Dominion Diamond Corporation Issues Updated Mine Plans for the Ekati and Diavik Diamond Mines

Dominion Diamond Corporation Issues Updated Mine Plans for the Ekati and 
Diavik Diamond Mines 
TORONTO, Feb. 3, 2014 /CNW/ - Dominion Diamond Corporation (TSX:DDC, NYSE:DDC) 
(the "Company") is pleased to release an updated life-of-mine plan for each of 
the Ekati and Diavik Diamond Mines, including current estimates for 
anticipated annual production by pipe, with associated operating costs and 
capital costs. 
Highlights: 


        --  Both mines are performing well; Diavik as an all underground
            mine and Ekati as a combination open pit-underground mine.
        --  The operating cost forecasts in the updated Diavik mine plan
            demonstrate substantial savings compared with the previously
            published mine plan (2012), whilst mining and processing an
            increased amount of ore.
        --  The new Ekati Mine Plan includes the first detailed production
            forecast based on reserves only to the Dominion Diamond fiscal
            year end (January 31st) with production currently forecast to
            run through to fiscal 2020.
        --  The synergies, cost savings and efficiencies brought about by
            the integration of the Ekati and Diavik sales and sorting
            processes and resources are already demonstrating benefits.

Unless otherwise specified, all financial information is presented in Canadian 
dollars, on a 100% basis, and references to years are to calendar years unless 
otherwise stated. The Company has an 80% interest in the Ekati Diamond Mine as 
well as a 58.8% interest in the surrounding areas, and a 40% interest in the 
Diavik Diamond Mine.

About Dominion Diamond Corporation

Dominion Diamond Corporation is a Canadian diamond mining company with 
ownership interests in two of the world's highest rock value 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 additional resources. 
 It also sells diamonds from its 40% ownership in the Diavik Diamond Mine.

For more information, please visit www.ddcorp.ca

Forward-Looking Information

Information included herein that is not current or historical factual 
information, including information about estimated mine life and other plans 
regarding mining activities at the Ekati Diamond Mine and Diavik Diamond Mine, 
estimated reserves and resources at, and production from, the Ekati Diamond 
Mine and Diavik Diamond Mine, projected capital and operating costs, and 
future diamond prices, constitute forward-looking information or statements 
within the meaning of applicable securities laws. Forward-looking information 
can generally be identified by the use of terms such as "may", "will", 
"should", "could", "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 
is based on certain factors and assumptions including, among other things, 
mining, production, construction and exploration activities at the Company's 
mineral properties; mining methods; currency exchange rates; required 
operating and capital costs; labour and fuel costs; world and US economic 
conditions; future diamond prices; and the level of worldwide diamond 
production. 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. 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 disclosure, 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 disclosure, 
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. Additional information concerning factors that may cause 
actual results to materially differ from those in such forward-looking 
statements is contained in the Company's filings with Canadian and United 
States securities regulatory authorities and can be found at www.sedar.com and 
www.sec.gov, respectively.

2014 Mine Plan for Ekati and Diavik Diamond Mines

Introduction

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

The Diavik Diamond Mine is an unincorporated joint arrangement (the "Diavik 
Joint Venture") between Diavik Diamond Mines (2012) 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 
and DDDLP are headquartered in Yellowknife, Canada. DDMI is a wholly owned 
subsidiary of Rio Tinto plc ("Rio Tinto") of London, England.

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

Given that each mine has different ownership structures, operators, and 
operational year ends, the mine plans are each presented separately, on a 100% 
basis. Other economic factors that are directly related to the Company, such 
as marketing costs, diamond prices, and private royalties, are discussed 
separately at the end of this document. Unless otherwise specified, all 
financial information is presented in Canadian dollars, on a 100% basis, and 
references to years are to calendar years.

Diavik Diamond Mine - Production

This updated plan is derived from DDMI's estimates, based on the current 
reserve and resources as of December 31, 2012.  The reserve and resource 
information that is the basis for this plan was prepared by or under the 
supervision of Calvin G. Yip, P. Eng., an employee of DDMI and a Qualified 
Person within the meaning of National Instrument 43-101.  All other scientific 
and technical information set out in this updated plan was prepared by or 
under the supervision of Mats Heimersson, P. Eng., an employee of the Company 
and a Qualified Person within the meaning of National Instrument 43-101.  With 
DDMI's support, the Company is preparing an updated technical report on the 
mineral resources and mineral reserves at the Diavik Diamond Mine. The Company 
expects to file this technical report in the third quarter of calendar 2014.

The Diavik Diamond Mine has been in production since 2003. To December 31, 
2013, the mine has produced approximately 84 million carats of diamonds from 
the processing of approximately 22 million tonnes of kimberlite and has 
transitioned from an open pit operation to a fully underground mine.

Early planning of the underground mining at the Diavik Diamond Mine identified 
a number of possible mining methods. Since September 2012, Diavik has been an 
entirely underground operation.  Presently Blast Hole Stoping ("BHS") is 
employed in the A-154 North pipe with lower cost Cemented Rock Fill ("CRF") 
being used rather than the more expensive cemented paste that was originally 
planned. As a result of the increasing understanding of the ground conditions 
as the underground operations were developed, the optimal mining methodology 
for the A-154 South pipe and the A-418 pipe resulted in the use of Sub Level 
Retreat ("SLR"). This mine plan is based on the current mining method, and 
this may change in the future as DDMI is continually looking at improvements 
in mining methods, material handling, and cost reduction in general.

Table 1 shows the planned mining tonnage for each ore body, and Table 2 the 
corresponding carat estimates. The data is shown on an annualised basis 
starting in calendar 2013 and does not include rough diamond stocks at the 
mine at the opening of the year.  In addition, the plan does not take into 
account any rough diamond inventory available for sale that the Company 
currently holds.  In 2013, Diavik processed an additional 0.15 million tonnes 
of stockpiled ore that produced 0.44 million carats, and in 2014 Diavik plans 
to process 0.20 million tonnes of stockpiled ore that is estimated to produce 
0.54 million carats.

Table 1: Tonnage Mined - Diavik Diamond Mine (100% Basis)
                  
          Reserves (Tonnes Millions)        
    Year   A154S  A154N         A418  Total 
    2013    0.54   0.72         0.69    1.95
    2014    0.42   0.70         0.79    1.91
    2015    0.40   0.70         0.80    1.90
    2016    0.31   0.77         0.86    1.94
    2017    0.32   0.82         0.74    1.88
    2018    0.31   0.67         0.69    1.67
    2019    0.32   0.77         0.73    1.82
    2020    0.09   0.76         0.60    1.45
    2021       -   0.82         0.53    1.35
    2022       -   0.87         0.48    1.35
    2023       -   0.61         0.34    0.95
    Total   2.71   8.22         7.25   18.18
    Figures may not add up due to rounding. 

Table 2: Carats from mined ore - Diavik Diamond Mine (100% Basis)
                                           
          Reserves (Carat Millions)        
    Year   A154S  A154N        A418   Total
    2013    2.41   1.50        2.48    6.39
    2014    1.64   1.47        2.85    5.97
    2015    1.40   1.46        3.22    6.08
    2016    1.07   1.75        3.23    6.05
    2017    1.15   1.92        2.89    5.96
    2018    1.15   1.50        2.56    5.22
    2019    1.20   1.67        2.54    5.42
    2020    0.36   1.57        1.97    3.90
    2021       -   1.68        1.59    3.27
    2022       -   1.76        1.29    3.05
    2023       -   1.19        0.95    2.14
    Total  10.40  17.48       25.57   53.45
    Figures may not add up due to rounding.

The current reserve base supports mining operations at Diavik up to 2023. In 
addition to the current reserves, there are 2.6 million tonnes of inferred 
resources (in the aggregate) distributed amoung the lower parts of each of 
A-154 South, A-418 and most significantly, A-154 North, that could potentially 
further expand operations. DDMI currently expects to process this material as 
part of its mining operations as they reach the lower levels of each pipe. 
However, inferred mineral resources are considered too geologically 
speculative to have the economic considerations applied to them that would 
enable them to be categorized as mineral reserves, and there is no certainty 
that they will be mined. They have therefore not been included in the above 
mine plan. Mineral resources that are not mineral reserves do not have 
demonstrated economic viability. The three pipes currently in production also 
extend below the current inferred resource horizons although additional 
economic ore may be limited in volume and might not add longevity to the mine 
life.  DDMI has an ongoing drilling and sampling program intended to support 
the mining of the inferred material and, potentially, beyond.  In addition, if 
a decision is taken to develop the A-21 pipe this would be additional ore at 
the end of the life of the mine.

The Diavik processing plant has a potential capacity to process over 2 million 
tonnes a year.  To supplement mined ore, Diavik plans to continue processing 
old coarse ore rejects material ("COR"). The grade of this material is 
variable but is generally high as shown by the results from COR production 
from 2012 and 2013 contained in Table 3. Based on these historical recovery 
rates, the tonnage of this material which is planned to be processed during 
calendar 2014 would have produced 0.6 million carats from COR.  The remaining 
60,000 tonnes of target COR material that could be processed in later years is 
not anticipated to be of the same high grade.

Table 3: Coarse Ore Rejects tonnes and carats - Diavik Diamond Mine (100% 
Basis)
                               
       COR     Tonnes   Grade Carats
    Production  000's Cts per  000's
                        Tonne
        2012      5.3    26.1  139.0
        2013     14.4    26.9  388.0

Improvements to the recovery process for small diamonds is expected to result 
in a 3% increase in carat yield beyond the stated reserve and resource grade.  
It should be noted that the average size of diamonds recovered from COR 
material and the improvements in diamond recovery are significantly below the 
run-of-mine from the main ore bodies, and this is reflected in the modelled 
price per carat. The diamonds recovered from COR and improved small diamond 
recovery are not currently included in the Company's reserves and resource 
statement.

This mine plan does not include any production from the A-21 pipe.  The 
development of the A-21 pipe continues to be under review but no decision has 
been made to develop this pipe at this time since the identification of 
extensions to the existing pipes has decreased the urgency to bring the pipe 
into the mine plan in the short term.  As with the other pipes at Diavik, A-21 
is located below the water of Lac de Gras. A pre-feasibility study proposes 
mining approximately 3.6 million tonnes of ore on an open pit basis, which is 
expected to yield approximately 10 million carats.  The Company estimates the 
quality of the diamonds to be similar to those from A-154 South. DDMI 
continues to refine the project with a focus on reducing capital costs.  
Mineral resources that are not mineral reserves do not have demonstrated 
economic viability.

Diavik Diamond Mine - Capital and Operating Costs

The initial capital to build the Diavik Diamond Mine was spent between late 
1999 and early 2003.  Construction was completed on budget and ahead of 
schedule. From 2004 to the end of 2012, capital expenditures were for 
sustaining the operation and for carrying out planned mine developments.  
Sustaining capital included scheduled processed kimberlite containment dam 
raises, improvements to the processing plant, planned additions to the mine 
equipment fleet, rotating replacements of light vehicles, geology drilling, 
purchase of critical spares, and general improvements across the operations.  
Mine development capital included the A-418 dike, A-154 & A-418 underground 
decline, the A-21 decline, underground test mining and bulk sampling of 
kimberlite, a number of studies leading up to the present mine development 
plan, and some pre-works construction for the new developments and underground 
construction.

The capital, reclamation and operating costs for this latest reserves-based 
plan are based on DDMI's estimates. Table 4 shows currently estimated 
sustaining capital: with the completion of the underground development in 
2013, no further development capital is required under this plan going 
forward.  The costs shown include estimated contingencies where applicable, 
but do not include any escalation or risk contingency amounts for unforeseen 
events. In addition to ongoing equipment replacements and general operational 
upgrades, sustaining capital will include certain categories of ongoing 
underground excavation to maintain mining advances to increasing depths.

Table 4 also shows currently estimated operating costs based on DDMI's 
operating experience, adjusted to present-day dollar terms.  Given the remote 
location of the Diavik Diamond Mine, a large portion of the operating 
expenditure is relatively fixed, with the major cost items being human 
resources and fuel (for both power and equipment). Not shown in Table 4 are 
marketing costs or private royalties as these factors are discussed separately 
at the end of this document.

Table 4: Operating and Capital Costs - Diavik Diamond Mine (100% Basis)
                                          
                       CAPITAL COSTS     OPERATING COSTS
    Calendar
      Year                                  Direct and
             Developing Sustaining Total      Indirect
                  C$m        C$m    C$m           C$m
       2013           7         55    62             415
       2014          -          52    52             408
       2015          -          46    46             392
       2016          -          40    40             392
       2017          -          32    32             384
       2018          -          38    38             372
       2019          -          27    27             398
       2020          -          10    10             373
       2021          -           2     2             375
       2022          -           2     2             380
       2023          -           2     2             315  
     Totals           7        306   313           4,203

Under this mine plan Diavik will cease mining operation in 2023. The 
reclamation costs are estimated at $188 million based on a DDMI closure cost 
model that is considered to be equal to or better than others used in the 
industry.  The majority of these closure costs are expected to be spent in 
2022 to 2025 although the full reclamation plan will only be completed in 2030.

Ekati Diamond Mine - Production

This updated plan is derived from the Company's estimates, based on the 
current reserve and resources as of December 31, 2012.  The reserve and 
resource information set out in this life-of-mine plan was prepared by or 
under the supervision of Mats Heimersson, P. Eng., an employee of the Company 
and a Qualified Person within the meaning of National Instrument 43-101. For 
more information see the Company's Technical Report regarding the Ekati 
Diamond Mine dated May 24, 2013, filed on SEDAR. Following this winter's 
drilling program the Company will be preparing an updated technical report on 
the mineral resources and mineral reserves at the Ekati Diamond Mine. The 
Company expects to file this technical report in the third quarter of calendar 
2014.

This current mine plan assumes production from Fox, Misery, Pigeon and Lynx 
open pits, and the Koala and Koala North underground operations.  Koala North 
is currently in production as a sub level retreat underground operation and is 
scheduled to finish later this year.  Koala is currently in production as a 
sublevel / inclined cave underground operation and is scheduled to finish in 
calendar 2019.  Fox is currently in operation as an open pit and is scheduled 
to finish in calendar 2014.  Stripping of waste material and satellite 
kimberlite is in progress at Misery open pit with expected full year 
production from the Misery Main Pipe in calendar 2016 and completion of mining 
in calendar 2018.  Stripping of waste material from Pigeon open pit is 
scheduled to commence in calendar 2014 with mining of kimberlite commencing in 
calendar 2015 and finishing in calendar 2019.

Table 5 shows the planned mining tonnage for each ore body. The data is given 
on a full financial year basis from Fiscal 2015, with Fiscal 2014 representing 
the period since the Company's acquisition of Ekati on April 10, 2013 to 
January 31, 2014. These figures do not include rough diamond stocks held at 
the mine at the opening of each year, nor does the model take into account any 
rough diamond inventory available for sale that the Company currently holds.

In addition to probable reserves, this plan includes the development and 
mining of the Lynx pipe that is currently an indicated resource.   Also as 
part of the mining of the Koala deposit a small portion of inferred resources 
is extracted along with the reserves: this material is not included in the 
mine plan estimates but will be processed along with the reserve ore.  Mineral 
resources that are not mineral reserves do not have demonstrated economic 
viability.

Table 5: Tonnage Mined - Ekati Diamond Mine (100% Basis)
                                                                      
                   Reserves (Tonnes                         Additional
                      Millions)                              Resources
                                      Koala                   (Tonnes
    Fiscal Year  Fox  Misery  Pigeon North   Koala   Total  Millions)
                                                             Lynx * 
         2014   3.50       -       -   0.33   0.40     4.23           
         2015   0.52       -       -     -     0.87    1.40          -
         2016     -     0.02    0.83     -     1.03    1.88          -
         2017     -     1.34    1.80     -     1.05    4.19       0.13
         2018     -     1.67    0.18     -     0.98    2.82       0.96
         2019     -        -    2.87     -     0.67    3.55          -
         2020     -        -    1.60     -     0.44    2.04          -  
        Total   4.02    3.03    7.29  0.33     5.44   20.11       1.09
    * Lynx is part of the Buffer Zone.  All other deposits are part of
    the Core Zone.
    Figures may not add up due to rounding.

Because of timing differences and blending choices the ore that is planned to 
be processed each fiscal year differs, sometimes significantly, from the ore 
mined in that fiscal year. Table 6 shows the planned ore to be processed by 
fiscal year and source and Table 7 the corresponding estimated carats produced.

Table 6: Ore Processed - Ekati Diamond Mine (100% Basis)
                                                                      
                     Reserves Processed (Tonnes Millions)   Additional
                                                            Resources
                                      Koala                   (Tonnes
    Fiscal Year  Fox  Misery  Pigeon North   Koala   Total  Millions)
                                                             Lynx * 
         2014   2.42       -       -   0.31    0.40    3.13          -
         2015   1.70       -       -     -     0.87    2.58          -
         2016     -     0.02    0.41     -     1.03    1.46          -
         2017     -     0.75    1.30     -     1.05    3.09       0.02
         2018     -     0.87    0.99     -     0.98    2.84       0.87
         2019     -     1.07    2.30     -     0.67    4.04       0.20
         2020     -     0.33    2.28     -     0.44    3.05          -  
        Total   4.12    3.03    7.29  0.31     5.44   20.19       1.09
    * Lynx is part of the Buffer Zone.  All other deposits are part of
                                                        the Core Zone.
                               Figures may not add up due to rounding.

Table 7: Carats Produced - Ekati Diamond Mine (100% Basis)
                                                                      
                             Reserves (Carat Millions)      Additional
                                                             Resources
                                      Koala                   (Carat
    Fiscal Year  Fox  Misery  Pigeon North   Koala   Total  Millions)
                                                             Lynx * 
         2014   0.72       -       -   0.20    0.30    1.22          -
         2015   0.36       -       -     -     0.51    0.87          -
         2016      -    0.07    0.16     -     0.48    0.71          -
         2017      -    2.90    0.57     -     0.53    4.00       0.02
         2018      -    3.67    0.41     -     0.57    4.65       0.69
         2019      -    4.55    0.92     -     0.45    5.92       0.15
         2020      -    1.39    1.09     -     0.27    2.75          -  
        Total   1.08   12.58    3.15  0.20     3.11   20.12       0.85
    * Lynx is part of the Buffer Zone.  All other deposits are part of
                                                        the Core Zone.
                               Figures may not add up due to rounding.

The Ekati processing plant has the capacity to process up to approximately 
4.35 million tonnes a year. In addition to the tonnages presented in Table 6, 
Ekati currently plans to process all remaining available Koala North mined 
kimberlite in fiscal 2015, the majority of which is 150,000 tonnes of inferred 
resources.  More significantly, Ekati currently plans to process the Misery 
South and Southwest Extension kimberlite that is made available as the Misery 
reserves are accessed.  Additionally, coarse ore rejects (not currently 
classified as resources) will be incrementally processed.

Table 8 shows the Misery satellite pipe material that is scheduled to be 
excavated during the pre-stripping operations for Misery Main Pipe. Estimates 
of tonnage and grade for the Misery satellite pipes have been made based on 
bulk samples collected during exploration programs, and confirmed by more 
recent production tests. The total tonnage range of this material is estimated 
to be between 2.7 million tonnes and 4.5 million tonnes, and the satellite 
pipes grade is estimated to range from 1.0 carats per tonne to 1.7 carats per 
tonne. In fiscal 2014, approximately 340,000 carats were produced from 
processing 291,000 tonnes of Misery Satellite material.  The diamonds that 
have been recovered to date display similar characteristics to diamonds from 
the Misery Main pipe. Dominion cautions that the potential quantity and grade 
remains conceptual in nature as there has been insufficient exploration and/or 
study to define this material as a Mineral Resources and it is uncertain if 
additional exploration will result in the exploration target being delineated 
as a mineral resource. Additional drilling is being planned for mid- 2014 with 
the objective of gathering sufficient data to promote this material to a 
mineral resource.

Table 8: Misery Satellite Material to be Excavated - Ekati Diamond Mine (100% 
Basis)
                                                            
           Misery Satellite Material Mined (Tonnes Millions)
    Fiscal  Misery SW  Misery  South                  Total 
     Year  Extension 
     2014        0.04            0.20                   0.24
     2015        0.64            0.61                   1.25
     2016        0.95            0.36                   1.31
     2017        1.42            0.08                   1.50
     2018        0.29               -                   0.29
     2019           -               -                      -  
    Total        3.34            1.25                   4.58

Coarse ore rejects have been stockpiled at Ekati since the start of production 
in 1998 to present.  Several production periods have been identified during 
which high grade feed sources were blended through the process plant using 
larger aperture de-grit screens (1.6 mm slot) compared to the current 1.2 mm 
configuration. In addition, the re-crush circuit was not utilised during these 
periods. The coarse ore rejects from the production periods of interest are 
estimated at 3.5 milion tonnes to 4.5 million tonnes. Based on stone size 
distributions and recovered grade data, this material has an overall grade 
ranging from 0.2 to 0.6 carats per tonne.  While the historic recoveries and 
valuations may not necessarily be indicative of recoveries or valuations 
within the current coarse ore rejects stockpiles, treatment of this material 
represents an attractive opportunity to supplement mill feed.  A number of 
production test runs were successfully completed last year and a full 
assessment of the results will be finalised later this year. Dominion cautions 
that the potential quantity and grade remains conceptual in nature as there 
has been insufficient exploration and/or study to define this material as a 
Mineral Resources and it is uncertain if additional exploration will result in 
the exploration target being delineated as a mineral resource.

Mineral resources that are not included in the current mine plan include Jay, 
Sable and Fox deep.  Jay is considered the most significant prospect due its 
large size and high grade (36.2 million tonnes of Indicated Mineral Resources 
at an average grade of 2.2 carats per tonne, 1 mm slot screen cut-off) and 
represents upside potential for the operation. An extensive drilling program 
is being conducted over the winter period in support of a pre-feasibility 
study for Jay.   The program has also targeted the Cardinal pipe which is 
located approximately 5 km southeast of the Jay pipe.

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

Ekati - Capital and Operating Costs

The capital and operating costs for this latest plan are based on the 
Company's estimates.  The costs shown include estimated contingencies where 
applicable, but do not include any escalation or risk contingency amounts for 
unforeseen events. In addition to ongoing equipment replacements and general 
operational upgrades, sustaining capital will include certain categories of 
ongoing underground excavation to maintain mining advances to increasing 
depths.

Table 9 shows currently estimated sustaining and mine development capital, 
along with operating costs from Fiscal 2014 onward.  These capital costs 
include costs associated with the development of the Misery and Pigeon pipes.  
The total current estimated capital cost of developing the Misery pipe is $405 
million, consisting largely of mining costs to achieve ore release, and of 
which $201 million will be spent by end of January 2014.  The current 
estimated cost for developing the Pigeon project is $85 million, and the Lynx 
project $30 million: both of these estimates include the construction of 
access roads, and pre-stripping of waste material to prepare the pit for 
production and contingency.

The estimated operating costs in Table 9 assumes that Ekati is running at full 
capacity and is based on the Company's operating experience, adjusted to 
present-day dollar terms.  Given the remote location of the Ekati Diamond 
Mine, a large portion of the operating expenditure is fixed, with the major 
cost items being labour and fuel (for both power and equipment). Not shown in 
Table 9 are marketing costs and private royalties as these factors are 
discussed separately at the end of this document.

Under this mine plan, Ekati will cease mining operation in Fiscal 2020. The 
reclamation costs are estimated at $347 million based on Ekati's closure cost 
model that includes all activities required by the approved Interim Closure 
and Reclamation Plan.  If the Jay and Cardinal deposits are permitted and 
developed, the reclamation costs under the current Mine Plan will be reduced 
further.

Table 9: Operating and Capital Costs - Ekati Diamond Mine (100% Basis)
                                                        
                       CAPITAL COSTS     OPERATING COSTS
     Fiscal
      Year                                  Direct and
             Developing Sustaining Total      Indirect
                  C$m        C$m    C$m           C$m
       2014          90         42   132             317
       2015         163         41   204             369
       2016         124         42   166             361
       2017          29         32    61             453
       2018           -         16    16             442
       2019           -         -     -              384
       2020           -         -     -              379  
     Totals         406        173   579           2,705

Additional Economic Factors

The Company sorts its rough diamonds from Ekati and Diavik in Yellowknife, 
Canada and Toronto, Canada and Mumbai, India and then distributes the 
resulting aggregated 'boxes' to its Belgian and Indian subsidiaries for sale. 
The Company's current budget for marketing 100% of the Ekati goods and 40% of 
the Diavik goods is approximately $20 million per annum.

Based on the Company's rough diamond sales during the fourth calendar quarter 
of 2013 and the current diamond recovery profile of the Diavik and Ekati 
processing plant, the Company has modeled the current approximate rough 
diamond price per carat for each of the deposits listed in Table 10 below.

Table 10: Modelled diamond prices by deposit
                                              
           Deposit             Average Price per
                                   Carat $US
    Diavik                                    
           A-154 South                  $140  
           A-154 North                  $180  
           A-418                        $100  
           Coarse Ore Rejects            $50  
           Small Diamond Project         $50  
    Ekati                                     
           Koala                        $375  
           Koala North                  $420  
           Fox                          $305  
           Pigeon                       $195  
           Lynx                         $225  
           Misery Main                  $105  
           Misery South & South West $90-110  
           Coarse Ore Rejects        $65-120  

The Company is currently budgeting on the basis of a US$/C$ exchange rate of 
1.045, and in its own financial models assumes a real diamond price growth 
rate of 2% per annum.

Both the Ekati Diamond Mine and the Diavik Diamond Mine pay royalties to the 
Federal Government.  For each mine the Federal Government royalty payable is 
equal to the lesser of 13% of the value of the 'Output' of the mine or an 
amount calculated based on a sliding scale of royalty rates dependent upon the 
value of 'Output' of the mine, ranging from 5% for value of output between 
$10,000 and $5 million to 14% for value of output over $45 million.

In addition the Company pays three private royalties to third parties.  At 
Ekati, a royalty is payable on kimberlite production from the Misery pipes 
such that C$18.76 per tonne mined and processed is payable on the first 
428,390 tonnes, and C$23.42 per tonne mined and processed is payable on the 
next 544,000 tonnes.  At Diavik, there are two private royalties each paying 
1% of the value of sales revenue.



SOURCE  Dominion Diamond Corporation 
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 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/03/c5923.html 
CO: Dominion Diamond Corporation
ST: Ontario
NI: MNG FIELD  
-0- Feb/03/2014 22:00 GMT
 
 
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