private 
Limited, compared to $nil and $1.1 million, respectively, at January 31, 2013.

Investing Activities
During the second quarter, the Company purchased property, plant and equipment
of $33.8million  for its  continuing operations,  of which  $5.6 million  was 
purchased for the Diavik Diamond Mine and $28.2 million for the Ekati  Diamond 
Mine.

Contractual Obligations
The  Company   has   contractual   payment   obligations   with   respect   to 
interest-bearing loans and  borrowings and, through  its participation in  the 
Diavik JointVenture and the Ekati Diamond Mine, future site restoration costs
at both the Ekati and Diavik  Diamond Mine level. Additionally, at the  Diavik 
Joint Venture level, contractual obligations  exist with respect to  operating 
purchase obligations, as administered  by DDMI, the operator  of the mine.  In 
order to maintain its 40% ownership interest in the Diavik Diamond Mine, DDDLP
is obligated to fund 40% of the Diavik Joint Venture's total expenditures on a
monthly basis.  Not  reflected in  the  table below  are  currently  estimated 
capital expenditures  for the  calendar years  2013 to  2017 of  approximately 
$70million in the aggregate assuming  a Canadian/US average exchange rate  of 
$1.00 for each of  the fiveyears and  representing DDDLP's current  projected 
share of the currently planned capital expenditures (excluding the A-21  pipe) 
at the Diavik Diamond  Mine. Also not reflected  are any capital  expenditures 
for the Ekati Diamond Mine.  The most significant contractual obligations  for 
the ensuing five-year period can be summarized as follows:

Contractual                     Less than     Year    Year    After
Obligations
(expressed in            Total      1 year      2-3     4-5        5
thousands of United                                                      years
States dollars)
Interest-bearing      $   6,179  $     1,196  $  2,392  $ 2,392  $    199
loans and borrowings
(a)(b)
Environmental and      215,690     206,438    4,677       -    4,575
participation
agreements
incremental
commitments (c)
Operating lease         18,945       5,040    9,847   4,058        -
obligations (d)
Total contractual     $ 240,814  $   212,674  $ 16,916  $ 6,450  $  4,774
obligations

(a)  (i) Interest-bearing loans and borrowings presented in the foregoing
     table include current and long-term portions. The Company does not have
     any credit facilities.
    
    (ii) The Company has available a $45.0million revolving financing
     facility (utilization in either US dollars or Euros) with Antwerp Diamond
     Bank for inventory and receivables funding in connection with marketing
     activities through its Belgian subsidiary, Dominion Diamond International
     NV, and its Indian subsidiary, Dominion Diamond (India) Private Limited.
     Borrowings under the Belgian facility bear interest at the bank's base
     rate plus 1.5%. Borrowings under the Indian facility bear an interest
     rate of 13.5%. At July 31, 2013, $nil was outstanding under this facility
     relating to Dominion Diamond International NV and Dominion Diamond
     (India) Private Limited. The facility is guaranteed by Dominion Diamond
     Corporation.
    
    (iii) The Company's first mortgageon real property has scheduled
     principal payments of approximately $0.2 million quarterly, may be
     prepaid at any time, and matures on September 1, 2018. On July 31, 2013,
     $5.1 million was outstanding on the mortgage payable.
    
(b)  Interest on loans and borrowings is calculated at various fixed and
     floating rates. Projected interest payments on the current debt
     outstanding were based on interest rates in effect at July 31, 2013, and
     have been included under interest-bearing loans and borrowings in the
     table above. Interest payments for the next twelve months are
     approximated to be $0.4million.
    
(c) Both the Diavik Joint Venture and Ekati Diamond Mine, under environmental
     and other agreements, must provide funding for the Environmental
     Monitoring Advisory Board. These agreements also state that the mines
     must provide security deposits for the performance of their reclamation
     and abandonment obligations under all environmental laws and regulations.
     Theoperator of the Diavik Joint Venture has fulfilled such obligations
     for the security deposits by posting letters of credit, of which DDDLP's
     share as at July 31, 2013 was $63million based on its 40% ownership
     interest in the Diavik Diamond Mine. There can be no assurance that the
     operator will continue its practice of posting letters of credit in
     fulfillment of this obligation, in which event DDDLP would be required to
     post its proportionate share of such security directly, which would
     result in additional constraints on liquidity. The requirement to post
     security for the reclamation and abandonment obligations may be reduced
     to the extent of amounts spent by the Diavik Joint Venture on those
     activities. The Company has posted letters of credit of CDN $127 million
     with the Government of Canada supported by restricted cash in support of
     the reclamation obligations for the Ekati Diamond Mine. Both the Diavik
     and Ekati Diamond Mines have also signed participation agreements with
     various native groups. These agreements are expected to contribute to the
     social, economic and cultural well-being of area Aboriginal bands. The
     actual cash outlay for obligations of the Diavik Joint Venture under
     these agreements is not anticipated to occur until later in the life of
     the mine. The actual cash outlay in respect of the Ekati Diamond Mine
     under these agreements includes annual payments and special project
     payments during the operation of the Ekati Diamond Mine.
    
(d)  Operating lease obligations represent future minimum annual rentals under
     non-cancellable operating leases at the Ekati Diamond Mine.

Non-IFRS Measures
In addition to discussing earnings measures in accordance with IFRS, the  MD&A 
provides the following non-IFRS measures, which are also used by management to
monitor and evaluate the performance of the Company.

Cash Cost of Production
The MD&A refers to cash cost of production, a non-IFRS performance measure, in
order to  provide  investors  with  information  about  the  measure  used  by 
management to monitor performance. This information is used to assess how well
each of the Diavik Diamond Mine and Ekati Diamond Mine is performing  compared 
to the mine plan and prior periods. Cash cost of production includes mine site
operating  costs  such  as  mining,  processing  and  administration,  but  is 
exclusive of  amortization, capital,  and exploration  and development  costs. 
Cash cost of production does not  have any standardized meaning prescribed  by 
IFRS and  differs  from measures  determined  in accordance  with  IFRS.  This 
performance measure is intended to  provide additional information and  should 
not be considered in isolation or as a substitute for measures of  performance 
prepared in accordance with IFRS.  This measure is not necessarily  indicative 
of net profit or cash flow from operations as determined under IFRS.

EBITDA
The  term   EBITDA  (earnings   before  interest,   taxes,  depreciation   and 
amortization) does  not have  a  standardized meaning  according to  IFRS  and 
therefore may  not  be  comparable  to similar  measures  presented  by  other 
issuers. The Company defines EBITDA as sales minus cost of sales and  selling, 
general and administrative  expenses, meaning it  represents operating  profit 
before depreciation and amortization.

EBITDA and EBITDA  margin are measures  commonly reported and  widely used  by 
investors and analysts as an indicator of the Company's operating  performance 
and ability to incur and service debt and as a valuation metric. EBITDA margin
is defined  as  the ratio  obtained  by dividing  EBITDA  by sales  and  is  a 
measurement for cash margins.

CONSOLIDATED

(expressed in
thousands of
United States                                                                                 
dollars)
(unaudited)
                                                                                                            Six         Six
                                                                                                         months      months
                                                                                                          ended       ended
                     2014      2014     2013     2013     2013     2013     2012     2012  July 31,   July 31,
                       Q2        Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013       2012
Operating
profit (loss)
from
continuing
operations   $   12,375 $   10,459 $  20,987 $   5,574 $   8,939 $  12,171 $  23,985 $ (3,263) $   22,835  $   21,110
Depreciation        32,644    20,211   24,346   20,588   13,160   22,172   24,284   19,933    52,855     35,332
and              
amortization
EBITDA from      $   45,019 $   30,670 $  45,333 $  26,162 $  22,099 $  34,343 $  48,269 $  16,670 $   75,690    56,442
continuing                                                                                                      $
operations
                                                                                             
                                                                                             
DIAVIK DIAMOND                                                                                
MINE SEGMENT
(expressed in
thousands of
United States                                                                                 
dollars)
(unaudited)
                                                                                                            Six         Six
                                                                                                         months      months
                                                                                                          ended       ended
                     2014      2014     2013     2013     2013     2013     2012     2012  July 31,   July 31,
                       Q2        Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013       2012
Operating        $   21,530 $   25,918 $  29,213 $  11,876 $  13,639 $  17,938 $  28,141 $   1,101 $   47,449  $   31,576
profit
Depreciation        21,768    19,906   24,042   20,283   12,874   21,876   23,849   19,709    41,674     34,750
and
amortization
EBITDA           $   43,298 $   45,824 $  53,255 $  32,159 $  26,513 $  39,814 $  51,990 $  20,810 $   89,123  $   66,326
                                                                                             
                                                                                             
EKATI DIAMOND                                                                                 
MINE SEGMENT
(expressed in
thousands of
United States                                                                                 
dollars)
(unaudited)
                                                                                                            Six         Six
                                                                                                         months      months
                                                                                                          ended       ended
                     2014      2014     2013     2013     2013     2013     2012     2012  July 31,   July 31,
                       Q2        Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013       2012
Operating        $    3,816 $    (246) $       - $       - $       - $       - $       - $       - $    3,570  $        -
profit (loss)
Depreciation        10,513         -        -        -        -        -        -        -    10,513          -
and
amortization
EBITDA           $   14,329 $    (246) $       - $       - $       - $       - $       - $       - $   14,083  $        -
                                                                                             
                                                                                             
CORPORATE                                                                                     
SEGMENT
(expressed in
thousands of
United States                                                                                 
dollars)
(unaudited)
                                                                                                            Six         Six
                                                                                                         months      months
                                                                                                          ended       ended
                     2014      2014     2013     2013     2013     2013     2012     2012  July 31,   July 31,
                       Q2        Q1       Q4       Q3       Q2       Q1       Q4       Q3      2013       2012
Operating loss   $ (12,971) $ (15,213) $ (8,227) $ (6,302) $ (4,700) $ (5,767) $ (4,153) $ (4,364) $ (28,184)  $ (10,467)
Depreciation                     305      304      306      286      296      434      223       668        582
and
amortization              363
EBITDA           $ (12,608) $ (14,908) $ (7,923) $ (5,996) $ (4,414) $ (5,471) $ (3,719) $ (4,141) $ (27,516)  $  (9,885)

Risks and Uncertainties
Dominion Diamond Corporation is subject to a number of risks and uncertainties
as a result of its operations. Inaddition to the other information  contained 
in this  MD&A and  the Company's  other publicly  filed disclosure  documents, 
readers should  give careful  consideration to  the following  risks, each  of 
which could have a material adverse effect on the Company's business prospects
or financial condition.

Nature of Mining
The Company's mining operations  are subject to risks  inherent in the  mining 
industry, including  variations in  grade  and other  geological  differences, 
unexpected problems  associated with  required  water retention  dikes,  water 
quality, surface and  underground conditions,  processing problems,  equipment 
performance, accidents,  labour  disputes,  risks  relating  to  the  physical 
security  of  the  diamonds,  force  majeure  risks  and  natural   disasters. 
Particularly  with  underground  mining  operations,  inherent  risks  include 
variations in  rock structure  and strength  as it  impacts on  mining  method 
selection  and  performance,  de-watering  and  water  handling  requirements, 
achieving the  required  crushed  rock-fill strengths,  and  unexpected  local 
ground conditions. Hazards,  such as  unusual or  unexpected rock  formations, 
rock bursts,  pressures,  collapses,  flooding or  other  conditions,  may  be 
encountered during  mining. Such  risks  could result  in personal  injury  or 
fatality; damage to or destruction of mining properties, processing facilities
or  equipment;  environmental   damage;  delays,   suspensions  or   permanent 
reductions  in  mining  production;   monetary  losses;  and  possible   legal 
liability.

The Company's mineral  properties, because of  their remote northern  location 
and access only by winter road or  by air, are subject to special climate  and 
transportation risks.  These risks  include  the inability  to operate  or  to 
operate efficiently  during periods  of extreme  cold, the  unavailability  of 
materials and equipment, and  increased transportation costs  due to the  late 
opening and/or early closure of the winter  road. Such factors can add to  the 
cost of mine  development, production and  operation and/or impair  production 
and mining activities, thereby affecting the Company's profitability.

Nature of Interest in Diavik Diamond Mine
DDDLP holds an undivided 40% interest in the assets, liabilities and  expenses 
of the Diavik Diamond Mine and the Diavik group of mineral claims. The  Diavik 
Diamond Mine  and the  exploration  and development  of  the Diavik  group  of 
mineral claims is a joint arrangement between DDMI (60%) and DDDLP (40%),  and 
is subject to the risks normally associated with the conduct of joint ventures
and similar joint  arrangements. These  risks include the  inability to  exert 
influence over strategic decisions made in respect of the Diavik Diamond  Mine 
and the Diavik group of mineral claims, including the inability to control the
timing and scope of capital expenditures,  and risks that DDMI may change  the 
mine plan. Byvirtue of DDMI's 60% interest in the Diavik Diamond Mine, it has
a controlling vote in virtually all Diavik Joint Venture management  decisions 
respecting the development and  operation of the Diavik  Diamond Mine and  the 
development of the Diavik group of  mineral claims. Accordingly, DDMI is  able 
to determine the timing and scope of future project capital expenditures,  and 
therefore is able to impose capital expenditure requirements on DDDLP that the
Company may  not have  sufficient cash  to  meet. A  failure to  meet  capital 
expenditure requirements imposed by DDMI  could result in DDDLP's interest  in 
the Diavik Diamond Mine and the Diavik group of mineral claims being diluted.

Diamond Prices and Demand for Diamonds
The profitability  of the  Company  is dependent  upon the  Company's  mineral 
properties and the worldwide demand for and price of diamonds. Diamond  prices 
fluctuate and  are affected  by numerous  factors beyond  the control  of  the 
Company, including  worldwide economic  trends,  worldwide levels  of  diamond 
discovery and  production, and  the  level of  demand for,  and  discretionary 
spending on, luxury  goods such  as diamonds. Low  or negative  growth in  the 
worldwide economy, renewed  or additional credit  market disruptions,  natural 
disasters or  the  occurrence  of  terrorist  attacks  or  similar  activities 
creating disruptions in economic growth  could result in decreased demand  for 
luxury goods  such as  diamonds,  thereby negatively  affecting the  price  of 
diamonds. Similarly, a substantial increase in the worldwide level of  diamond 
production or the release of stocks  held back during recent periods of  lower 
demand could also negatively affect the price of diamonds. In each case,  such 
developments could have a material adverse effect on the Company's results  of 
operations.

Cash Flow and Liquidity
The Company's liquidity  requirements fluctuate  from quarter  to quarter  and 
year to year depending on, among other factors, the seasonality of  production 
at the  Company's  mineral  properties,  the  seasonality  of  mine  operating 
expenses, exploration expenses,  capital expenditure programs,  the number  of 
rough diamond sales events conducted during the quarter, and the volume,  size 
and quality  distribution  of  rough diamonds  delivered  from  the  Company's 
mineral properties and  sold by  the Company  in each  quarter. The  Company's 
principal working  capital needs  include  investments in  inventory,  prepaid 
expenses and  other current  assets,  and accounts  payable and  income  taxes 
payable. There can be no assurance that the Company will be able to meet  each 
or all of its  liquidity requirements. A  failure by the  Company to meet  its 
liquidity requirements could result in the Company failing to meet its planned
development objectives, or in  the Company being in  default of a  contractual 
obligation, each  of  which  could  have a  material  adverse  effect  on  the 
Company's business prospects or financial condition.

Economic Environment
The Company's financial results are tied to the global economic conditions and
their impact  on levels  of  consumer confidence  and consumer  spending.  The 
global  markets  have  experienced  the   impact  of  a  significant  US   and 
international economic downturn since autumn 2008. A return to a recession  or 
weak recovery, due to recent disruptions  in financial markets in the US,  the 
Eurozone or elsewhere,  budget policy issues  in the US  and upheavals in  the 
Middle East, could  cause the Company  to experience revenue  declines due  to 
deteriorated  consumer  confidence  and  spending,  and  a  decrease  in   the 
availability of credit,  which could  have a  material adverse  effect on  the 
Company's business  prospects or  financial condition.  The credit  facilities 
essential to  the  diamond  polishing industry  are  largely  underwritten  by 
European banks that are currently under stress. The withdrawal or reduction of
such facilities could  also have a  material adverse effect  on the  Company's 
business prospects  or  financial  condition. The  Company  monitors  economic 
developments in the markets in which it operates and uses this information  in 
its continuous strategic and operational planning  in an effort to adjust  its 
business in response to changing economic conditions.

Currency Risk
Currency fluctuations may affect the Company's financial performance. Diamonds
are sold throughout the  world based principally on  the USdollar price,  and 
although the Company reports its financial  results in US dollars, a  majority 
of the costs and expenses of the Company's mineral properties are incurred  in 
Canadian dollars. Further, the Company  has a significant deferred income  tax 
liability that has been incurred and will be payable in Canadian dollars.  The 
Company's currency exposure relates to expenses and obligations incurred by it
in Canadian dollars. The  appreciation of the Canadian  dollar against the  US 
dollar, therefore,  will  increase  the  expenses  of  the  Company's  mineral 
properties and  the  amount  of  the  Company's  Canadian  dollar  liabilities 
relative to the revenue theCompany will receive from diamond sales. Fromtime
to time,  the  Company  may  use a  limited  number  of  derivative  financial 
instruments to manage its foreign currencyexposure.

Licences and Permits
The Company's mining operations require licenses and permits from the Canadian
and Northwest  Territories  governments, and  the  process for  obtaining  and 
renewing of such licenses and permits  often takes an extended period of  time 
and is subject to numerous delays and uncertainties. Such licenses and permits
are subject  to  change  in  various circumstances.  Failure  to  comply  with 
applicable laws and  regulations may  result in  injunctions, fines,  criminal 
liability, suspensions  or  revocation  of  permits  and  licenses  and  other 
penalties. There can be no assurance that DDMI, as the operator of the  Diavik 
Diamond Mine, or the Company  has been or will be  at all times in  compliance 
with all  such laws  and  regulations and  with  its applicable  licenses  and 
permits, or that DDMI or the Company will be able to obtain on a timely  basis 
or maintain  in the  future all  necessary licenses  and permits  that may  be 
required to explore  and develop  their properties,  commence construction  or 
operation of mining facilities and  projects under development or to  maintain 
continued operations.

Regulatory and Environmental Risks
The operation of the Company's mineral properties are subject to various  laws 
and regulations  governing the  protection  of the  environment,  exploration, 
development, production, taxes, labour  standards, occupational health,  waste 
disposal, mine safety and other matters. New laws and regulations,  amendments 
to existing laws and regulations, or more stringent implementation or  changes 
in enforcement  policies under  existing  laws and  regulations could  have  a 
material adverse effect on  the Company by increasing  costs and/or causing  a 
reduction in levels of production from the Company's mineral properties.

Mining is subject to potential risks and liabilities associated with pollution
of the environment and the disposal of waste products occurring as a result of
mining operations. To the extent that the Company's operations are subject  to 
uninsured environmental  liabilities, the  payment of  such liabilities  could 
have a material adverse effect on the Company.

The environmental agreements relating to the Diavik Diamond Mine and the Ekati
Diamond Mine require that security be provided to cover estimated  reclamation 
and remediation costs. The operator of the Diavik Joint Venture has  fulfilled 
such obligations for the  security deposits by posting  letters of credit,  of 
which DDDLP's share  as at  July 31,  2013 was $63  million based  on its  40% 
ownership interest in the Diavik Diamond Mine. There can be no assurance  that 
the operator  will continue  its  practice of  posting  letters of  credit  in 
fulfillment of this obligation, in which event DDDLP would be required to post
its proportionate  share of  such  security directly,  which would  result  in 
additional constraints  on liquidity.  The Company  has as  at July  31,  2013 
posted letters of  credit of CDN  $127 million with  the Government of  Canada 
supported by restricted cash in support of the reclamation obligations for the
Ekati Diamond Mine. As reclamation and remediation cost estimates are  updated 
and revised, the Company expects that  it will be required to post  additional 
security for those obligations, which  could result in additional  constraints 
on liquidity.

Climate Change
The Canadian  government  has  established  a number  of  policy  measures  in 
response to concerns  relating to climate  change. While the  impact of  these 
measures cannot  be quantified  at this  time, the  likely effect  will be  to 
increase costs  for fossil  fuels,  electricity and  transportation;  restrict 
industrial emission  levels; impose  added costs  for emissions  in excess  of 
permitted levels; and increase costs for monitoring and reporting.  Compliance 
with these initiatives could have a  material adverse effect on the  Company's 
results of operations.

Resource and Reserve Estimates
The Company's figures for  mineral resources and  ore reserves are  estimates, 
and no assurance can be given  that the anticipated carats will be  recovered. 
The estimation of  reserves is a  subjective process. Forecasts  are based  on 
engineering data,  projected future  rates  of production  and the  timing  of 
future expenditures, all of  which are subject  to numerous uncertainties  and 
various interpretations. The  Company expects that  its estimates of  reserves 
will change to reflect updated information as well as to reflect depletion due
to production. Reserve estimates  may be revised upward  or downward based  on 
the results of current and future drilling, testing or production levels,  and 
on changes in mine  design. In addition, market  fluctuations in the price  of 
diamonds or increases  in the  costs to  recover diamonds  from the  Company's 
mineral properties may render the mining of ore reserves uneconomical.

Mineral resources  that are  not  mineral reserves  do not  have  demonstrated 
economic viability. Due to the uncertainty that may attach to inferred mineral
resources, there is no  assurance that mineral resources  will be upgraded  to 
proven and probable ore reserves.

Insurance
The Company's business is subject to a number of risks and hazards,  including 
adverse  environmental  conditions,  industrial  accidents,  labour  disputes, 
unusual or unexpected  geological conditions, risks  relating to the  physical 
security of  diamonds  held  as  inventory  or  in  transit,  changes  in  the 
regulatory environment,  and  natural  phenomena  such  as  inclement  weather 
conditions. Such occurrences could result  in damage to the Company's  mineral 
properties, personal injury  or death, environmental  damage to the  Company's 
mineral properties,  delays  in mining,  monetary  losses and  possible  legal 
liability. Although insurance is maintained  to protect against certain  risks 
in  connection  with  the  Company's  mineral  properties  and  the  Company's 
operations, the insurance in place will not cover all potential risks. It  may 
not be possible to maintain insurance to cover insurable risks at economically
feasible premiums.

Fuel Costs
The expected fuel  needs for  the Company's mineral  properties are  purchased 
periodically during the year for storage, and transportedto the mine site  by 
way of the  winter road. These  costs will increase  if transportation by  air 
freight is required due to a shortened "winter road season" or unexpected high
fuel usage.

Thecost of  the fuelpurchased  is  based on  the then  prevailingprice  and 
expensed  into  operating  costs  ona  usage  basis.  TheCompany's   mineral 
properties  currently  have  no  hedges  for  their  future  anticipated  fuel 
consumption.

Reliance on Skilled Employees
Production at the Company's mineral  properties is dependent upon the  efforts 
of certain skilled employees. The loss of these employees or the inability  to 
attract and retain additional skilled employees may adversely affect the level
of diamond production.

The Company's success in marketing rough diamonds is dependent on the services
of key executives  and skilled employees,  as well as  the continuance of  key 
relationships with certain third  parties, such as  diamantaires. The loss  of 
these persons  or the  Company's inability  to attract  and retain  additional 
skilled employees or  to establish  and maintain  relationships with  required 
third parties  may adversely  affect  its business  and future  operations  in 
marketing diamonds.

Changes in Internal Control over FinancialReporting

Limitation on Scope of Design
Management has limited  the scope  of design  of its  disclosure controls  and 
procedures and internal controls over financial reporting to exclude controls,
policies and procedures of entities acquired as part of the Ekati Diamond Mine
Acquisition.

Since the acquisition was closed 20 days prior to the end of the first quarter
of fiscal 2014, management was unable to adequately test the internal  control 
systems in  place.  While  management believes  that  internal  controls  were 
operating effectively, since it was unable  to test these systems, it  elected 
to exclude  them from  the scope  of certification  as allowed  by NI  52-109. 
Management intends performing such testing by April 10, 2014.

The chart  below  presents  the summary  financial  information  for  entities 
acquired as  part  of the  Ekati  Diamond  Mine Acquisition  included  in  the 
Company's unaudited interim condensed consolidated financial statements:

As at July 31, 2013        
Current assets             374,798
Long-term assets           838,144
Current liabilities         85,846
Long-term liabilities      558,975

Critical Accounting Estimates
Management is often required to  make judgments, assumptions and estimates  in 
the application  of IFRS  that  have a  significant  impact on  the  financial 
results of the Company. Certain policies are more significant than others  and 
are, therefore, considered critical  accounting policies. Accounting  policies 
are considered critical if they rely on a substantial amount of judgment  (use 
of estimates) in their  application, or if they  result from a choice  between 
accounting alternatives and that choice has a material impact on the Company's
financial performanceor financial position.

The critical accounting estimates applied in the preparation of the  Company's 
unaudited interim condensed consolidated  financial statements are  consistent 
with those applied  and disclosed  in the Company's  MD&A for  the year  ended 
January 31, 2013.

Changes in Accounting Policies
The International  Accounting  Standards  Board  ("IASB")  has  issued  a  new 
standard, IFRS 9,  "Financial Instruments" ("IFRS  9"), which will  ultimately 
replace IAS  39, "Financial  Instruments: Recognition  and Measurement"  ("IAS 
39"). IFRS  9  provides guidance  on  the classification  and  measurement  of 
financial assets and  financial liabilities. This  standard becomes  effective 
for the Company's fiscal year end  beginning February 1, 2015. The Company  is 
currently  assessing  the  impact  of  the  new  standard  on  its   financial 
statements.

(a)New Accounting Standards

(i)IFRS 10 - CONSOLIDATED FINANCIAL STATEMENTS
IFRS  10,  "Consolidated  Financial  Statements"  ("IFRS  10")  replaces   the 
consolidation  requirements  inSIC-12,   "Consolidation  -  Special   Purpose 
Entities" and IAS  27, "Consolidated and  Separate Financial Statements".  The 
new standard establishes control as  the basis for determining which  entities 
are  consolidated  in  the  consolidated  financial  statements  and  provides 
guidance to assist in  the determination of control  where it is difficult  to 
assess. IFRS 10 did not have  a material impact on the Company's  consolidated 
financial statements upon its adoption on February 1, 2013.

(ii)IFRS 11 - JOINT ARRANGEMENTS
IFRS 11, "Joint Arrangements" ("IFRS 11") replaces IAS 31, "Interest in  Joint 
Ventures". The new standard applies to  the accounting for interests in  joint 
arrangements where there is joint  control. Under IFRS 11, joint  arrangements 
are classified as either joint ventures or joint operations. The structure  of 
the joint  arrangement  will no  longer  be  the most  significant  factor  in 
determining whether a joint arrangement is  either a joint venture or a  joint 
operation. For a joint venture, proportionate consolidation will no longer  be 
allowed and will  be replaced by  equity accounting.  IFRS 11 did  not have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(iii)IFRS 13 - FAIR VALUE MEASURMENT
IFRS 13, "Fair Value Measurement" ("IFRS 13") generally makes IFRS  consistent 
with generally accepted accounting principles in the United States ("US GAAP")
on measuring fair value and related  fair value disclosures. The new  standard 
creates a single source of guidance for fair value measurements. The  adoption 
of IFRS 13 did not have a  material effect on the Company's unaudited  interim 
condensed consolidated financial  statements. The  disclosure requirements  of 
IFRS 13 will be  incorporated in the  Company's annual consolidated  financial 
statements for the year ended January 31, 2014. This will include  disclosures 
about fair values of financial assets and liabilities measured on a  recurring 
basis and non-financial  assets and  liabilities measured  on a  non-recurring 
basis. The Company  will also  include disclosures about  assumptions used  in 
calculating  fair  value  less  cost  of  disposal  for  its  annual  goodwill 
impairment test.

(iv)IFRIC 20 - STRIPPING COSTS IN THE PRODUCTION PHASE OF A SURFACE MINE
The International  Financial  Reporting  Interpretations  Committee  ("IFRIC") 
issued IFRIC 20, "Stripping Costs in  the Production Phase of a Surface  Mine" 
("IFRIC 20"), which  clarifies the requirements  for accounting for  stripping 
costs  associated  with  waste  removal  in  surface  mining,  including  when 
production stripping costs should be recognized as an asset, how the asset  is 
initially recognized,  and subsequent  measurement. IFRIC  20 did  not have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(v)IAS 19 - EMPLOYEE BENEFITS
Amendments to IAS 19, "Employee Benefits" ("IAS 19") eliminates the option  to 
defer the recognition  of actuarial  gains and losses  through the  "corridor" 
approach, revises  the  presentation  of changes  in  assets  and  liabilities 
arising from defined benefit  plans and enhances  the disclosures for  defined 
benefit plans.IAS 19 is effective for the Company's fiscal year end beginning
February 1,  2013,  with early  adoption  permitted. IAS  19  did not  have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(vi)IAS 1 - PRESENTATION OF FINANCIAL STATEMENTS
Amendments to IAS  1, "Presentation  of Financial Statements"  ("IAS 1")  have 
been  adopted  by  the  Company  on  February  1,  2013,  with   retrospective 
application. The amendments  to IAS  1 require  the grouping  of items  within 
other comprehensive income  that may  be reclassified  to profit  or loss  and 
those that will not be reclassified. The Company has amended its  consolidated 
statement of comprehensive income for all periods presented in these unaudited
interim  condensed   consolidated   financial  statements   to   reflect   the 
presentation changes required under the amended IAS 1. Since these changes are
reclassifications within the  statement of comprehensive  income, there is  no 
net impact on the Company's comprehensive income.

Outstanding Share Information

As at August 31, 2013              
Authorized                          Unlimited
Issued and outstanding shares      85,023,031
Options outstanding                 2,003,000
Fully diluted                      87,026,031

Additional Information
Additional information relating to the  Company, including the Company's  most 
recently  filed   Annual  Information   Form,can  be   found  on   SEDAR   at 
www.sedar.com,  and   is  also   available  on   the  Company's   website   at 
www.ddcorp.ca.

                    Condensed Consolidated Balance Sheets
        (UNAUDITED) (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)
                                                        
                                        July 31, 2013    January 31,
                                                                          2013
ASSETS                                                             
                                                        
Current assets                                                     
  Cash and cash equivalents          $         224,239   $     104,313
  Accounts receivable                           7,603          3,705
  Inventory and supplies (note 5)             369,137        115,627
  Other current assets                         27,633         29,486
  Assets held for sale (note 6)                     -        718,804
                                              628,612        971,935
Property, plant and equipment                1,508,713        727,489
Restricted cash (note 7)                       123,405              -
Goodwill                                        28,687              -
Other non-current assets                         1,913          6,937
Deferred income tax assets                       3,973          4,095
Total assets                          $       2,295,303   $   1,710,456
                                                                  
LIABILITIES AND EQUITY                                             
                                                        
Current liabilities                                                
  Trade and other payables           $         103,117   $      39,053
  Employee benefit plans (note 9)               1,347          2,634
  Income taxes payable                         33,332         32,977
  Current portion of                              827         51,508
   interest-bearing loans and
   borrowings (note 10)
  Liabilities held for sale (note                   -        484,252
   6)
                                              138,623        610,424
Interest-bearing loans and                       4,238          4,799
borrowings (note 10)
Deferred income tax liabilities                237,173        181,427
Employee benefit plans (note 9)                 21,399          3,499
Provisions (note 4)                            433,309         79,055
Total liabilities                              834,742        879,204
Equity                                                             
  Share capital                              508,523        508,007
  Contributed surplus                          21,615         20,387
  Retained earnings                           779,642        295,738
  Accumulated other comprehensive                 579          6,357
   income
  Total shareholders' equity                1,310,359        830,489
  Non-controlling interest                    150,202            763
Total equity                                 1,460,561        831,252
Total liabilities and equity          $       2,295,303   $   1,710,456
The accompanying notes are an integral part of these consolidated financial
statements.

                                                             
                        Condensed Consolidated Income Statements
 (UNAUDITED) (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)
                                                                      
                           Three         Three           Six           Six
                                months           months           months           months
                                 ended            ended            ended            ended
                              July 31,         July 31,         July 31,         July 31,
                                  2013             2012             2013             2012
Sales                 $    261,803   $     61,473   $    370,640   $    150,482
Cost of sales             234,372        46,784       315,907       116,883
Gross margin               27,431        14,689        54,733        33,599
Selling, general           15,056         5,750        31,898        12,489
and
administrative
expenses
Operating profit           12,375         8,939        22,835        21,110
Finance expenses         (19,637)       (2,151)      (23,631)       (4,393)
Exploration costs         (3,145)         (568)       (4,185)         (822)
Finance and other           1,032            67         1,836           119
income
Foreign exchange          (2,814)         1,048       (2,083)           678
gain (loss)
Profit (loss)            (12,189)         7,335       (5,228)        16,692
before income
taxes
Income tax                  6,913         3,386        11,611         6,716
expense
Net profit (loss)        (19,102)         3,949      (16,839)         9,976
from continuing
operations
Net profit from                 -           804       497,385         6,387
discontinued
operations (note
6)
Net profit (loss)     $   (19,102)   $      4,753   $    480,546   $     16,363
Net profit (loss)                                                      
from continuing
operations
attributable to
 Shareholders        $   (16,304)   $      3,951   $   (13,481)   $      9,978
 Non-controlling         (2,798)           (2)       (3,358)           (2)
  interest
Net profit (loss)                                                      
attributable to
 Shareholders        $   (16,304)         4,755       483,904        16,365
 Non-controlling         (2,798)   $        (2)   $    (3,358)   $        (2)
  interest
Earnings (loss)                                                        
per share -
continuing
operations
 Basic               $     (0.19)   $       0.05   $     (0.16)   $       0.12
 Diluted                 (0.19)          0.05        (0.16)          0.12
Earnings (loss)                                                        
per share
 Basic                    (0.19)          0.06          5.70          0.19
 Diluted                 (0.19)          0.06          5.65          0.19
Weighted average       85,007,262    84,874,781    84,949,508    84,874,781
number of shares
outstanding
The accompanying notes are an integral part of these unaudited interim condensed
consolidated financial statements.

                                                      
          Condensed Consolidated Statements ofComprehensiveIncome
        (UNAUDITED) (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)
                                                            
                         Three      Three         Six        Six
                             months        months         months        months
                              ended         ended          ended         ended
                               July          July           July          July
                           31, 2013           31,       31, 2013           31,
                                             2012                         2012
Net profit (loss)     $ (19,102)   $   4,753   $  480,546   $  16,363
Other                                                        
comprehensive
income
 Items that may                                             
  be reclassified
  to profit
   Net loss on                                         
     translation
     of net
     foreign
     operations
     (net of tax
     of nil)                  (314)       (6,106)       (11,049)       (5,969)
 Items that will                                            
  not be
  reclassified to
  profit
   Reversal of              -          -       5,271          -
     actuarial
     loss on
     employee
     benefit plans
     (net of tax
     of $0.7
     million)
Other                     (314)    (6,106)     (5,778)    (5,969)
comprehensive
loss, net of tax
Total                 $ (19,416)   $ (1,353)   $  474,768   $  10,394
comprehensive
income (loss)
 Comprehensive                                            
  income (loss)
  from continuing
  operations             $ (19,416)     $   3,616     $ (17,283)     $   9,932
 Comprehensive               -    (4,969)     492,051        462
  income from
  discontinued
  operations
Comprehensive                                                
income (loss)
attributable to
 Shareholders        $ (16,618)   $ (1,351)   $  478,126   $  10,396
 Non-controlling       (2,798)        (2)     (3,358)        (2)
  interest
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.

                                                        
            Condensed Consolidated Statements ofChangesinEquity
        (UNAUDITED) (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)
                                                                    
                                          Six months ended          Six months
                                        July 31, 2013            ended
                                                                 July 31, 2012
Common shares:                                                       
Balance at beginning of period       $          508,007   $       507,975
Issued during the period                           516                -
Balance at end of period                       508,523          507,975
Contributed surplus:                                                 
Balance at beginning of period                  20,387           17,764
Stock-based compensation expense                 1,228              854
Balance at end of period                        21,615           18,618
Retained earnings:                                                   
Balance at beginning of period                 295,738          261,028
Net profit attributable to common              483,904           16,365
shareholders
Balance at end of period                       779,642          277,393
Accumulated other comprehensive                                      
income:
Balance at beginning of period                   6,357           10,086
Other comprehensive income                                           
 Items that may be reclassified                                     
  to profit
  Net loss on translation of                (11,049)          (5,969)
    net foreign operations (net
    of tax of nil)
 Items that will not be                                             
  reclassified to profit
  Reversal of actuarial loss on                5,271                -
    employee benefit plans (net
    of tax of $0.7 million)
Balance at end of period                           579            4,117
Non-controlling interest:                                            
Balance at beginning of period                     763              255
Non-controlling interest                       149,439              (2)
Balance at end of period                       150,202              253
Total equity                         $        1,460,561   $       808,356
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.

                                                            
                   Condensed Consolidated Statements of Cash Flows
            (UNAUDITED) (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)
                                                            
                                         Three          Six         Six
                                                months          months         months
                           Three months          ended           ended          ended
                         ended July 31,       July 31,        July 31,       July 31,
                                   2013           2012            2013           2012
Cash provided by                                               
(used in)                                                                        
OPERATING                                                           
Net profit          $                  $            $             $
(loss)                         (19,102)          3,949         480,546          9,976
  Depreciation                                                
   and
   amortization                  32,644         13,160          52,855         35,332
  Deferred                                                    
   income tax
   recovery                     (4,287)        (1,592)        (13,028)        (4,161)
  Current                                                     
   income tax
   expense                       11,200          4,978          24,639         10,877
  Finance                                                     
   expenses                      19,637          2,151          23,631          4,393
  Stock-based                                   
   compensation                     192            448           1,228            854
  Other                                                       
   non-cash
   items                    (1,601)        (2,105)         (2,460)        (2,105)
  Foreign                                                     
   exchange
   (gain) loss                      813        (1,334)           (224)          (491)
  Loss (gain)                                                 
   on
   disposition
   of assets                          -              -             362          (330)
  Net loss on                                                 
   discontinued
   operations                         -              -             257              -
  Gain on sale                                                
   of luxury
   brand segment                      -              -       (497,642)              -
Change in                                                      
non-cash
operating
working capital,
excluding taxes
and finance
expenses                         86,412        (4,520)          57,740       (13,126)
Cash provided by                                               
(used in)
operating
activities                      125,908         15,135         127,904         41,219
  Interest paid            (3,861)     (1,019)      (5,073)     (2,277)
  Income and                                                  
   mining taxes
   paid                        (16,906)        (7,986)        (27,155)       (14,860)
Cash provided by                                               
(used in)
operating
activities -
continuing
operations                      105,141          6,130          95,676         24,082
Cash provided by                                               
(used in)
operating
activities -
discontinued
operations                            -          2,430               -          9,424
Net cash from                                                  
(used in)
operating
activities                      105,141          8,560          95,676         33,506
FINANCING                                                           
Decrease in                                                    
interest-bearing
loans and
borrowings                        (196)          (185)           (392)          (370)
Increase in                                                    
revolving credit                      -              -          27,863         27,542
Decrease in                                                    
revolving credit               (27,863)       (24,682)        (28,991)       (25,177)
Repayment of                                                   
senior secured
credit facility                (50,000)              -        (50,000)              -
Issue of common                                                
shares, net of
issue costs                         122              -             516              -
Cash provided                                                  
from financing
activities -
continuing
operations                     (77,937)       (24,867)        (51,004)          1,995
Cash provided                                                  
from financing
activities -
discontinued
operations                            -            771               -          2,632
Cash provided                                                  
from financing
activities                     (77,937)       (24,096)        (51,004)          4,627
INVESTING                                                           
Acquisition of                                                 
Ekati                                 -              -       (490,925)              -
Cash proceeds                                                  
from sale of
luxury brand                          -              -         746,738              -
Property, plant                                                
and equipment -
Diavik                          (5,553)       (15,788)        (16,491)       (33,937)
Property, plant                                                
and equipment -
Ekati                          (28,231)              -        (37,011)              -
Net proceeds                                                   
from sale of
property, plant
and equipment                         -              -           1,796          2,619
Other                                                          
non-current
assets                               76            186         (3,049)            273
Cash provided in                                               
investing
activities -
continuing
operations                     (33,708)       (15,602)         201,058       (31,045)
Cash provided in                                               
investing
activities -
discontinued
operations                            -        (2,353)               -        (7,329)
Cash used in                                                   
investing
activities                     (33,708)       (17,955)         201,058       (38,374)
Foreign exchange                                               
effect on cash
balances                        (2,755)        (4,738)         (2,399)        (3,286)
Increase in cash                                               
and cash
equivalents                     (9,259)       (38,229)         243,331        (3,527)
Cash and cash                                                  
equivalents,
beginning of
period                          356,903        112,818         104,313         78,116
Cash and                                                       
equivalents, end
of period                       347,644         74,589         347,644         74,589
Less cash and                                                  
equivalents of
discontinued
operations, end
of period                             -         20,556               -         20,556
Cash and cash                                                    
equivalents of
continuing
operations, end
of period              $        347,644     $   54,033     $   347,644     $   54,033
Change in                                                      
non-cash
operating
working capital,
excluding taxes
and finance
expenses                                                                         
Accounts                                                       
receivable                          602        (1,562)         (2,581)          (277)
Inventory and                                                  
supplies                        101,706          9,099          70,695       (14,192)
Other current                                                  
assets                              576          3,752           2,356          5,013
Trade and other                                                
payables                       (16,248)       (15,096)        (11,513)        (4,350)
Employee benefit                                               
plans                             (224)          (713)         (1,217)            680
                   $         86,412   $  (4,520)   $    57,740   $ (13,126)
The accompanying notes are an integral part of these consolidated financial
statements.

             Notes to Condensed Consolidated Financial Statements

                    JULY 31, 2013 WITH COMPARATIVE FIGURES
 (TABULAR AMOUNTS IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT AS OTHERWISE
                                    NOTED)

Note 1:
Nature of Operations

Dominion Diamond Corporation is focused on  the mining and marketing of  rough 
diamonds to the global market.

The Company  is  incorporated and  domiciled  in  Canada and  its  shares  are 
publicly traded on the Toronto Stock Exchange and the New York Stock Exchange.
The address of its registered office is Toronto, Ontario.

The Company  has ownership  interests in  the Diavik  and the  Ekati group  of 
mineral claims. The Diavik  Joint Venture (the "Diavik  Joint Venture") is  an 
unincorporated joint arrangement  between Diavik Diamond  Mines Inc.  ("DDMI") 
(60%) and Dominion  Diamond Diavik Limited  Partnership ("DDDLP") (40%)  where 
DDDLP holds an undivided 40% ownership interest in the assets, liabilities and
expenses of  the Diavik  Diamond Mine.  DDMI  is the  operator of  the  Diavik 
Diamond Mine. DDMI is a  wholly owned subsidiary of  Rio Tinto plc of  London, 
England,  and  DDDLP  is  a  wholly  owned  subsidiary  of  Dominion   Diamond 
Corporation. The Company records its  interest in the assets, liabilities  and 
expenses of  the  Diavik Joint  Venture  in its  unaudited  interim  condensed 
consolidated  financial  statements  with  a  one-month  lag.  The  accounting 
policies described below include those of the Diavik Joint Venture.

On April 10, 2013, the Company  completed the $553.1 million acquisition  from 
BHP Billiton Canada Inc. and its  various affiliates of all of BHP  Billiton's 
diamond assets, including its controlling  interest in the Ekati Diamond  Mine 
as well as the associated diamond sorting and sales facilities in Yellowknife,
Canada, and Antwerp, Belgium (the "Ekati Diamond Mine Acquisition"). 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. As a result of the completion of the Ekati Diamond Mine Acquisition
on April 10, 2013, the Company acquired an 80% interest in the Core Zone and a
58.8% interest in the Buffer Zone.  The Company controls and consolidates  the 
Ekati Diamond Mine and minority shareholders are presented as  non-controlling 
interests on the condensed consolidated balance sheet.

Note 2:
Basis of Preparation

(a)Statement of compliance

These unaudited interim condensed consolidated financial statements  ("interim 
financial statements") have been prepared  in accordance with IAS 34  "Interim 
Financial Reporting"  ("IAS 34").  The accounting  policies applied  in  these 
unaudited interim condensed consolidated  financial statements are  consistent 
with those used in  the annual audited  consolidated financial statements  for 
the year ended January 31, 2013, except as disclosed in Note 3.

These unaudited  interim condensed  financial statements  do not  include  all 
disclosures required by International  Financial Reporting Standards  ("IFRS") 
for annual audited consolidated financial statements and accordingly should be
read in conjunction with the  Company's annual audited consolidated  financial 
statements for the  year ended January  31, 2013 prepared  in accordance  with 
IFRS as issued by the International Accounting Standards Board ("IASB").

(b)Currency of presentation

These  unaudited  interim  condensed  consolidated  financial  statements  are 
expressed in United States  dollars, which is the  functional currency of  the 
Company. All financial information presented in United States dollars has been
rounded to the nearest thousand.

(c)Use of estimates, judgments and assumptions

The preparation  of the  unaudited  interim condensed  consolidated  financial 
statements in  conformity with  IFRS requires  management to  make  judgments, 
estimates and assumptions that affect  the application of accounting  policies 
and reported amounts of assets  and liabilities and contingent liabilities  at 
the date of the unaudited interim condensed consolidated financialstatements,
and the reported amounts  of sales and expenses  during the reporting  period. 
Estimates  and  assumptions  are  continually  evaluated  and  are  based   on 
management's experience and  other factors, including  expectations of  future 
events that are believed  to be reasonable  under the circumstances.  However, 
actual outcomes can differ from these estimates.

Note 3:
Significant Accounting Policies

These unaudited interim condensed consolidated financial statements have  been 
prepared following the same accounting policies and methods of computation  as 
the annual  audited consolidated  financial statements  for the  year  ended 
January 31, 2013, except for the following accounting standards that apply  as 
a result of the  Ekati Diamond Mine Acquisition  and new accounting  standards 
and amendment to standards and interpretations, which were effective  February 
1,  2013,  and  applied  in   preparing  these  unaudited  interim   condensed 
consolidated financial statements.  The Company evaluated  the impact to  its 
unaudited interim condensed consolidated financial  statements as a result  of 
the new standards. These are summarized as follows:

(a)Accounting Standards Applied on Ekati Diamond Mine Acquisition

(i)STRIPPING COSTS

Mining costs associated  with stripping  activities in  an open  pit mine  are 
expensed unless the stripping activity can be shown to represent a  betterment 
to  the  mineral  property,  in  which  case  the  stripping  costs  would  be 
capitalized and included  in mining assets.  Capitalized stripping costs  are 
charged against earnings on  a unit-of-production basis over  the life of  the 
mineral reserves.

(ii)EMPLOYEE BENEFIT PLANS

The  Company   operates  defined   benefit   pension  plans,   which   require 
contributions to  be  made  to  separately administered  funds.  The  cost  of 
providing benefits under  the defined benefit  plans is determined  separately 
using the  projected  unit credit  valuation  method by  qualified  actuaries. 
Actuarial gains and losses are  recognized immediately in other  comprehensive 
income.

The defined benefit  asset or  liability comprises  the present  value of  the 
defined benefit obligation, less  the fair value of  plan assets out of  which 
the obligations  are  to  be settled  directly.  The  value of  any  asset  is 
restricted to the present value of any economic benefits available in the form
of refunds from the plan or reductions in future contributions to the plan.

(b)New Accounting Standards

(i)IFRS 10 - CONSOLIDATED FINANCIAL STATEMENTS

IFRS  10,  "Consolidated  Financial  Statements"  ("IFRS  10")  replaces   the 
consolidation  requirements  inSIC-12,   "Consolidation  -  Special   Purpose 
Entities" and IAS  27, "Consolidated and  Separate Financial Statements".  The 
new standard establishes control as  the basis for determining which  entities 
are  consolidated  in  the  consolidated  financial  statements  and  provides 
guidance to assist in  the determination of control  where it is difficult  to 
assess. IFRS 10  did not  have a material  impact on  the Company's  unaudited 
interim condensed  consolidated  financial  statements upon  its  adoption  on 
February 1, 2013.

(ii)IFRS 11 - JOINT ARRANGEMENTS

IFRS 11, "Joint Arrangements" ("IFRS 11") replaces IAS 31, "Interest in  Joint 
Ventures". The new standard applies to  the accounting for interests in  joint 
arrangements where there is joint  control. Under IFRS 11, joint  arrangements 
are classified as either joint ventures or joint operations. The structure  of 
the joint  arrangement  will no  longer  be  the most  significant  factor  in 
determining whether a joint arrangement is  either a joint venture or a  joint 
operation. For a joint venture, proportionate consolidation will no longer  be 
allowed and will  be replaced by  equity accounting.  IFRS 11 did  not have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(iii)IFRS 13 - FAIR VALUE MEASURMENT

IFRS 13, "Fair Value Measurement" ("IFRS 13") generally makes IFRS  consistent 
with generally accepted accounting principles in the United States ("US GAAP")
on measuring fair value and related  fair value disclosures. The new  standard 
creates a single source of guidance for fair value measurements. The  adoption 
of IFRS 13 did not have a  material effect on the Company's unaudited  interim 
condensed consolidated financial  statements. The  disclosure requirements  of 
IFRS 13 will be  incorporated in the  Company's annual consolidated  financial 
statements for the year ended January 31, 2014. This will include  disclosures 
about fair values of financial assets and liabilities measured on a  recurring 
basis and non-financial  assets and  liabilities measured  on a  non-recurring 
basis. The Company  will also  include disclosures about  assumptions used  in 
calculating  fair  value  less  cost  of  disposal  for  its  annual  goodwill 
impairment test.

(iv)IFRIC 20 - STRIPPING COSTS IN THE PRODUCTION PHASE OF A SURFACE MINE

The International  Financial  Reporting  Interpretations  Committee  ("IFRIC") 
issued IFRIC 20, "Stripping Costs in  the Production Phase of a Surface  Mine" 
("IFRIC 20"), which  clarifies the requirements  for accounting for  stripping 
costs  associated  with  waste  removal  in  surface  mining,  including  when 
production stripping costs should be recognized as an asset, how the asset  is 
initially recognized,  and subsequent  measurement. IFRIC  20 did  not have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(v)IAS 19 - EMPLOYEE BENEFITS

Amendments to IAS 19, "Employee Benefits" ("IAS 19") eliminates the option  to 
defer the recognition  of actuarial  gains and losses  through the  "corridor" 
approach, revises  the  presentation  of changes  in  assets  and  liabilities 
arising from defined benefit  plans and enhances  the disclosures for  defined 
benefit plans.IAS 19 is effective for the Company's fiscal year end beginning
February 1,  2013,  with early  adoption  permitted. IAS  19  did not  have  a 
material impact  on the  Company's  unaudited interim  condensed  consolidated 
financial statements upon its adoption on February 1, 2013.

(vi)IAS 1 - PRESENTATION OF FINANCIAL STATEMENTS

Amendments to IAS  1, "Presentation  of Financial Statements"  ("IAS 1")  have 
been  adopted  by  the  Company  on  February  1,  2013,  with   retrospective 
application. The amendments  to IAS  1 require  the grouping  of items  within 
other comprehensive income  that may  be reclassified  to profit  or loss  and 
those that will not be reclassified. The Company has amended its  consolidated 
statement of comprehensive income for all periods presented in these unaudited
interim  condensed   consolidated   financial  statements   to   reflect   the 
presentation changes required under the amended IAS 1. Since these changes are
reclassifications within the  statement of comprehensive  income, there is  no 
net impact on the Company's comprehensive income.

Note 4:
Acquisition

On April 10, 2013, the Company  completed the $553.1 million acquisition  from 
BHP Billiton Canada Inc. and its  various affiliates of all of BHP  Billiton's 
diamond assets, including its controlling  interest in the Ekati Diamond  Mine 
as well as the associated diamond sorting and sales facilities in Yellowknife,
Canada, and Antwerp, Belgium.

Acquisitions are accounted for under the acquisition method of accounting, and
the results  of  operations since  the  respective dates  of  acquisition  are 
included in the statement  of comprehensive income. From  time to time, as  a 
result of the timing  of acquisitions in relation  to the Company's  reporting 
schedules and the availability of information, certain information relating to
the purchase allocations and  valuations may not be  finalized at the time  of 
reporting. Purchase price allocations are completed after the vendor's  final 
financial statements and income tax returns have been prepared and accepted by
the Company within one year  of acquisition. Such preliminary purchase  price 
allocations are based on management's best estimates of the fair value of  the 
acquired asset and liabilities. Upon finalization, adjustments to the  initial 
estimates may be required. The preliminary allocation of the purchase price to
the fair values of assets acquired and liabilities assumed is set forth below.
In accordance with IFRS 3, "Business Combinations" ("IFRS 3"), the provisional
price allocations at  acquisition have  been revised to  reflect revisions  to 
fair values during the second quarter. The final purchase price allocation  is 
expected to be finalized by the end of fiscal 2014.

                                                     
                         Provisional        Further          Fair
                                       fair       adjustments        values at
                                     values                           July 31,
                                                                          2013
Consideration            $     553,142   $              $    553,142
Cash and cash            $      62,217   $              $     62,217
equivalents
Accounts receivable             7,465                       7,465
and other current
assets
Inventory and                 300,248         19,365       319,613
supplies
Property, plant and           800,741                     800,741
equipment
Trade and other              (70,618)                    (70,618)
payables
Income taxes                  (6,085)                     (6,085)
payable
Provisions, future          (348,230)                   (348,230)
site restoration
costs
Deferred income tax          (62,985)        (5,848)      (68,833)
liabilities
Other long-term              (19,017)                    (19,017)
liabilities
Non-controlling             (152,798)                   (152,798)
interest
Total net                     510,938         13,517       524,455
identifiable assets
acquired
Goodwill                       42,204       (13,517)        28,687
                        $     553,142   $           -   $    553,142

In accordance with the  requirements of IFRS 3,  the Company's purchase  price 
allocation has been restated  to incorporate adjustments  to fair values  made 
during the second quarter. No adjustment has been made to the Company's income
statement for  the  quarter  ended April  30,  2013,  as the  effect  was  not 
material. The main adjustments  to the provisional fair  value relates to  the 
fair value attributed to rough diamond inventory acquired as part of the Ekati
Diamond Mine Acquisition and related tax adjustment.

From the closing date of the acquisition, revenues of $190.5 million and a net
loss of $13.1 million were generated by Ekati's operations. If the acquisition
had taken place at the beginning of  the fiscal year, the Company's pro  forma 
revenue from the Ekati mining segment  would have been $299.1 million and  pro 
forma net loss would have  been $4.8 for the six  months ended July 31,  2013. 
The Company has incurred total transaction  costs of $14.4 million related  to 
the Ekati Diamond Mine Acquisition, of  which $11.2 million has been  expensed 
during the current year, with the  balance of $3.2 million expensed in  fiscal 
2013.

Provisions
Future site restoration costs

                                                    
At April 10, 2013 (date of acquisition)      $  348,230
Accretion                                        5,749
At July 31, 2013                             $  353,979

The undiscounted  estimated expenditures  required  to settle  the  obligation 
totals  approximately  $435  million  through  2048  at  an  assumed   average 
Canadian/US dollar exchange  rate of  $1.00. The  expenditures are  discounted 
using a credit-adjusted  risk-free rate of  3.5%. The Company  is required  to 
provide security for future site closure  and reclamation costs for the  Ekati 
Diamond Mine's operations and for various permits and licenses. As at July 31,
2013, the Company provided CDN $127  million in letters of credit as  security 
with various regulatory authorities.

Note 5:
Inventory and Supplies

                                                   January 31,
                                         July 31, 2013              2013
Rough diamonds                    $       162,396   $      45,467
Supplies inventory                       206,741         70,160
Total inventory and supplies      $       369,137   $     115,627

Total inventory and supplies  is net of a  provision for obsolescence of  $0.1 
million ($0.4 million at January 31, 2013).

Note 6:
Assets Held for Sale (Discontinued Operations)

On March 26, 2013, the Company completed the sale of the Luxury Brand  Segment 
to Swatch  Group. As  a result  of  the sale,  the Company's  corporate  group 
underwent name changes to remove references to "Harry Winston". The Company's
name was changed to "Dominion Diamond Corporation" and its common shares trade
on both the Toronto and New York stock exchanges under the symbol "DDC".

The major classes  of assets  and liabilities of  the discontinued  operations 
were as follows at the date of disposal:

                                                  March 26,
                                                              2013
Cash and cash equivalents                         $    25,914
Accounts receivable and other current assets          61,080
Inventory and supplies                               403,157
Property, plant and equipment                         76,700
Intangible assets, net                               126,779
Other non-current assets                               7,478
Deferred income tax assets                            54,017
Trade and other payables                            (96,246)
Income taxes payable                                 (2,465)
Interest-bearing loans and borrowings              (292,709)
Deferred income tax liabilities                    (106,137)
Other long-term liabilities                          (8,472)
Net assets                                        $   249,096
Consideration received, satisfied in cash         $   746,738
Cash and cash equivalents disposed of               (25,914)
Net cash inflow                                   $   720,824

Results of the discontinued operations are presented separately as net  profit 
from discontinued operations in  the unaudited interim condensed  consolidated 
income statements, and comparative periods have been adjusted accordingly.

                                      Period ended        Six months
                                                March 26,       ended July 31,
                                                     2013                 2012
Sales                                 $       63,799   $        218,876
Cost of sales                              (31,355)         (106,945)
Other expenses                             (30,964)         (101,514)
Other income and foreign                    (1,551)             (853)
exchange gain (loss)
Net income tax (expense)                      (186)           (3,177)
recovery
Net profit (loss) from                $        (257)   $          6,387
discontinued operations before
gain
Gain on sale                                497,642                 -
Net profit from discontinued                497,385             6,387
operations
Earnings per share -                                               
discontinued operations
Basic                              $         5.86   $           0.08
Diluted                                    5.80              0.07

Note 7:
Restricted Cash

The Company provides letters of credit to the Government of Canada of CDN $127
million, supported by restricted cash for the reclamation obligations for  the 
Ekati Diamond Mine.

Note 8:
Diavik Joint Venture

The following represents DDDLP's 40% interest  in the Diavik Joint Venture  as 
at June 30, 2013 and December 31, 2012:

                                      July 31, 2013    January 31,
                                                                          2013
Current assets                      $         100,544   $     102,299
Non-current assets                           651,682        677,808
Current liabilities                           25,198         30,517
Non-current liabilities and                  727,028        749,590
participant's account
                                                      

                   Three        Three          Six          Six
                       months          months          months          months
                        ended           ended           ended           ended
                     July 31,        July 31,        July 31,        July 31,
                         2013            2012            2013            2012
Expenses                                                 
net of
interest
income ^(a)
^(b)             $    59,036     $    58,585     $   125,683     $   115,323
Cash flows       (45,352)     (55,022)     (90,180)     (97,375)
used in
operating
activities
Cash flows         50,435       50,668      103,594       112,200
resulting
from
financing
activities
Cash flows        (4,692)      (3,958)     (15,403)     (19,141)
used in
investing
activities

^(a)The Joint Venture only earns interest income.
^(b)Expenses net of interest income for the three and six months ended July
31, 2013 of $nil and $0.1 million (three and six months ended July 31, 2012 of
$nil and $0.1 million).

DDDLP is contingently  liable for  DDMI's portion  of the  liabilities of  the 
Diavik Joint Venture,  and to  the extent DDDLP's  participating interest  has 
increased because of  the failure  of DDMI to  make a  cash contribution  when 
required, DDDLP would have access to an increased portion of the assets of the
Diavik Joint Venture  to settle these  liabilities. Additional information  on 
commitments and contingencies related to the Diavik Joint Venture is found  in 
Note 12.

Note 9:
Employee Benefit Plans

The employee benefit obligation reflected  in the unaudited interim  condensed 
consolidated balance sheet is as follows:

                                        July 31,    January 31,  
                                                     2013              2013
Post-retirement benefit plan -        $        748   $         699  
Diavik Diamond Mine (c)
Defined benefit plan obligation            17,978              -  
- Ekati Diamond Mine (a)
Defined contribution plan                     200              -  
obligation - Ekati Diamond Mine
(b)
Defined contribution plan                     151              - 
obligation - the Company's head
office (b)
RSU and DSU plans (d)                       3,669          5,434  
Total employee benefit plan           $     22,746   $       6,133  
obligation
                                                              
                                        July 31,    January 31,  
                                                     2013              2013
Non-current                           $     21,399   $       3,499 
Current                                     1,347          2,634 
Total employee benefit plan           $     22,746   $       6,133 
obligation

(a)Defined benefit pension plan

Dominion Diamond Ekati Corporation sponsors a non-contributory defined benefit
registered pension plan covering employees in Canada who were employed by  BHP 
Billiton Canada Inc. and  employed in its diamond  business prior to June  30, 
2004. As  a result  of the  Ekati  Diamond Mine  Acquisition, the  plan  was 
assigned to  Dominion  Diamond  Ekati Corporation  and  renamed  the  Dominion 
Diamond Ekati Corporation Defined Benefit Pension Plan. Pension benefits  are 
based on the  length of  service and  highest average  covered earnings.  Any 
benefits in excess of the maximum  pension limit for registered pension  plans 
under  the  Income  Tax  Act  accrue   for  the  employee,  via  an   unfunded 
supplementary retirement plan. New employees could not become members of this
defined benefit pension arrangement after June 30, 2004.

(i)NET BENEFIT OBLIGATION:

                                       July 31, 2013
Accrued benefit obligation             $        81,402
Plan assets                                    63,424
Funded status - plan deficit           $      (17,978)

(ii)PLAN ASSETS

Canadian plan assets  represented approximately  95% of total  plan assets  at 
July 31, 2013.

The asset allocation of pension assets at July 31 was as follows:

                                July 31, 2013
ASSET CATEGORY                               
Cash equivalents                            2%
Equity securities                          10%
Fixed income securities                    88%
Total                                     100%

(iii)THE SIGNIFICANT ASSUMPTIONS USED FOR THE PLAN ARE AS FOLLOWS:

                                                      July 31, 2013
ACCRUED BENEFIT OBLIGATION                                         
Discount rate                                                  4.50%
Expected long-term rate of return                              4.00%
BENEFIT COSTS FOR THE YEAR                                         
Discount rate                                                  4.10%
Expected long-term rate of return on plan assets               3.85%
Rate of compensation increase                                  4.25%

(b)Defined contribution plan

The  Diavik  Joint  Venture  sponsors  a  defined  contribution  plan  whereby 
theemployer contributes 6% of the employee's salary.

Dominion Diamond Corporation sponsors a defined contribution plan for Canadian
employees whereby  the  employer  contributes  to  a  maximum  of  6%  of  the 
employee's salary to the maximum contribution limit under Canada's Income  Tax 
Act. The total defined contribution plan liability at July 31, 2013 was  $0.2 
million ($nil at January 31, 2013).

Dominion Diamond Ekati Corporation sponsors a defined contribution arrangement
for its employees  who are  not members of  the defined  benefit pension  plan 
referred to in 9(a) above. The employer contributes 8% of earnings up to  2.5 
times the Year's  Maximum Pensionable  Earnings (as defined  under the  Canada 
Pension Plan), and 12%  of earnings above 2.5  times YMPE. The employer  also 
matches additional contributions made  by an employee up  to 3% of  earnings. 
Employer contributions in excess of the maximum contribution limit for defined
contribution plans under Canada's Income Tax Act are credited by the  employer 
to  a  notional   (unfunded)  supplementary  retirement   plan.  The   defined 
contribution plan liability at July  31, 2013 was $0.2 million.  (Supplemental 
plan liability has been included  in the accrued benefit obligation  disclosed 
in 9(a) above.)

(c)Post-retirement benefit plan

The Diavik  Joint Venture  provides  non-pension post-retirement  benefits  to 
retired employees. The post-retirement benefit plan liability was $0.7 million
at July 31, 2013 ($0.7 million at January 31, 2013).

(d)RSU and DSU plans

Grants under the RSU  Plan are on  a discretionary basis  to employees of  the 
Company and its subsidiaries subject to Board of Directors approval. The  RSUs 
granted  vest  one-third  on  March  31  and  one-third  on  each  anniversary 
thereafter. The vesting of grants  of RSUs is subject  to special rules for  a 
change in control, death and disability. The Company shall pay out cash on the
respective vesting dates of RSUs and redemption dates of DSUs.

Only non-executive directors of the Company are eligible for grants under  the 
DSU Plan. Each DSU grant vests immediately on the grant date.

The expenses related to  the RSUs and  DSUs are accrued  based on fair  value. 
This expense is recognized on a straight-line basis over each vesting period.

Note 10:
Interest-Bearing Loans and Borrowings

                                           July       January
                                                          31,              31,
                                                         2013             2013
Credit facilities                      $        -   $     49,560
First mortgage on real                     5,065         5,619
property
Bank advances                                  -         1,128
Total interest-bearing loans               5,065        56,307
and borrowings
Less current portion                       (827)      (51,508)
                                      $    4,238   $      4,799

                                                                               Face
                                                             Carrying         value
                                                               amount            at
                               Nominal                             at          July
                              interest         Date of       July 31,           31,
           Currency        rate     maturity        2013       2013    Borrower
First            CDN       7.98%    September        $5.1       $5.1     6019838
mortgage                                       1, 2018        million       million         Canada
on real                                                                                       Inc.
property

On May 31, 2013, the Company repaid the $50.0 million outstanding on its
secured bank loan.

Note 11:
Related Party Disclosure

(a)Operational information

The Company had the following investments in significant subsidiaries at  July 
31, 2013:

Name of company                        Effective          Country of
                                             interest            incorporation
Dominion Diamond Holdings Ltd.              100%              Canada
Dominion Diamond Diavik Limited             100%              Canada
Partnership
Dominion Diamond (India) Private            100%               India
Limited
Dominion Diamond International NV           100%             Belgium
Dominion Diamond Marketing                  100%              Canada
Corporation.
6019838 Canada Inc.                         100%              Canada
Dominion Diamond Ekati                      100%              Canada
Corporation
Dominion Diamond Resources                  100%              Canada
Corporation
Dominion Diamond Marketing NV               100%             Belgium

Note 12:
Commitments and Guarantees

(a)Environmental agreements

Through negotiations of  environmental and other  agreements, both the  Diavik 
Joint  Venture  and  Ekati   Diamond  Mine  must   provide  funding  for   the 
Environmental Monitoring  Advisory Board,  and the  Independent  Environmental 
Monitoring Agency, respectively.  Further funding will  be required in  future 
years;  however,  specific  amounts  have  not  yet  been  determined.   These 
agreements also state that the mines must provide security for the performance
of their reclamation and abandonment obligations under all environmental  laws 
and regulations. DDDLP's share of the letters of credit outstanding posted  by 
the operator of  the Diavik Joint  Venture with respect  to the  environmental 
agreements as at July  31, 2013, was $63  million. The agreement  specifically 
provides that these funding requirements  will be reduced by amounts  incurred 
by the Diavik  Joint Venture  on reclamation and  abandonment activities.  The 
Company has posted letters of credit  of CDN $127 million with the  Government 
of  Canada  supported  by  restricted  cash  in  support  of  the  reclamation 
obligations for the Ekati Diamond Mine.

(b)Participation agreements

Both the Diavik Joint Venture and Ekati Diamond Mine have signed participation
agreements with  various  native  groups. These  agreements  are  expected  to 
contribute to the social, economic  and cultural well-being of the  Aboriginal 
bands. The Diavik  participation agreements are  each for an  initial term  of 
twelve years and shall be automatically renewed on terms to be agreed upon for
successive periods  of  six years  thereafter  until termination.  The  Diavik 
participation agreements terminate in the  event that the Diavik Diamond  Mine 
permanently ceases to  operate. Dominion  Diamond Corporation's  share of  the 
Diavik Joint Venture's participation agreements as  at July 31, 2013 was  $1.1 
million. The Ekati Diamond Mine  participation agreements are in place  during 
the life of the Ekati Diamond Mine  and the agreements terminate in the  event 
of the mine ceases to operate.

(c)Operating lease commitments

The Company has entered into  non-cancellable operating leases for the  rental 
of fuel tanks and office premises for the Ekati Diamond Mine, which expire  at 
various dates through 2016. The leases have varying terms, escalation  clauses 
and renewal rights. Any renewal terms are at the option of the lessee at lease
payments based on market prices at the time of renewal. Minimum rent  payments 
under operating leases are recognized on  a straight-line basis over the  term 
of the  lease,  including any  periods  of  free rent.  Future  minimum  lease 
payments under non-cancellable  operating leases as  at July 31,  2013 are  as 
follows:

                                                             
Within one year                                       $    5,040
After one year but not more than five years               9,847
More than five years                                      4,058
                                                     $   18,945

Note 13:
Capital Management

The  Company's  capital  includes  cash  and  cash  equivalents,  current  and 
non-current interest-bearing loans and  borrowings and equity, which  includes 
issued common shares, contributed surplus and retained earnings.

The Company's primary objective with respect  to its capital management is  to 
ensure  that  it  has  sufficient  cash  resources  to  maintain  its  ongoing 
operations,  to  provide  returns  to  shareholders  and  benefits  for  other 
stakeholders, and to  pursue growth  opportunities. To meet  these needs,  the 
Company may from time to time raise additional funds through borrowing  and/or 
the issuance  of  equity or  debt  or  by securing  strategic  partners,  upon 
approval by  the  Board of  Directors.  The  Board of  Directors  reviews  and 
approves any material  transactions out  of the ordinary  course of  business, 
including  proposals   on  acquisitions   or   other  major   investments   or 
divestitures, as well as annual capital and operating budgets.

The Company assesses liquidity and capital resources on a consolidated  basis. 
The Company's requirements are for  cash operating expenses, working  capital, 
contractual debt requirements and  capital expenditures. The Company  believes 
that  it  will   generate  sufficient  liquidity   to  meet  its   anticipated 
requirements for the next twelve months.

Note 14:
Financial Instruments

The Company  has  various  financial  instruments  comprising  cash  and  cash 
equivalents,   accounts   receivable,   trade   and   other   payables,    and 
interest-bearing loans and borrowings.

Cash and cash equivalents consist of cash on hand and balances with banks  and 
short-term  investments  held  in  overnight  deposits  with  a  maturity   on 
acquisition of  less  than 90  days.  Cash  and cash  equivalents,  which  are 
designated as  held-for-trading, are  carried at  fairvalue based  on  quoted 
market prices and are  classified within Level 1  of the fair value  hierarchy 
established by the International Accounting Standards Board.

The fair value  of accounts  receivable is determined  by the  amount of  cash 
anticipated to be received in the normal course of business from the financial
asset.

The Company's  interest-bearing loans  and borrowings  are for  the most  part 
fully secured; hence the fair values of these instruments at July 31, 2013 are
considered to approximate their carrying value.

The carrying values and estimated  fair values of these financial  instruments 
are as follows:

                                          July 31, 2013                   January 31, 2013
                         Estimated      Carrying     Estimated      Carrying
                                      fair              value              fair              value
                                     value                                value
Financial assets                                                         
 Cash and cash         $    347,644   $    347,644   $    104,313   $    104,313
  equivalents
 Accounts                    7,603         7,603         3,705         3,705
  receivable
                       $    355,247   $    355,247   $    108,018   $    108,018
Financial                                                                
liabilities
 Trade and other       $    103,117   $    103,117   $     39,053   $     39,053
  payables
 Interest-bearing            5,065         5,065        56,307        56,307
  loans and
  borrowings
                       $    108,182   $    108,182   $     95,360   $     95,360

Note 15:
Segmented Information

The Company operates in  three segments within the  diamond industry -  Diavik 
Diamond Mine, the  Ekati Diamond  Mine and Corporate  - for  the three  months 
ended July 31, 2013.

The Diavik segment  consists of the  Company's 40% ownership  interest in  the 
Diavik group  of mineral  claims and  the sale  of rough  diamonds. The  Ekati 
segment consists of  the Company's ownership  interest in the  Ekati group  of 
mineral claims and the sale of rough diamonds. The Corporate segment  captures 
all costs not specifically related to  the operations of the Diavik and  Ekati 
diamond mines.

For the three             Diavik        Ekati     Corporate        Total
months ended
July 31, 2013
Sales                                                               
 North America       $         -   $         -   $          -   $         -
 Europe                  80,530      170,536             -      251,066
 India                   10,737            -             -       10,737
 Total sales             91,267      170,536             -      261,803
Cost of sales                                                       
 Depreciation            21,645       10,513             -       32,158
  and
  amortization
 All other               46,683      155,531             -      202,214
  costs
 Total cost of           68,328      166,044             -      234,372
  sales
Gross margin              22,939        4,492             -       27,431
Gross margin (%)           25.1%         2.6%            -%        10.5%
Selling, general                                                    
and
administrative
expenses
 Selling and              1,409          676             -        2,085
  related
  expenses
 Administrative               -            -        12,971       12,971
  expenses
 Total selling,           1,409          676        12,971       15,056
  general and
  administrative
  expenses
Operating profit          21,530        3,816      (12,971)       12,375
(loss)
Finance expenses        (15,710)      (3,927)             -     (19,637)
Exploration              (2,210)        (935)             -      (3,145)
costs
Finance and                  767          265             -        1,032
other income
Foreign exchange         (1,044)      (1,770)             -      (2,814)
loss
Segmented profit      $     3,333   $   (2,551)   $   (12,971)   $  (12,189)
(loss) before
income taxes
Segmented assets                                                    
as at July 31,
2013
 Canada              $ 1,052,351   $ 1,209,335   $          -   $ 2,261,686
 Other foreign           30,011        3,606             -       33,617
  countries
                     $ 1,082,362   $ 1,212,941   $          -   $ 2,295,303
Capital               $     5,553   $    28,231   $          -   $    33,784
expenditures
Inventory                120,696      248,441             -      369,137
Other                                                               
significant
non-cash items:
 Deferred            $     4,063   $   (8,350)   $          -   $   (4,287)
  income tax
  expense
  (recovery) 
                                                           
                                                           
For the three             Diavik        Ekati     Corporate        Total
months ended
July 31, 2012
Sales                                                               
 North America       $     2,269   $         -   $          -   $     2,269
 Europe                  50,514            -             -       50,514
 India                    8,690            -             -        8,690
 Total sales             61,473            -             -       61,473
Cost of sales                                                       
 Depreciation            12,449            -             -       12,449
  and
  amortization
 All other               34,335            -             -       34,335
  costs
 Total cost of           46,784            -             -       46,784
  sales
Gross margin              14,689            -             -       14,689
Gross margin (%)           23.9%                        -%        23.9%
Selling, general                                                    
and
administrative
expenses
 Selling and              1,050            -             -        1,050
  related
  expenses
 Administrative               -            -         4,700        4,700
  expenses
 Total selling,           1,050            -         4,700        5,750
  general and
  administrative
  expenses
Operating profit          13,639            -       (4,700)        8,939
(loss)
Finance expenses         (2,151)            -             -      (2,151)
Exploration                (568)            -             -        (568)
costs
Finance and                   67            -             -           67
other income
Foreign exchange           1,048            -             -        1,048
gain
Segmented profit      $    12,035   $         -   $    (4,700)   $     7,335
(loss) before
income taxes
Segmented assets                                                    
as at July 31,
2012
 Canada              $   937,687   $         -   $          -   $   937,687
 Other foreign           22,682            -             -       22,682
  countries
                     $   960,369   $         -   $          -   $   960,369
Capital               $    15,788   $         -   $          -   $    15,788
expenditures
Inventory                141,678            -             -      141,678
Other                                                               
significant
non-cash items:
 Deferred            $   (1,592)   $         -   $          -   $   (1,592)
  income tax
  recovery
                                                          
                                                          
For the six               Diavik        Ekati     Corporate        Total
months ended
July 31, 2013
Sales                                                               
 North America       $     6,179   $         -   $          -   $     6,179
 Europe                 142,172      190,457             -      332,629
 India                   31,832            -             -       31,832
 Total sales            180,183      190,457             -      370,640
Cost of sales                                                       
 Depreciation            41,187       10,513             -       51,700
  and
  amortization
 All other               89,029      175,178             -      264,207
  costs
 Total cost of          130,216      185,691             -      315,907
  sales
Gross margin              49,967        4,766             -       54,733
Gross margin (%)           27.7%         2.5%            -%        14.8%
Selling, general                                                    
and
administrative
expenses
 Selling and              2,518        1,196             -        3,714
  related
  expenses
 Administrative               -            -        28,184       28,184
  expenses
 Total selling,           2,518        1,196        28,184       31,898
  general and
  administrative
  expenses
Operating profit          47,449        3,570      (28,184)       22,835
(loss)
Finance expenses        (17,729)      (5,902)             -     (23,631)
Exploration              (3,250)        (935)             -      (4,185)
costs
Finance and                1,307          529             -        1,836
other income
Foreign exchange             516      (2,599)             -      (2,083)
gain (loss)
Segmented profit      $    28,293   $   (5,337)   $   (28,184)   $   (5,228)
(loss) before
income taxes
Segmented assets                                                    
as at July 31,
2013
 Canada              $ 1,052,351   $ 1,209,335   $          -   $ 2,261,686
 Other foreign           30,011        3,606             -       33,617
  countries
                     $ 1,082,362   $ 1,212,941   $          -   $ 2,295,303
Capital               $    16,491   $    37,011   $          -   $    53,502
expenditures
Inventory                120,696      248,441             -      369,137
Other                                                               
significant
non-cash items:
 Deferred            $     (412)   $  (12,616)   $          -   $  (13,028)
  income tax
  recovery 
                                                           

Sales to one customer totaled $49.0 million for the six months ended July  31, 
2013.

For the six               Diavik       Ekati     Corporate       Total
months ended
July 31, 2012
Sales                                                             
 North America       $     9,701   $        -   $          -   $    9,701
 Europe                 104,884           -             -     104,884
 India                   35,897           -             -      35,897
 Total sales            150,482           -             -     150,482
Cost of sales                                                     
 Depreciation            33,954           -             -      33,954
  and
  amortization
 All other               82,929           -             -      82,929
  costs
 Total cost of          116,883           -             -     116,883
  sales
Gross margin              33,599           -             -      33,599
Gross margin (%)           22.3%                       -%       22.3%
Selling, general                                                  
and
administrative
expenses
 Selling and              2,023           -             -       2,023
  related
  expenses
 Administrative               -           -        10,467      10,467
  expenses
 Total selling,           2,023           -        10,467      12,489
  general and
  administrative
  expenses
Operating profit          31,576           -      (10,467)      21,110
(loss)
Finance expenses         (4,393)           -             -     (4,393)
Exploration                (822)           -             -       (822)
costs
Finance and                  119           -             -         119
other income
Foreign exchange             678           -             -         678
gain
Segmented profit      $    27,158   $        -   $   (10,467)   $   16,692
(loss) before
income taxes
Segmented assets                                                  
as at July 31,
2012
 Canada              $   937,687   $        -   $          -   $  937,687
 Other foreign           22,682           -             -      22,682
  countries
                     $   960,369   $        -   $          -   $  960,369
Capital               $    33,937   $        -   $          -   $   33,937
expenditures
Inventory                141,678           -             -     141,678
Other                                                             
significant
non-cash items:
 Deferred            $   (4,161)   $        -   $          -   $  (4,161)
  income tax
  recovery



















SOURCE Dominion Diamond Corporation

Contact:

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

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