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

PR Newswire

TORONTO, Feb. 3, 2014

TORONTO, Feb. 3,  2014 /PRNewswire/ -  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)

                                 
Calendar        CAPITAL COSTS        OPERATING COSTS
  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 Millions)                          Additional
                                                                   Resources
 Fiscal                                 Koala                    (Tonnes
  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
  Fiscal                               Koala                     (Tonnes
   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
 Fiscal    Fox  Misery  Pigeon  Koala  Koala Total (Carat Millions)
  Year                              North                       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)

                                               
 Fiscal         CAPITAL COSTS        OPERATING COSTS
  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

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
 
Press spacebar to pause and continue. Press esc to stop.