Dominion Diamond Corporation Reports Fiscal 2014 Fourth Quarter and Year-End Results

 Dominion Diamond Corporation Reports Fiscal 2014 Fourth Quarter and Year-End
                                   Results

PR Newswire

TORONTO, April 2, 2014

TORONTO, April 2, 2014 /PRNewswire/ - Dominion Diamond Corporation (TSX:  DDC, 
NYSE: DDC) (the "Company") today announced its Fiscal 2014 Fourth Quarter  and 
Year-End results for the period ended January 31, 2014.

Robert Gannicott,  Chairman and  Chief Executive  Officer stated:  "Our  early 
experience at Ekati  continues to  exceed our expectations  while Diavik  also 
outperforms its  planned targets.  The diamond  market has  improved, both  in 
pricing and volume of  demand, as the  important diamond consuming  economies, 
led by the US, maintain momentum."

Corporate

Fiscal 2014 was a year during which  the Company transitioned into one of  the 
world's largest pure play  diamond mining companies.  During this period,  the 
Company completed the  sale of the  Harry Winston luxury  brand segment at  an 
enterprise value of $1  billion (including the assumption  of $250 million  of 
pro forma net  debt) and  the acquisition  of the  Ekati Diamond  Mine from  a 
global mining company  for whom  diamonds were non  longer a  core asset.  The 
Company paid a total of  $553 million, for its  interest in the Ekati  Diamond 
Mine, which  included $62  million  of cash,  $154  million of  rough  diamond 
inventory and  $165  million  of  supplies  (fuel,  cement  and  other  mining 
supplies).

The Diavik Diamond Mine, which  is one of the  highest grade diamond mines  in 
the world, continues to deliver excellent results.

The Company's senior management is completely focused on delivering value from
the Ekati Diamond Mine, and the benefits of having the senior management team
on hand in Yellowknife are already being demonstrated. Grade recovered is
ahead of plan, and cash cost of production for the period from April 10, 2013,
to January 31, 2014, which were originally forecast at $320 million, came in
at $303 million.

At the beginning of calendar year 2016, the capital spending on the pushback
at the Misery Main Pipe will be completed and this pipe will come into
production; at over 4 carats per tonne at an average price of approximately
$105 per carat, Misery Main is one of the richest kimberlite ore bodies in the
world.

During this fiscal year the Company has expensed $10.1 million on the Jay
Project which involves the development of the largest diamondiferous resource
in North America. It has the potential to extend the operating life of the
Ekati Diamond Mine in the order of 10 to 20 years beyond the currently
scheduled closure in 2019. The development and mining of this kimberlite is
the cornerstone of the Company's strategy for building a long-term,
sustainable Canadian diamond business.

We are pleased to welcome Fiona Perrot-Humphrey to our board of directors.  Dr 
Perrot-Humphrey has a long  history as a mining  equity analyst in both  South 
Africa and then London. She is  currently a senior advisor to N.M.  Rothschild 
in London.

Diamond Market

The first three months of  calendar 2014 has seen  an upturn in rough  diamond 
prices of just over 7%. This growth  is primarily the result of restocking  in 
the US,  the world's  largest  market for  diamond jewelry,  following  strong 
demand in the  important US  holiday season and  strong demand  in China,  the 
world's second largest consumer of diamond  jewelry, in the period running  up 
to Chinese New Year. Evidence suggests that jewelry sales are also  increasing 
in India, another major consumer of diamond jewelry where sales had been  weak 
in the past two years.

Fourth Quarter Summary

  *For the fourth quarter, Ekati recorded sales of $114.0 million, and
    incurred cash costs of production of $101.3 million. Total cost of sales
    for Ekati for the fourth quarter were $114.3 million.

  *For the fourth quarter, Diavik recorded sales of $119.2 million, and
    incurred cash costs of production of $43.3 million. Total cost of sales
    for Diavik for the fourth quarter were $87.7 million.

  *As at January 31 2014, the Company held cash and cash equivalents of
    $224.8 million and restricted cash of $113.6 million.

  *Consolidated rough diamond sales from the Company's ownership in the
    Diavik and Ekati Diamond Mines for the fourth quarter were $233.2 million
    compared to $110.1 million for the comparable quarter of the prior year.
    This resulted in an operating profit from continuing operations of $21.0
    million, consistent with the comparable quarter of the prior year.
    Consolidated EBITDA from continuing operations was $76.2 million compared
    to $45.3 million in the comparable quarter of the prior year.

       *Sales from the Diavik Diamond Mine were $119.2 million generating
         EBITDA of $59.3 million and EBITDA margins of approximately 50% for
         the fourth quarter.

       *Sales from the Ekati Diamond Mine were $114.0 million generating
         EBITDA of $24.4 million and EBITDA margins of approximately 21% for
         the fourth quarter. However, this excludes the sale of an estimated
         0.2 million carats of production from the processing of satellite
         material from the Misery South and Southwest pipes, which material
         was excavated during the pre-stripping operations of the Misery Main
         pipe, for estimated proceeds of $10.8 million. During pre-production,
         sales of diamonds recovered from the Misery South and Southwest
         material have been applied as a reduction of mining assets. The
         Company estimates that the EBITDA margin would have been
         approximately 26% if the Misery South and Southwest pipes had been in
         commercial production during the quarter, therefore allowing the
         sales of carats from such material to be recognized as revenue.

  *Included in the exploration costs of $3.3 million for the quarter was $3.1
    million of exploration work on the Jay pipe in the Buffer Zone at the
    Ekati Diamond Mine.

  *The Company recorded a net foreign exchange loss of $7.9 million during
    the fourth quarter related to the weakening in the Canadian dollar versus
    the US dollar. This compared to a gain of $0.1 million in the comparable
    quarter of the previous year.

  *The Company recorded a net income tax expense of $19.0 million during the
    fourth quarter which includes $13.5 million of tax expense related to the
    significant weakening of the Canadian dollar versus the US dollar during
    the fourth quarter, substantially all of which was non-cash tax expense.
    This is compared to a net income tax expense of $7.0 million in the
    comparable quarter of the previous year with a much less significant
    impact of foreign exchange.

  *The Company recorded a consolidated net loss from continuing operations of
    $7.8 million or $(0.09) per share for the quarter compared to a net profit
    from continuing operations of $12.1 million or $0.14 per share in the
    comparable quarter in the previous year.

  *At the end of the quarter, the Company held rough diamond inventory with
    an approximate market value of $205 million, of which $40 million of rough
    diamond inventory had been held as strategic stock from sale as at January
    31.

  *Detailed life of mine plans for both the Ekati Diamond Mine and the Diavik
    Diamond Mine based on reserves only were published on February 3, 2014.

Annual Results Summary

  *For the period from April 10, 2013 to January 31, 2014, Ekati recorded
    sales of $399.6 million and incurred cash costs of production of $303.9
    million. Total cost of sales for Ekati for the period were $392.9
    million.

  *For the fiscal year, Diavik recorded sales of $352.3 million and incurred
    cash costs of production of $162.6 million. Total cost of sales for Diavik
    for the fiscal year were $257.9 million.

  *Consolidated sales from continuing operations totaled $751.9 million for
    the year ended January 31, 2014, compared to $345.4 million compared to
    the prior year resulting in an operating profit of $51.6 million compared
    to an operating profit of $47.7 million in the prior year.

       *Sales from the Diavik Diamond Mine were $352.3 million generating an
         EBITDA margin of approximately 49% for the year.

       *Sales from the Ekati Diamond Mine were $399.6 million generating
         EBITDA of $59.6 million and EBITDA margin of approximately 15% for
         the period from April 10, 2013 to January 31, 2014. However, this
         excludes the sale of an estimated 0.2 million carats of production
         from the processing of satellite material from the Misery South and
         Southwest pipes excavated during the pre-stripping operations of the
         Misery Main pipe for estimated proceeds of $14.3  million. EBITDA was
         also impacted by the sale of inventory that was recorded at market
         value as a result of the acquisition of the Ekati Diamond Mine. The
         Company estimates that the EBITDA margin would have been
         approximately 27% if the effect of the market value adjustment to
         inventory made as part of the acquisition of the Ekati Diamond Mine
         was excluded and the carats sold from material excavated from the
         Misery South & Southwest pipes were recognized as revenue.

  *Gross margin increased 30% to $101.1 million from $77.8 million in the
    prior year. Consolidated EBITDA from operations was $191.7 million
    compared to $127.9 million in the prior year.

  *Exploration expense of $14.6 million was incurred during the year which
    compares to $1.8 million in the prior year. Included in the exploration
    costs for fiscal 2014 are $10.1 million of exploration work on the Jay
    pipe in the Buffer Zone at the Ekati Diamond Mine and $4.5 million of
    exploration work on the Company's claims in the Northwest Territories.

  *The Company recorded a foreign exchange loss of $8.9 million during the
    year related to the weakening in the Canadian dollar versus the US dollar.
    This is compared to a gain of $0.5 million in the prior year.

  *The Company recorded a net income tax expense of $35.5 million during the
    year which includes $20.7 million of tax expense related to the
    significant weakening of the Canadian dollar versus the US dollar during
    the period, substantially all of which was non-cash tax expense. This is
    compared to a net income tax expense of $15.3 million in the prior year
    with a much less significant impact of foreign exchange.
  *Included in the fiscal 2014 financial results are $3.2 million (after tax)
    of restructuring costs at the Antwerp, Belgium, office as a result of the
    integration of Dominion Diamond and Ekati's sales teams, $11.4 million
    (after tax) of Ekati acquisition costs 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.

  *The Company recorded a consolidated net loss from continuing operations
    attributable to shareholders of $23.0 million or $(0.27) per share.

  *The Company's estimated consolidated net profit attributable to
    shareholders for the year would have been $15.2 million or $0.18 per share
    excluding the following:

       *the restructuring costs at the Antwerp, Belgium office;
       *the expenses related to the cancellation of the credit facilities
         related to the Ekati Acquisition;
       *Ekati Acquisition transaction costs; and
       *the impact of the sale of opening acquisition inventory that was
         included at market value in Ekati cost of sales.

Diavik Diamond Mine

  *The fourth calendar quarter at the Diavik Diamond Mine saw continued
    strong performance, producing (on a 100% basis) 2.1 million carats from
    0.54 million tonnes of ore processed compared to production of 1.9 million
    carats from 0.47 million tonnes of ore processed in the comparable quarter
    of the prior year. This was a result of the improvements in the mining
    rates as the underground ramp-up progressed throughout the year to full
    production from all three pipes.

  *During the fourth quarter, the Company sold approximately 1.0 million
    carats from the Diavik Diamond Mine for a total of $119.2 million for an
    average price per carat of $114.

  *Had the Company sold only the last production shipped in the fourth
    quarter, the estimated achieved price would have been approximately $119
    per carat based on the prices achieved in the January 2014 sale.

  *During the year ended January 31, 2014, the Company sold approximately 3.0
    million carats from the Diavik Diamond Mine for a total of $352 million
    for an average price of $118 per carat, compared to 3.2 million carats for
    an average price per carat of $109 in the comparable period in the prior
    year.

  *At January 31, 2014, the Company had 0.4 million carats of Diavik Diamond
    Mine produced inventory with an estimated market value of approximately
    $65 million.

  *The Diavik management team continues to focus on maximizing production and
    lowering costs.

Ekati Diamond Mine

  *The Ekati Diamond Mine is performing well. A series of initiatives has
    been undertaken aimed at optimizing operations since the Company's senior
    management team took control. Mining at the open pit Fox pipe will be
    completed ahead of schedule. During the fourth fiscal quarter,
    approximately 917,500 tonnes of ore (on a 100% basis) was processed
    yielding approximately 481,000 carats.

  *During the fourth quarter, the Company sold approximately 0.4 million
    carats for a total of $114.0 million for an average price per carat of
    $276. Not included in this figure are sales of approximately $10.8 million
    from carats produced during the processing of satellite material from the
    Misery South and Southwest satellite pipes.

  *Had the Company sold only the last production shipped in the fourth
    quarter, the estimated achieved price would have been approximately $287
    based on the prices achieved in the January 2014 sale.

  *At January 31, 2014, the Company had 0.5 million carats of Ekati Diamond
    Mine produced inventory with an estimated market value of approximately
    $140 million.

  *During the period from April 10, 2013 to January 31, 2014, the Ekati
    Diamond Mine produced (on a 100% basis) 1.65 million carats from the
    processing of approximately 3.4 million tonnes, of which 2.3 million
    tonnes of ore was sourced from the Fox pipe, approximately 0.4 million
    tonnes was sourced from Koala Underground, and 0.28 million tonnes was
    sourced from Koala North. In addition, as at January 31, 2014, the Company
    had processed approximately 0.25 million tonnes of kimberlite material
    excavated from the Misery South and Southwest pipes, which achieved an
    overall grade of 1.4 carats per tonne, as well as 78,000 tonnes of Coarse
    Ore Rejects which achieved an average grade of 0.4 carats per tonne. These
    diamond recoveries are not included in the Company's reserves and
    resources statement and are therefore considered incremental to production

Jay Pipe Development

The Company's work on the Jay  Project is proceeding on schedule. The  winter 
2014 drilling program is well underway at the Jay pipe and along the  proposed 
dike alignments associated with  the project. To date,  20 sonic drill  holes 
and 16  diamond drill  holes have  been completed  along four  potential  dike 
emplacements and  geotechnical drilling  is  underway at  the Jay  pipe.  The 
drilling program will extend into late April.

Permitting update

The scoping sessions  for the  Jay Project were  held in  January, 2014.  All 
parties were then  asked to  comment on  a draft  Terms of  Reference for  the 
project and the Mackenzie Valley Review Board (Board) published a final  Terms 
of Reference and interim draft work  plan for the environmental assessment  of 
the Jay pipe on  February 21, 2014.  The Company is now  working to submit  a 
Developer's Assessment Report  to the Board  in Q3 2014.  The analytical  and 
hearing phases of the Environmental Review are estimated to take 10-12 months.
The Board will  then make  a recommendation to  the Minister  with a  decision 
expected in Q3 2015.

Lynx Project

The permitting for the  Lynx pipe expansion is  entering its final phase.  The 
Company anticipates  having  all  permits  in hand  well  before  the  planned 
development of the project in 2015. Ore production is scheduled for 2016.

Administration of Land, Water and Resources in the Northwest Territories

The  Government   of   Canada   will  be   transferring   responsibility   for 
managingpublic land,water and resources in the Northwest Territories to  the 
Government of the Northwest Territories (GNWT)  on April 1, 2014. The  Company 
is preparing for  this transfer  by working with  the GNWT  to strengthen  our 
working relationship  and  to  ensure  the schedule  for  the  Jay  review  is 
maintained.

Conference Call and Webcast
Beginning at  8:30AM (ET)  on Thursday,  April 3rd,  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 800-706-7741 within North America  or 
617-614-3471 from international locations and entering passcode 21447206.

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, April  17th, 
2014 by  dialing  888-286-8010  within  North  America  or  617-801-6888  from 
international locations and entering passcode 35806731.

About Dominion Diamond Corporation
Dominion  Diamond  Corporation  isa  Canadian  diamond  mining  company  with 
ownership interests  in twomajor  producing diamond  mines. Both  mines  are 
located in the low political risk environment of the Northwest Territories  in 
Canada. 

The Company operates the Ekati Diamond Mine through its 80 per cent  ownership 
as well as a  58.8% ownership in  the surrounding areas  containingadditional 
resources, and also  owns 40% of  the Diavik Diamond  Mine. It supplies  rough 
diamonds to the global  market through its sorting  and selling operations  in 
Canada, Belgium and India and is the world's fourth largest producer of  rough 
diamonds by value.

For more information, please visit www.ddcorp.ca

                                  Highlights

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

FOURTH QUARTER RESULTS
Dominion Diamond Corporation (the "Company") recorded a consolidated net  loss 
attributable to shareholders  of $7.8  million or  $(0.09) per  share for  the 
quarter, compared  to  a net  profit  attributable to  shareholders  of  $14.9 
million or $0.18 per share in the  fourth quarter of the prior year. Net  loss 
from continuing operations attributable to shareholders (which represents  the 
Diavik and  Ekati mining  segments)  was $7.8million  or $(0.09)  per  share, 
compared to a net profit from continuing operations of $12.1 million or  $0.14 
per share in the comparable  quarter of the prior  year. Included in net  loss 
from continuing operations was $7.9 million related to a foreign exchange loss
compared to a  $0.1 million  gain related to  foreign exchange  in the  fourth 
quarter of the prior year,  due to the weakening  of the Canadian dollar.  The 
net loss  from  continuing operations  for  the quarter  also  included  $13.5 
million of income tax expense related to the weakening of the Canadian dollar,
substantially all of which is non-cash  tax expense. This compares to a  $0.2 
million of  tax expense  related to  the  impact of  foreign exchange  in  the 
comparable quarter of the prior year.

Consolidated sales  from continuing  operations were  $233.2 million  for  the 
quarter, compared to $110.1  million for the comparable  quarter of the  prior 
year, resulting  in an  operating  profit of  $21.0  million, compared  to  an 
operating profit of $21.0 million in the comparable quarter of the prior year.
Consolidated EBITDA from continuing operations  was $76.2 million compared  to 
$45.3 million in the comparable quarter of the prior year.

During the fourth quarter, the Company recorded sales from the Diavik  Diamond 
Mine of $119.2 million compared to $110.1 million in the comparable quarter of
the prior year.  The Company sold  approximately 1.0 million  carats from  the 
Diavik Diamond Mine for an  average price per carat  of $114, compared to  0.8 
million carats  for an  average price  per  carat of  $133 in  the  comparable 
quarter of the prior year. The 27%  increase in volume of Diavik Diamond  Mine 
carats sold versus the comparable quarter of the prior year resulted primarily
from the sale during the  fourth quarter of inventory  held back from sale  in 
the prior quarter  due to a  weakening of the  rough diamond market  resulting 
from macroeconomic uncertainty  in India.  The 14% decrease  in the  Company's 
achieved average rough diamond prices for the Diavik Diamond Mine as  compared 
to the fourth quarter of  the prior year resulted  primarily from a change  in 
the sales  mix of  product sold,  partially offset  by an  increase in  market 
prices for rough diamonds  in the fourth quarter  compared to the prior  year. 
The Diavik segment generated gross margins and EBITDA margins as a  percentage 
of  sales  of  26.4%  and  50%,  respectively,  compared  to  28.2%  and  48%, 
respectively, in the  comparable quarter  of the  prior year.  At January  31, 
2014, the  Company had  0.4 million  carats of  Diavik Diamond  Mine  produced 
inventory with an estimated market value of approximately $65 million.

During the fourth  quarter, the Ekati  Diamond Mine recorded  sales of  $114.0 
million and sold  approximately 0.4 million  carats for an  average price  per 
carat of $276. Excluded from sales recorded in the fourth quarter were  carats 
produced and sold from  the processing of satellite  material from the  Misery 
South and Southwest kimberlite pipes as this material was excavated during the
pre-stripping operations of the Misery  South and Southwest kimberlite  pipes. 
The Ekati Diamond Mine  generated gross margins and  EBITDA margins of  (0.3)% 
and 21%, respectively.  The Company  estimates that gross  margins and  EBITDA 
margins would  have been  approximately 7.0%  and 26.0%,  respectively if  the 
carats sold  from  material  excavated  from  the  Misery  South  &  Southwest 
kimberlite pipes were recognized as  revenue. During pre-production, sales  of 
Misery South and Southwest carats have  been applied as a reduction of  mining 
assets. At  January 31,  2014, the  Company had  0.5 million  carats of  Ekati 
Diamond  Mine  produced   inventory  with   an  estimated   market  value   of 
approximately $140 million.

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 $7.9  million,  compared to  $8.2 million  in  the 
comparable quarter of the prior year.

ANNUAL RESULTS
During the year, the  Company completed the acquisition  of the Ekati  Diamond 
Mine and  the sale  of Harry  Winston, Inc.  (the "Luxury  Brand Segment")  to 
Swatch Group. The acquisition  of the Ekati Diamond  Mine (the "Ekati  Diamond 
Mine Acquisition") was completed on April 10,  2013. As a result of the  Ekati 
Diamond Mine Acquisition,  the Company acquired  an 80% interest  in the  Core 
Zone, which includes the current operating mine and other permitted kimberlite
pipes, as  well as  a 58.8%  interest in  the Buffer  Zone, an  adjacent  area 
hosting kimberlite pipes with both development and exploration potential.  The 
sale of the  Luxury Brand Segment  was completed on  March 26, 2013  and as  a 
result of the sale,  the Company's corporate group  underwent name changes  to 
remove  references  to  "Harry   Winston".  See  "Discontinued   Operations". 
Accordingly, the Company's consolidated results from continuing operations are
for the Diavik Diamond Mine and the  Ekati Diamond Mine (from April 10th,  the 
date of acquisition by the  Company). Continuing operations no longer  include 
the operations of the Luxury Brand Segment and the results of this segment are
now treated as discontinued operations for reporting purposes.

The Company recorded a consolidated net profit attributable to shareholders of
$479.7 million or $5.64 per share for the year, compared to a consolidated net
income attributable to shareholders of $34.7 million or $0.41 per share in the
prior year. Net loss from continuing operations attributable to  shareholders 
was $23.0 million or $(0.27) per share compared to net profit from  continuing 
operations attributable to shareholders of $22.3million or $0.26 per share in
the prior  year.  Included  in  the consolidated  net  loss  attributable  to 
shareholders for the year was $3.2million (after-tax) of restructuring  costs 
at the Antwerp, Belgium office, $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  and  $11.4  million 
(after-tax) of Ekati acquisition costs.  Excluding these 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 year  would have been  $15.2 million  or 
$0.18 per share.  The net loss  from continuing operations  for the year  also 
included $20.7 million of income tax  expense related to the weakening of  the 
Canadian dollar, substantially all  of which is  non-cash tax expense.  This 
compares to a $0.7  million of tax  expense related to  the impact of  foreign 
exchange in the prior year.  Continuing operations includes all costs  related 
to the Company's  mining operations,  including those  previously reported  as 
part of the corporate segment.

Consolidated sales from continuing operations were $751.9 million for the year
compared to  $345.4 million  for the  prior year,  resulting in  an  operating 
profit of $51.6 million  compared to an operating  profit of $47.7 million  in 
the prior  year. Gross  margin  increased 30%  to $101.1million  from  $77.8 
million in the  prior year.  Consolidated EBITDA from  operations was  $191.7 
million compared to $127.9 million in the prior year.

During the year, the  Company recorded sales from  the Diavik Diamond Mine  of 
$352.3 million compared to $345.4 million in the prior year. The Company sold
approximately 3.0 million carats from the  Diavik Diamond Mine for an  average 
price per carat of $118, compared to  3.2 million carats for an average  price 
per carat  of $109  in the  prior year.  The Diavik  segment generated  gross 
margins and  EBITDA  margins  as a  percentage  of  sales of  26.8%  and  49%, 
respectively, compared to 22.5% and 44% in prior year.

During the year,  the Company recorded  sales from the  Ekati Diamond Mine  of 
$399.6 million and sold approximately 1.3 million carats for an average  price 
per carat of  $301. Excluded from  sales recorded in  the fourth quarter  were 
carats produced and sold  from the processing of  satellite material from  the 
Misery South  and  Southwest kimberlite  pipes,  this material  was  excavated 
during  the  pre-stripping  operations  of  the  Misery  South  and  Southwest 
kimberlite pipes. The Ekati segment generated gross margins and EBITDA margins
as a percentage of sales of 1.7% and 15%, respectively. The Company  estimates 
that gross margins and EBITDA margins  would have been approximately 8.2%  and 
27%, respectively if the  effect of the market  value adjustment to  inventory 
made as part of the Ekati Diamond Mine Acquisition was excluded and the carats
sold from  material excavated  from the  Misery South  & Southwest  kimberlite 
pipes were recognized as revenue.

The net  earnings  during the  year  from discontinued  operations  of  $502.7 
million are presented  separately in the  consolidated income statements,  and 
comparative periods have been adjusted accordingly.

                     Management's Discussion and Analysis

    (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 year ended January  31, 
2014, andits financial position as at January 31, 2014. This MD&A is based on
the Company's unaudited  consolidated financial  statements. Unless  otherwise 
specified, all financial  information is presented  in United States  dollars. 
Unless otherwise indicated, all references to "year" refer to the fiscal  year 
ended January 31, 2014.

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",  "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 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, estimated  production from  the Ekati  Diamond mine  and 
Diavik  Diamond  Mine,  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  Ekati Diamond Mine and the Diavik  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  and macroeconomic  uncertainty in  other financial  markets, 
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 mineral properties are located at Lac de Gras in Canada's Northwest
Territories.

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 consists of the Core Zone  (in 
which the Company has an 80%  interest), which includes the current  operating 
mine and other  permitted kimberlite  pipes, as well  as the  Buffer Zone  (in 
which the Company has a 58.8%  interest), an adjacent area hosting  kimberlite 
pipes having both development and exploration  potential, such as the Jay  and 
Cardinal kimberlite pipes and the  Lynx kimberlite pipe. The Company  controls 
and  consolidates  the  Ekati  Diamond  Mine  and  minority  shareholders  are 
presented  as  non-controlling   interests  in   the  consolidated   financial 
statements.

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 (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. Both
DDMI and DDDLP  are headquartered  in Yellowknife,  Canada. DDMI  is a  wholly 
owned subsidiary of Rio Tinto plc of London, England. The Company receives 40%
of the diamond production from the Diavik Diamond Mine.

MARKET COMMENTARY
After an exuberant start to fiscal 2014 the rough diamond market slowed in the
second quarter as both tight liquidity  and problems with a fluctuating  rupee 
in India dampened market sentiment amongst diamond manufacturers. The  diamond 
market was also impacted by a decrease in retail activity in China, which  had 
propelled the  diamond market  in  fiscal 2013,  as political  reforms  slowed 
luxury spending.

The market regained its composure in the fourth quarter of fiscal 2014 as more
positive demand was evident in the lead up to the traditionally busy  year-end 
holiday season in  the US  and the  Lunar New Year  in China.  It soon  became 
evident that the world's  largest jewelry market, the  USA, was in a  positive 
mood and also the lead up to the Chinese New Year was increasingly robust. The
mood in the Indian  retail market improved  as the rupee  steadied but it  was 
still a frustrating  season there as  local economic woes,  and a  substantial 
increase in the duty on gold, dampened any enthusiasm for jewelry.

The  tightening  of  liquidity  by  the  banks  caused  many  (mainly   India) 
manufacturers to  take  a  more  pragmatic  approach  to  their  business;  in 
particular with respect to their stock  levels and the length of their  supply 
chain and its impact on cash flow. Whilst this was a painful exercise, it  put 
the business in a far  better shape to capitalize on  the sound market at  the 
year's  end.  This  assurance  has  allowed  manufacturers  to  restock   with 
confidence driving a positive start to fiscal 2015.

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  January 31,  2014. As  a result  of  retrospective 
adjustments made reflecting the final  purchase price allocation of the  Ekati 
Diamond Mine  and  adjustments for  Misery  South &  Southwest  pre-production 
revenue, the prior quarters have been recast.

(expressed in thousands of United States dollars except per share amounts and where otherwise noted)
(unaudited)
                     2014     2014      2014     2014     2013     2013     2013     2013      2014     2013      2012
                       Q4       Q3        Q2       Q1       Q4       Q3       Q2       Q1     Total    Total     Total
Sales            $  233,163 $ 148,138 $  261,803 $ 108,837 $ 110,111 $  84,818 $  61,473 $  89,009 $  751,942 $ 345,411 $  290,114
Cost of sales      202,030  136,221   231,086   81,535   79,038   71,663   46,784   70,099   650,872  267,584   227,951
Gross margin        31,133   11,917    30,717   27,302   31,073   13,155   14,689   18,910   101,070   77,827    62,163
Gross margin    
(%)                   13.4%     8.0%     11.7%    25.1%    28.2%    15.5%    23.9%    21.2%     13.4%    22.5%     21.4%
Selling,        
general and
administrative
expenses             10,117    7,408    15,056   16,843   10,086    7,581    5,750    6,739    49,425   30,156    24,589
Operating       
profit (loss)
from continuing
operations           21,016    4,509    15,661   10,459   20,987    5,574    8,939   12,171    51,645   47,671    37,574
Finance         
expenses            (3,553)  (3,136)  (17,921)  (2,742)  (2,382)  (2,308)  (2,151)  (2,242)  (27,351)  (9,083)  (10,787)
Exploration     
costs               (3,290)  (7,074)   (3,145)  (1,039)    (306)    (673)    (568)    (254)  (14,550)  (1,801)   (1,770)
Finance and     
other income            491      825     1,032      804      601       60       67       52     3,153      780       462
Foreign         
exchange gain
(loss)              (7,917)    1,122   (2,814)      732      116    (301)    1,048    (370)   (8,879)      493       834
Profit (loss)   
before income
taxes from
continuing
operations            6,747  (3,754)   (7,187)    8,214   19,016    2,352    7,335    9,357     4,018   38,060    26,313
Income tax      
expense
(recovery)           19,018    2,792     8,655    5,042    6,977    1,583    3,386    3,330    35,505   15,276     9,007
Net profit      
(loss) from
continuing
operations        $ (12,271) $ (6,546) $ (15,842) $   3,172 $  12,039 $     769 $   3,949 $   6,027 $ (31,487) $  22,784 $   17,306
Net profit      
(loss) from
discontinued
operations                -        -         -  502,656    2,802    3,245      804    5,583   502,656   12,434     8,137
Net profit      
(loss)            $ (12,271) $ (6,546) $ (15,842) $ 505,828 $  14,841 $   4,014 $   4,753 $  11,610 $  471,169 $  35,218 $   25,443
Net profit      
(loss) from
continuing
operations
attributable to                                                                                              
Shareholders     $  (7,802) $ (4,794) $ (13,884) $   3,504 $  12,146 $     152 $   3,951 $   6,027 $ (22,974) $  22,276 $   17,317
Non-controlling 
interest            (4,469)  (1,752)   (1,958)    (332)    (107)      617      (2)        -   (8,513)      508      (11)
Net profit      
(loss)
attributable to                                                                                              
Shareholders     $  (7,802) $ (4,794) $ (13,884) $ 506,160 $  14,948 $   3,397 $   4,755 $  11,610 $  479,682 $  34,710 $   25,454
Non-controlling 
interest            (4,469)  (1,752)   (1,958)    (332)    (107)      617      (2)        -   (8,513)      508      (11)
Earnings (loss) 
per share -
continuing
operations                                                                                                   
 Basic        $   (0.09) $  (0.06) $   (0.16) $    0.04 $    0.14 $    0.00 $    0.05 $    0.07 $   (0.27) $    0.26 $     0.20
 Diluted      $   (0.09) $  (0.06) $   (0.16) $    0.04 $    0.14 $    0.00 $    0.05 $    0.07 $   (0.27) $    0.26 $     0.20
Earnings (loss) 
per share                                                                                                    
 Basic        $   (0.09) $  (0.06) $   (0.16) $    5.96 $    0.18 $    0.04 $    0.06 $    0.14 $     5.64 $    0.41 $     0.30
 Diluted      $   (0.09) $  (0.06) $   (0.16) $    5.89 $    0.18 $    0.04 $    0.06 $    0.14 $     5.59 $    0.41 $     0.30
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 $     0.00
Total assets    
^(i)              $    2,305 $   2,305 $    2,299 $   2,412 $   1,710 $   1,733 $   1,660 $   1,716 $    2,305 $   1,710 $    1,607
Total long-term 
liabilities
^(i)              $      691 $     688 $      694 $     695 $     269 $     682 $     461 $     472 $      691 $     269 $      641
Operating       
profit (loss)
from continuing
operations        $   21,016 $   4,509 $   15,661 $  10,459 $  20,987 $   5,574 $   8,939 $  12,171 $   51,645 $  47,671 $   37,574
Depreciation    
and
amortization
^(ii)                55,228   31,978    32,644   20,211   24,346   20,588   13,160   22,172   140,061   80,266    78,761
EBITDA from     
continuing
operations
^(iii)            $   76,244 $  36,487 $   48,305 $  30,670 $  45,333 $  26,162 $  22,099 $  34,343 $  191,706 $ 127,937 $  116,335

(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 January 31, 2014, ComparedtoThree Months Ended January
31, 2013

CONSOLIDATED NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
The Company recorded a fourth quarter consolidated net loss attributable to
shareholders of $7.8 million or $(0.09) per share, compared to a net profit
attributable to shareholders of $14.9 million or $0.18 per share in the fourth
quarter of the prior year. Net loss from continuing operations attributable to
shareholders was $7.8 million or $(0.09) per share, compared to a net profit
from continuing operations of $12.1million or $0.14 per share in the
comparable quarter of the prior year. Included in net loss from continuing
operations was a $7.9 million related to foreign exchange loss compared to a
$0.1 million gain related to foreign exchange in the fourth quarter of the
prior year, due to the weakening of the Canadian dollar. The net loss from
continuing operations for the quarter also included $13.5 million of income
tax expense related to the weakening of the Canadian dollar, substantially all
of which is non-cash tax expense. This compares to a $0.2 million of tax
expense related to the impact of foreign exchange in the comparable quarter of
the prior year.

Discontinued operations  represented  $nil  of net  profit  compared  to  $2.8 
million or $0.04 share in the fourth quarter of the prior year.

CONSOLIDATED SALES
Consolidated sales for the fourth quarter totalled $233.2 million, consisting
of Diavik rough diamond sales of $119.2 million and Ekatirough diamond sales
of $114.0million. This compares to sales of $110.1 million in the comparable
quarter of theprior year (Diavik rough diamond sales of $110.1million 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 9 for additional information.

CONSOLIDATED COST OF SALES AND GROSS MARGIN
The Company's fourth quarter cost of sales was $202.0 million resulting in a
gross margin of 13.4%, compared toa cost of sales of $79.0million and a
gross margin of 28.2% 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 9 for additional
information.

CONSOLIDATED INCOME TAXES
The Company recorded a net income tax expense of $19.0 million during the
fourth quarter, compared to a net income tax expense of $7.0million 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 fourth  quarter, the Canadian  dollar 
significantly weakened  against  the  US  dollar. As  a  result,  the  Company 
recorded  an  unrealized  foreign  exchange  gain  of  $14.6  million  on  the 
revaluation of the Company's Canadian  dollar denominated deferred income  tax 
liability. This  compares  to an  unrealized  foreign exchange  loss  of  $0.3 
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 
fourth quarter, the Company also recognized  a deferred income tax expense  of 
$23.5 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 $0.9  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 $1.3 million  relating to foreign exchange differences  between 
income in the currency of the country of origin and US dollars. This  compares 
to net income tax recovery of $1.1 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 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 $10.1 million for
the fourth quarter, consistent with the comparable quarter of the prior year.
See"Segmented Analysis" on page 9 for additional information.

CONSOLIDATED FINANCE EXPENSES FROM CONTINUING OPERATIONS
Finance expense for the fourth quarter was $3.6 million, compared to finance
expense of $2.4 million for the comparable quarter of the prior year. The
increase was due primarily to accretion expense associated with the future
site restoration liability at the Ekati Diamond Mine, which was not present in
the comparable quarter of the prior year. Accretion expense was $2.8 million
(three months ended January 31, 2013 - $0.6million) 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 $3.3 million was incurred during the fourth quarter,
compared to $0.3 million in the comparable quarter of the prior year. Included
in exploration expense for the fourth quarter is $3.1 million of exploration
work on the Jay pipe within the Buffer Zone at the Ekati Diamond Mine and $0.2
million of exploration work on the Company's claims in the Northwest
Territories.

CONSOLIDATED FINANCE AND OTHER INCOME FROM CONTINUING OPERATIONS
Finance and other income of $0.5 million was recorded during the fourth
quarter, compared to $0.6 million in the comparable quarter of the prior year.

CONSOLIDATED FOREIGN EXCHANGE FROM CONTINUING OPERATIONS
A net foreign exchange loss of $7.9 million was recognized during the fourth
quarter, compared to a net foreign exchange gain of $0.1 million in the
comparable quarter of the prior year, due to the weakening of the Canadian
dollar. TheCompany does not currently have any significant foreign exchange
derivative instruments outstanding.

Year Ended January 31, 2014, ComparedtoYear Ended January 31, 2013

CONSOLIDATED NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
The Company recorded a consolidated net profit attributable to shareholders of
$479.7 million or $5.64 per share for the year ended January 31, 2014,
compared to a net profit attributable to shareholders of $34.7 million or
$0.41 per share in the prior year. Included in this amount is a $502.9 million
gain on the sale of the Luxury Brand Segment on March 26, 2013. Net loss from
continuing operations attributable to shareholders was $23.0 million or
$(0.27) per share, compared to a net profit from continuing operations
attributable to shareholders of $22.3million or $0.26 per share in the prior
year. Included in the consolidated net loss attributable to shareholders for
the year was $3.2 million (after-tax) of restructuring costs at the Antwerp,
Belgium office, $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 and $11.4 million
(after-tax) of Ekati acquisition costs. Excluding these 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 year would have been $15.2 million or
$0.18 per share. Discontinued operations represented $502.6million of net
profit or $5.91 per share, compared to $12.4 million or $0.15 per share in
prior year.

CONSOLIDATED SALES
Consolidated sales totalled $751.9 million for the year ended January 31,
2014, consisting of Diavik rough diamond sales of $352.3 million and
Ekatirough diamond sales of $399.6 million. This compares to sales of $345.4
million in the prior year (Diavik rough diamond sales of $345.4million 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 January 31, 2014.

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 period, 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 9 for additional information.

CONSOLIDATED COST OF SALES AND GROSS MARGIN
The Company's cost of sales was $650.9 million for the year ended January 31,
2014, resulting in a gross margin of 13.4%, compared toa cost of sales of
$267.6 million and a gross margin of 22.5% for the prior year. The Company's
cost of sales includes costs associated with mining and rough diamond sorting
activities. See "Segmented Analysis" on page9 for additional information.

CONSOLIDATED INCOME TAXES
The Company recorded a net income tax expense of $35.5 million during the year
ended January 31, 2014, compared to a net income tax expense of $15.3 million
in the prior year. The Company's combined federal and provincial statutory
income tax rate for the year ended January 31, 2014 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 year  ended January  31, 2014,  the 
Canadian dollar  significantly weakened  against the  US dollar.  The  Company 
recorded  an  unrealized  foreign  exchange  gain  of  $24.1  million  on  the 
revaluation of the Company's Canadian  dollar denominated deferred income  tax 
liability during  the  year  ended  January 31,  2014.  This  compares  to  an 
unrealized foreign exchange loss of $1.1  million recorded in 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  year ended January  31, 2014, the  Company recognized  a 
deferred income tax expense of $40.4 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  $4.4 million recognized in  the 
prior year. The recorded tax provision during the year ended January 31,  2014 
included a net income tax expense of $0.7 million relating to foreign exchange
differences between income in the currency of the country of origin and the US
dollar. This compares to a net income tax recovery of $5.2 million  recognized 
in 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 $49.4 million during the year ended
January 31, 2014, compared to $30.2 million in the prior year. The increase
from the prior year was primarily due to $11.2 million of transaction costs
and $4.9 million of restructuring costs at the Antwerp, Belgium office,
related in each case to the Ekati Diamond Mine Acquisition. See"Segmented
Analysis" on page 9 for additional information.

CONSOLIDATED FINANCE EXPENSES FROM CONTINUING OPERATIONS
Finance expenses were $27.4 million for the year ended January 31, 2014,
compared to $9.1 million for 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. Also included in
consolidated finance expense is an accretion expense of $9.3 million (year
ended January 31, 2013 - $2.4 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 $14.6 million was incurred during the year ended
January 31, 2014, compared to $1.8 million in the prior year. Included in
exploration expense for the current year is $10.1 million of exploration work
on the Jay pipe within the Buffer Zone at the Ekati Diamond Mine and $4.5
million of exploration work on the Company's claims in the Northwest
Territories.

CONSOLIDATED FINANCE AND OTHER INCOME FROM CONTINUING OPERATIONS
Finance and other income of $3.2 million was recorded during the year ended
January 31, 2014, compared to $0.8 million in the prior year.

CONSOLIDATED FOREIGN EXCHANGE FROM CONTINUING OPERATIONS
A net foreign exchange loss of $8.9 million was recognized during the year
ended January 31, 2014, compared to a net foreign exchange gain of $0.5
million in 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)
                    2014    2014    2014    2014     2013    2013    2013    2013     2014     2013     2012
                      Q4      Q3      Q2      Q1       Q4      Q3      Q2      Q1    Total    Total    Total
Sales                                                                                             
 North          $     511 $      - $      - $  6,179 $   4,604 $  7,697 $  2,269 $  7,432 $   6,690 $  22,002 $  15,018
America
 Europe          112,001  45,088  80,530  61,642   84,346  57,438  50,514  54,370  299,262  246,668  231,722
 India             6,704   7,818  10,737  21,095   21,161  19,683   8,690  27,207   46,355   76,741   43,374
Total sales       119,216  52,906  91,267  88,916  110,111  84,818  61,473  89,009  352,307  345,411  290,114
Cost of sales      87,690  40,018  68,328  61,888   79,038  71,663  46,784  70,099  257,924  267,584  227,951
Gross margin       31,526  12,888  22,939  27,028   31,073  13,155  14,689  18,910   94,383   77,827   62,163
Gross margin        26.4%   24.4%   25.1%   30.4%    28.2%   15.5%   23.9%   21.2%    26.8%    22.5%    21.4%
(%)
Selling,            1,122   1,123   1,409   1,110    1,860   1,279   1,050     972    4,763    5,161    3,907
general and
administrative
expenses
Operating        $  30,404 $ 11,765 $ 21,530 $ 25,918 $  29,213 $ 11,876 $ 13,639 $ 17,938 $  89,620 $  72,666 $  58,256
profit
Depreciation
and
amortization
^(i)               28,885  12,434  21,768  19,906   24,042  20,283  12,874  21,876   82,993   79,075   77,529
EBITDA ^(ii)     $  59,289 $ 24,199 $ 43,298 $ 45,824 $  53,255 $ 32,159 $ 26,513 $ 39,814 $ 172,613 $ 151,741 $ 135,785

^(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 Measures" on page 20.

Three Months Ended January 31, 2014, ComparedtoThree Months Ended January
31, 2013

DIAVIK SALES
During the fourth quarter, the Company sold approximately 1.0 million carats
from the Diavik Diamond Mine for a total of $119.2 million for an average
price per carat of $114, compared to 0.8 million carats for a total of $110.1
million for an average price per carat of $133 in the comparable quarter of
the prior year. The 27% increase in volume of carats sold versus the
comparable quarter of the prior year resulted primarily from the sale during
the fourth quarter of inventory held back from sale in the prior quarter due
to a weakening of the rough diamond market resulting from macroeconomic
uncertainty in India. The 14% decrease in the Company's achieved average rough
diamond prices for the Diavik Diamond Mine as compared to the fourth quarter
of the prior year resulted primarily from a change in the sales mix of product
sold, partially offset by an increase in market prices for rough diamonds in
the fourth quarter compared to the prior year. At January 31, 2014, the
Company had 0.4 million carats of Diavik Diamond Mine produced inventory with
an estimated market value of approximately $65 million, compared to 0.5
million carats with an estimated market value of approximately $65 million in
the comparable quarter of the prior year.

Had the Company sold only the  last production shipped in the fourth  quarter, 
the estimated  achieved price  would have  been approximately  $119 per  carat 
based on the prices achieved in the January 2014 sale.

DIAVIK COST OF SALES AND GROSS MARGIN
The Company's fourth quarter cost of sales for the Diavik Diamond Mine was
$87.7 million resulting in a gross margin of 26.4%, compared to a cost of
sales of $79.0 million and a gross margin of 28.2% in the comparable quarter
of the prior year. Cost of sales for the fourth quarter included $28.9 million
of depreciation and amortization, compared to $23.6 million in the comparable
quarter of the prior year. The increase in depreciation and amortization is
due primarily to the sale during the fourth quarter of inventory held back
from sale in the third quarter due to a weakening of the rough diamond market
resulting from macroeconomic uncertainty in India. The Diavik segment
generated gross margins and EBITDA margins of 26.4% and 50%, respectively,
compared to 28.2% and 48%, 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 
incurred at the  Diavik Diamond Mine.  During the fourth  quarter, the  Diavik 
cash cost of  production was $43.3  million compared to  $44.8 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 January 31, 2014 and 2013.

(expressed in thousands of      Three months ended   Three months ended
United States dollars)                 January 31, 2014       January 31, 2013
Diavik cash cost of                  $      43,284        $      44,764
production
Private royalty                             2,287               2,040
Other cash costs                            1,270               1,272
Total cash cost of                         46,841              48,076
production
Depreciation and                           24,121              20,182
amortization
Total cost of production                   70,962              68,258
Adjusted for stock                         16,725              10,780
movements
Total cost of sales                  $      87,687        $      79,038

DIAVIK SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Diavik Diamond Mine segment during the quarter was $1.1
million, compared to $1.9 million in the comparable quarter of the prior year.

Year Ended January 31, 2014, ComparedtoYear Ended January 31, 2013

DIAVIK SALES
During the year ended January 31, 2014, the Company sold approximately 3.0
million carats from the Diavik Diamond Mine for a total of $352.3 million for
an average price per carat of $118 compared to 3.2 million carats for a total
of $345.4 million for an average price per carat of $109 in the comparable
period of the prior year. The 8% increase in the Company's achieved average
rough diamond prices and the 6% decrease in volume of carats sold 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.

DIAVIK COST OF SALES AND GROSS MARGIN
The Company's cost of  sales for the  Diavik Diamond Mine  for the year  ended 
January 31, 2014,  was $257.9  million resulting in  a gross  margin of  26.8% 
compared to a cost of sales of $267.6  million and a gross margin of 22.5%  in 
the comparable period  of the prior  year. Cost  of sales for  the year  ended 
January 31,  2014  included $83.0  million  of depreciation  and  amortization 
compared to $79.0  million in  the prior  year. This  segment generated  gross 
margins and EBITDA margins of 26.8%  and 49%, respectively, compared to  22.5% 
and 44%, respectively, in the prior year.

A substantial portion of consolidated cost of sales is mining operating costs,
incurred at the Diavik Diamond Mine.  During the year ended January 31,  2014, 
the Diavik  cash cost  of production  was $162.6  million compared  to  $171.4 
million in  the  comparable period  of  the prior  year.  Cost of  sales  also 
includes sorting costs, which  consist 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 twelve months ended January 31, 2014 and 2013.

(expressed in thousands of United               2014         2013
States dollars)
Diavik cash cost of production            $   162,648   $   171,442
Private royalty                                6,217        7,399
Other cash costs                               3,988        4,360
Total cash cost of production                172,853      183,201
Depreciation and amortization                 84,888       70,516
Total cost of production                     257,741      253,717
Adjusted for stock movements                     181       13,868
Total cost of sales                       $   257,922   $   267,585

DIAVIK SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Diavik Diamond Mine segment for the year ended January
31, 2014 was $4.8 million, compared to $5.2million in the comparable period
of the prior year.

OPERATIONAL UPDATE
For the 2013 calendar year, theDiavik Diamond Mine performed ahead of
target,producing (on a 100% basis) 7.2 million carats from 2.1million tonnes
of ore processed. The fourth quarter of calendar 2013 saw a continuing strong
performance from the Diavik Diamond Mine with production (on a 100% basis) of
2.1 million carats from 0.54 million tonnes of ore processed compared to
1.9million carats from 0.47 million tonnes of ore processed in the comparable
quarter of the prior year. This total production does include coarse ore
rejects ("COR"), which are not included in the Company's reserves and resource
statement and are therefore incremental to production.

Processing volumes in the fourth quarter of calendar 2013 were 16% higher than
the prior year's comparable quarter. This was a result of improvements in  the 
mining rates as the underground ramp up progressed throughout the year to full
production from all three pipes.

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

For the three months ended                              
December 31, 2013
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
A-154 South                                51       220             4.28
A-154 North                                69       144             2.10
A-418                                      94       418             4.46
Coarse Ore Rejects                          2        44                -
Total                                     216       826         3.66^(a)
^(a)Grade has been adjusted                            
to exclude COR.
                                                       
For the three months ended                              
December 31, 2012
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
A-154 South                                67       313             4.66
A-154 North                                42        89             2.11
A-418                                      77       344             4.49
Coarse Ore Rejects                          1        14                -
Total                                     187       760         4.01^(a)
^(a) Grade has been adjusted                            
to exclude COR.
                                                       
For the year ended December                             
31, 2013
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
A-154 South                               228       976             4.29
A-154 North                               288       606             2.11
A-418                                     326     1,160             3.56
Coarse Ore Rejects                          6       155                -
Total                                     848     2,897         3.26^(a)
^(a) Grade has been adjusted                            
to exclude COR.
                                                       
For the year ended December                             
31, 2012
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
A-154 South                               166       750             4.52
A-154 North                               173       354             2.05
A-418                                     482     1,732             3.59
Coarse Ore Rejects                          2        55                -
Total                                     823     2,892         3.45^(a)

^(a) Grade has been adjusted to exclude COR.

Diavik Operations Outlook

PRODUCTION
The mine plan for calendar 2014 foresees Diavik Diamond Mine production (on a
100% basis) of approximately 6.1 million carats from the mining and processing
of approximately 1.9 million tonnes of ore. Mining activities will be
exclusively underground with approximately 0.7 million tonnes expected to be
sourced from A-154 North, approximately 0.4 million tonnes from A-154 South
and approximately 0.8 million tonnes from A-418 kimberlite pipes. In addition
to the 6.1 million carats produced from underground mining there will be
production from COR and production from the improved recovery of small
diamonds. This additional production is not included in the Company's ore
reserves, and is therefore incremental. Based on 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 and 0.2 million carats
from the improved recovery process.

PRICING
Based on prices from the Company's rough diamond sales during the fourth
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:

                                February 2014
                                             sales cycle
                                           Average price
                                               per carat
Ore type                                 (in US dollars)
A-154 South                  $             145
A-154 North                               190
A-418                                     105
Coarse Ore Rejects                         50

COST OF SALES AND CASH COST OF PRODUCTION
Based on the current mine plan for theDiavik Diamond Minefor calendar 2014,
the Company currently expects its 40% share of the cost of sales for
theDiavik Diamond Minein fiscal 2015 to be approximately$280
million(including depreciation and amortization of approximately$100
million). The Company's 40% share of the cash cost of production at theDiavik
Diamond Minefor calendar 2014 is expected to be approximately$150 million at
an assumed average Canadian/US dollar exchange rate of$1.10.

CAPITAL EXPENDITURES
The Company currently expectsDominion Diamond Diavik LimitedPartnership's
40% share of the planned capital expenditures for theDiavik Diamond Minein
fiscal 2015 to be approximately$19 million, assuming an average Canadian/US
dollar exchange rate of$1.10. During the fourth quarter, DDDLP's share of
capital expenditures was $3.2 million ($26.6 million for the year ended
January 31, 2014).

The Company and Rio Tinto plc are currently assessing the rejuvenation of  the 
A-21 project which provides  a window of opportunity  to extract value of  the 
Diavik Diamond Mine before  the end of  its mine life.  Current work is  being 
completed on dike  design and  mining methodology with  the plan  to seek  Rio 
Tinto plc investment committee approval in the fall of 2014.

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)
                    2014       2014      2014      2014    2013    2013    2013    2013      2014     2013
                      Q4         Q3        Q2        Q1      Q4      Q3      Q2      Q1     Total    Total
Sales                                                                                            
North America    $     413 $        - $       - $       - $      - $      - $      - $      - $      413 $       -
Europe            111,542     95,232   170,536    19,921       -       -       -       -  397,231       -
India               1,992         -        -        -      -      -      -      -     1,992        -
Total sales       113,947     95,232   170,536    19,921       -       -       -       -   399,636        -
Cost of sales     114,340     96,202   162,758    19,647       -       -       -       -   392,948        -
Gross margin        (393)      (970)     7,778       274       -       -       -       -     6,688        -
Gross margin       (0.3%)     (1.0%)      4.6%      1.4%      -%      -%      -%      -%      1.7%       -%
(%)
Selling,            1,120        362       676       520       -       -       -       -     2,678        -
general and
administrative
expenses
Operating        $ (1,513)  $  (1,332)  $   7,102  $   (246) $      - $      - $      - $      - $    4,010 $       -
profit (loss)
Depreciation                                           
and
amortization
^(i)               25,892      19,166    10,513          -       -       -       -       -    55,572        -
EBITDA ^(ii)     $  24,379  $   17,834  $  17,615  $   (246) $      - $      - $      - $      - $   59,582 $       -

^(i)   Depreciation and amortization included in cost of sales and selling,
        general and administrative expenses. All sales of inventory purchased
        as part of the
        Ekati Diamond Mine Acquisition are accounted for as cash cost of
        sales.
^(ii)  Earnings before interest, taxes, depreciation and amortization
        ("EBITDA"). See "Non-IFRS Measures" on page 20.
^(iii) As a result of retrospective adjustments made reflecting the final
        purchase price allocation of the Ekati Diamond Mine and the accounting
        treatment for
        Misery South & Southwest pre-production revenue, the prior quarters
        have been recast.

Three months ended January 31, 2014

EKATI SALES
During the fourth quarter, the Company sold approximately 0.4 million carats
from the Ekati Diamond Mine for a total of $114.0 million for an average price
per carat of $276. Excluded from sales recorded in the fourth quarter were
carats produced and sold from the processing of satellite material from the
Misery South and Southwest kimberlite pipes as this material was excavated
during the pre-stripping operations of the Misery South and Southwest
kimberlite pipes. The Misery South and Southwest kimberlite pipes have been
designated as exploration targets, and are not currently classified as
resources. The diamonds that have been recovered to date from this material
display similar characteristics to diamonds from the Misery Main kimberlite
pipe. During the fourth quarter, the Company sold an estimated 0.2 million
carats of production from the Misery South and Southwest kimberlite pipe
material for estimated proceeds of $10.8 million. During pre-production, sales
of diamonds recovered from the Misery South and Southwest material have been
applied as a reduction of mining assets. At January 31, 2014, the Company had
0.5 million carats of Ekati Diamond Mine produced inventory with an estimated
market value of approximately $140 million.

EKATI COST OF SALES AND GROSS MARGIN
The Company's cost of sales for the Ekati Diamond Mine during the fourth
quarter was $114.3 million, resulting in a gross margin of (0.3)% and an
EBITDA margin of 21%. Cost of sales for the fourth quarter was impacted
slightly 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 $114.2million during the fourth
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 (0.2)% and 21%, respectively, if the
effect of the market value adjustment made as part of the Ekati Diamond Mine
Acquisition was excluded. At January 31, 2014, the Company had approximately
$10 million remaining of inventory acquired as part of the Ekati Diamond Mine
Acquisition, the majority of which are made up of production samples. 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.

Consolidated cost of  sales includes  mining operating costs  incurred at  the 
Ekati Diamond  Mine.  During  the  fourth quarter,  the  Ekati  cash  cost  of 
production was  $101.3 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  straight-line 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 January  31, 
2014.

                                                       Three months ended
(expressed in thousands of United States dollars)             January 31, 2014
Ekati cash cost of production                              $      101,320
Other cash costs including inventory acquisition                   1,055
Total cash cost of production                                    102,375
Depreciation and amortization                                     29,808
Total cost of production                                         132,183
Adjusted for stock movements                                    (17,843)
Total cost of sales                                        $      114,340

EKATI SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Ekati Diamond Mine segment for the quarter were $1.1
million.

Period from April 10, 2013 to January 31, 2014

EKATI SALES
During the period from April 10 to January 31, 2014, the Company sold
approximately 1.3 million carats from the Ekati Diamond Mine for a total of
$399.6 million for an average price per carat of $301. Excluded from sales
recorded in the fiscal year were carats produced and sold from the processing
of satellite material from the Misery South & Southwest kimberlite pipes as
this material was excavated during the pre-stripping of the Misery South and
Southwest kimberlite pipe. During the period from April 10 to January 31,
2014, the Company sold an estimated 0.2 million carats from the Misery South
and Southwest kimberlite pipes for estimated proceeds of $14.3 million.

Had the Company sold only the  last production shipped in the fourth  quarter, 
the estimated  achieved price  would have  been approximately  $287 per  carat 
based on the prices achieved in the January 2014 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 January 31, 2014, was $392.9 million, resulting in a gross margin
of 1.7% and an EBITDA margin of 15%. 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 $376.7million 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 5.7% and 26%, respectively, if the effect of the market value
adjustment made as part of the Ekati Diamond Mine Acquisition was excluded. At
January 31, 2014, the Company had approximately $10 million remaining of
inventory acquired as part of the Ekati Diamond Mine Acquisition, the majority
of which are made up of production samples. 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 Ekati Diamond Mine. During the period from April  10 
to January 31,  2014, the Ekati  cash cost of  production was $303.9  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 straight-line 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 January  31, 
2014.

(expressed in thousands of United States               April 10, 2013 to
dollars)                                                      January 31, 2014
Ekati cash cost of production                             $       303,902
Other cash costs                                                 167,794
Total cash cost of production                                    471,696
Depreciation and amortization                                     87,767
Total cost of production                                         559,463
Adjusted for stock movements                                   (166,515)
Total cost of sales                                       $       392,948

EKATI SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Ekati Diamond Mine segment for the period from April 10
to January 31, 2014 were $2.7 million.

OPERATIONAL UPDATE
During the fourth quarter of fiscal 2014, the Ekati Diamond Mine produced  (on 
a 100% basis) 0.5 million carats from the processing of 0.9million tonnes  of 
ore from the reserves.  Activities through the quarter  continued to focus  on 
ore production from the  Fox open pit, and  Koala and Koala North  underground 
pits. The Company also recovered 0.1 million carats from the processing of 0.1
million tonnes of coarse  ore rejects, and  from satellite material  excavated 
from the  Misery  South  &  Southwest  kimberlite  pipes,  this  material  was 
excavated  during  the  pre-stripping  of  the  Misery  South  and   Southwest 
kimberlite pipe. These diamond recoveries  were not included in the  Company's 
reserves and resource statement and are therefore incremental to production.

On November 18th, 2013, the Wek'èezhii Land and Water Board ("WLWB") issued  a 
Preliminary Screening Decision Report on the Lynx kimberlite pipe at the Ekati
Diamond Mine which determined that the Lynx pipe expansion could proceed  with 
the regulatory process. On  November 22, 2013, the  WLWB decided to refer  the 
Company's Detailed Project Report on the Jay and Cardinal kimberlite pipes  at 
the Ekati Diamond Mine  to the Mackenzie Valley  Review Board ("MVRB") for  an 
environmental assessment.  The  Company  expects  the  process  to  amend  the 
existing Water License  to incorporate  the Lynx pipe  to be  complete by  the 
third quarter of  fiscal 2015.  In February 2014,  the MVRB  issued the  final 
Terms  of  Reference  and  interim  draft  work  plan  for  the  environmental 
assessment of  the  Jay-Cardinal pipes.  The  Company expects  to  submit  its 
Developer's Assessment Report for the Jay-Cardinal pipes in the second quarter
of fiscal 2015.

During the period from April 10, 2013  to January 31, 2014, the Ekati  Diamond 
Mine produced (on a 100% basis) 1.2 million carats from the processing of  3.0 
million tonnes  of ore  from  the reserves.  The  Company also  recovered  0.4 
million carats from the processing of 0.4 million tonnes of coarse ore rejects
and satellite materials from the  Misery South and Southwest kimberlite  pipes 
and from the Koala North underground (inferred resource only).

EKATI DIAMOND MINE PRODUCTION (80% SHARE)

For the three months ended                              
January 31, 2014
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
Koala Phase 5                              51        21             0.41
Koala Phase 6                              75        87             1.16
Koala North                                69        60             0.87
Fox                                       452       125             0.28
Misery South & Southwest                   58        74             1.28
Coarse Ore Rejects                         29        18             0.62
Total                                     734       385             0.62
                                                       
                                                       
For the period from April 10,
2013 (date of acquisition) to                           
January 31, 2014
                                Ore processed    Carats            Grade
Pipe                             (000s tonnes)       (000s)     (carats/tonne)
Koala Phase 5                             168        68             0.40
Koala Phase 6                             182       239             1.31
Koala North                               220       165             0.75
Fox                                     1,853       560             0.30
Misery South & Southwest                  200       269             1.35
Coarse Ore Rejects                         63        23             0.37
Total                                   2,686     1,324             0.49

Ekati Operations Outlook

PRODUCTION
In fiscal 2015, the Ekati Diamond Mine expects to process (on a 100% basis)
approximately 2.6 million tonnes from the mineral reserve and produce
approximately 0.9 million carats. The Company expects to process approximately
1.7 million tonnes from the Fox pipe (including stockpiles) and approximately
0.9 million tonnes from the Koala underground operations split between Koala
phase 5 and phase 6 & 7. As part of the Koala deposit, a small portion of
inferred resources is extracted along with the reserves. This material is not
included in the current production estimate, but will be processed along with
the reserve ore and will be incremental to production. Mineral resources that
are not reserves do not have demonstrated economic viability. Additional plant
feed to keep the processing plant at capacity for the period will be sourced
from satellite material from the Misery South and Southwest kimberlite pipes
as well as the stockpile of coarse ore rejects. The Misery South and Southwest
satellite bodies as well as the coarse ore rejects are not included in the
Company's reserves and resource statement and are therefore considered
incremental to production.

PRICING
Based on prices from the Company's rough diamond sales during the fourth
quarter 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:

                                      February 2014
                                                   Sales Cycle
                                                 Average price
                                                     per carat
Ore type                                       (in US dollars)
Koala Phase 5                      $             365
Koala Phase 6                                   420
Koala North                                     440
Fox                                             315
Misery South & Southwest                     80-100
Coarse Ore Rejects                           65-120

COST OF SALES AND CASH COST OF PRODUCTION
Based on the current mine plan for the Ekati Diamond Mine for fiscal 2015, the
Company currently expects cost of sales at the Ekati Diamond Mine (on a 100%
basis) in fiscal 2015 to be approximately $520 million (including depreciation
and amortization of approximately $125million). The cash cost of production
at the Ekati Diamond Mine for fiscal 2015 is expected to be approximately $340
million (on a 100% basis) at an assumed average Canadian/US dollar exchange
rate of $1.10.

CAPITAL EXPENDITURES
The planned capital expenditures for the Core Zone at the Ekati Diamond Mine
for fiscal 2015 (on a 100% basis) are expected to be approximately $180
million at an assumed average Canadian/US dollar exchange rate of $1.10. The
planned capital expenditures include approximately $95 million for the
continued development of the Misery Pipe, consisting largely of mining costs
to access ore release, and approximately $50 million towards the development
of the Pigeon Pipe. During the fourth quarter, the Ekati Diamond Mine incurred
capital expenditures of $30.2 million ($95.6 million for the period from April
10, 2013 to January 31, 2014).

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)
                   2014     2014      2014      2014     2013     2013     2013     2013      2014      2013      2012
                     Q4       Q3        Q2        Q1       Q4       Q3       Q2       Q1     Total     Total     Total
Sales           $      - $       - $        - $        - $       - $       - $       - $       - $        - $        - $        -
Cost of sales          -        -         -         -        -        -        -        -         -         -         -
Gross margin           -        -         -         -        -        -        -        -         -         -         -
Gross margin          -%       -%        -%        -%       -%       -%       -%       -%         %        -%        -%
(%)
Selling,           7,875    5,924    12,971    15,213    8,227    6,302    4,700    5,767    41,981    24,996    20,679
general and
administrative
expenses
Operating loss  $ (7,875) $ (5,924) $ (12,971) $ (15,213) $ (8,227) $ (6,302) $ (4,700) $ (5,767) $ (41,981) $ (24,996) $ (20,679)
Depreciation   
and
amortization
^(i)                  451      378       363       305      304      306      286      296     1,496     1,191     1,231
EBITDA ^(ii)    $ (7,424) $ (5,546) $ (12,608) $ (14,908) $ (7,923) $ (5,996) $ (4,414) $ (5,471) $ (40,485) $ (23,805) $ (19,448)

^(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 Measures" on page 20.

Three Months Ended January 31, 2014, ComparedtoThree Months Ended January
31, 2013

CORPORATE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Corporate segment during the quarter decreased by $0.4
million from the comparable quarter of the prior year.

Year Ended January 31, 2014, ComparedtoYear Ended January 31, 2013

CORPORATE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses for the Corporate segment during the year ended January 31, 2014
increased by $17.0 million from the prior year. The increase from the prior
year was primarily due to $11.2 million of transaction costs and $4.9 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 the 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 January 31, 2014, the Company had unrestricted cash and cash equivalents
of $224.8million and restricted cash of $113.6 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
year ended January 31, 2014, the Company reported cash flow from operations of
$166.3million compared to $105.1 million in the prior year.

As at January 31, 2014,  the Company had 1.0  million carats of rough  diamond 
inventory with an  estimated market  value of approximately  $205 million,  of 
which approximately $45 million represented inventory available for sale, with
the remaining $160 million being sorted.

Working  capital  increased  to  $572.1million  at  January  31,  2014   from 
$361.5million at January  31, 2013.  During the year,  the Company  increased 
accounts receivable  from continuing  operations  by $2.5  million,  decreased 
other current  assets from  continuing operations  by $2.9million,  decreased 
inventory and supplies from continuing  operations by $9.8 million,  decreased 
trade and  other  payables from  continuing  operations by  $5.2  million  and 
increased employee benefit plans from continuing operations by $1.4 million.

The Company's liquidity requirements fluctuate from year over year and quarter
over 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 year,  and the volume, size  and quality distribution  of 
rough diamonds delivered from the Company's mineral properties and sold by the
Company in the year.

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 12 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, 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 Ekati Diamond Mine  Acquisition 
was completed on April  10, 2013. 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. The new facilities were subsequently cancelled in fiscal
2014.

As at January  31, 2014,  $nil and $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, respectively, compared  to $nil and  $1.1 million at  January 
31, 2013.

Investing Activities
During the fiscal year, the Company purchased property, plant and equipment of
$122.3million for its continuing operations, of which $26.6million was
purchased for the Diavik Diamond Mine and $95.7 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 2014 to 2018 of approximately
$78million in the aggregate assuming a Canadian/US average exchange rate of
$1.10 for each of the fiveyears, 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 in the table below are currently
estimated capital expenditures for the fiscal years 2015 to 2019 of
approximately $404million in the aggregate assuming a Canadian/US average
exchange rate of $1.10 for each of the fiveyears, representing the current
planned capital expenditures (excluding Jay-Cardinal pipes) at the Ekati
Diamond Mine. The most significant contractual obligations for the ensuing
five-year period can be summarized as follows:

CONTRACTUAL                       Less     Year     Year   After
OBLIGATIONS                              than
(expressed in           Total    1 year      2-3      4-5       5
thousands of                                                             years
United States
dollars)
Interest-bearing     $   5,297  $   1,140  $  2,271  $  1,886  $     -
loans and
borrowings (a)(b)
Environmental and     197,359   190,775    2,325    4,259       -
participation
agreements
incremental
commitments (c)
Operating lease        12,975     7,385    5,590        -       -
obligations (d)
Total contractual    $ 215,631  $ 199,300  $ 10,186  $  6,145  $     -
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 14.25%. At January 31, 2014, $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 January 31,
     2014, $4.3 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 January 31, 2014,
     and have been included under interest-bearing loans and
     borrowings in the table above. Interest payments for the next 12 months
     are approximated to be $0.3million.
    
(c) Both the Diavik Joint Venture and the Ekati Diamond Mine, under
     environmental and other agreements, must provide funding for the
     Environmental Monitoring Advisory Board, and the Independent
     Environmental Monitoring Agency, respectively. 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 January 31, 2014
     was $58million 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. In June
     2013, the WLWB adjusted the total reclamation liability for the Ekati
     Diamond Mine (inclusive of Sable property) to reflect the revised Interim
     Closure and Reclamation Plan, and this liability is currently set at
     CDN $264 million. 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, and has provided a proposal to the Government of the
     Northwest Territories and the Government of Canada on an appropriate form
     of security. 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 and EBITDA Margin
The term EBITDA (earnings before interest, taxes, depreciation and
amortization) is a non-GAAP financial measure, which is defined as sales minus
cost of sales and selling, general and administrative expenses, meaning it
represents operating profit before depreciation and amortization. EBITDA
margin is calculated using EBITDA over total sales for the period.

Management believes that  EBITDA and  EBITDA margin  are important  indicators 
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. The intent  of 
EBITDA and  EBITDA  margin is  to  provide additional  useful  information  to 
investors and analysts and the measure does not have any standardized  meaning 
under IFRS.  These  measures should  not  be  considered in  isolation  or  as 
substitute for measures of performance prepared in accordance with IFRS. Other
issuers may calculate EBITDA and EBITDA margins differently.

CONSOLIDATED                                                                                       
                                                                                                  
(expressed
in thousands
of United                                                                                          
States
dollars)
(unaudited)
                 2014     2014      2014      2014     2013     2013     2013     2013      2014      2013      2012
                   Q4       Q3        Q2        Q1       Q4       Q3       Q2       Q1     Total     Total     Total
Operating     $  20,016 $   4,509 $   15,661 $   10,459 $  20,987 $   5,574 $   8,939 $  12,171 $   51,645 $   47,671 $   37,574
profit
(loss) from
continuing
operations
Depreciation    55,228   31,978    32,644    20,211   24,346   20,588   13,160   22,172   140,061    80,266    78,761
and
amortization
EBITDA from   $  75,244 $  36,487 $   48,305 $   30,670 $  45,333 $  26,162 $  22,099 $  34,343 $  191,706 $  127,937 $  116,335
continuing
operations
                                                                                                  
                                                                                                  
DIAVIK
DIAMOND MINE                                                                                       
SEGMENT
                                                                                                  
(expressed
in thousands
of United                                                                                          
States
dollars)
(unaudited)
                 2014     2014      2014      2014     2013     2013     2013     2013      2014      2013      2012
                   Q4       Q3        Q2        Q1       Q4       Q3       Q2       Q1     Total     Total     Total
Operating     $  30,404 $  11,765 $   21,530 $   25,918 $  29,213 $  11,876 $  13,639 $  17,938 $   89,619 $   72,666 $   58,256
profit
Depreciation    28,885   12,434    21,768    19,906   24,042   20,283   12,874   21,876    82,993    79,075    77,529
and
amortization
EBITDA        $  59,289 $  24,199 $   43,298 $   45,824 $  53,255 $  32,159 $  26,513 $  39,814 $  172,612 $  151,741 $  135,785
                                                                                                  
                                                                                                  
EKATI
DIAMOND MINE                                                                                       
SEGMENT
                                                                                                  
(expressed
in thousands
of United                                                                                          
States
dollars)
(unaudited)
                 2014     2014      2014      2014     2013     2013     2013     2013      2014      2013      2012
                   Q4       Q3        Q2        Q1       Q4       Q3       Q2       Q1     Total     Total     Total
Operating     $ (1,513) $ (1,332) $    7,102 $    (246) $       - $       - $       - $       - $    4,010 $        - $        -
profit
(loss)
Depreciation    25,892   19,166    10,513         -        -        -        -        -    55,572         -         -
and
amortization
EBITDA        $  24,379 $  17,834 $   17,615 $    (246) $       - $       - $       - $       - $   59,582 $        - $        -
                                                                                                  
                                                                                                  
CORPORATE                                                                                          
SEGMENT
                                                                                                  
(expressed
in thousands
of United                                                                                          
States
dollars)
(unaudited)
                 2014     2014      2014      2014     2013     2013     2013     2013      2014      2013      2012
                   Q4       Q3        Q2        Q1       Q4       Q3       Q2       Q1     Total     Total     Total
Operating     $ (7,875) $ (5,924) $ (12,971) $ (15,213) $ (8,227) $ (6,302) $ (4,700) $ (5,767) $ (41,981) $ (24,996) $ (20,679)
profit
(loss)
Depreciation       451      378       363       305      304      306      286      296     1,496     1,191     1,231
and
amortization
EBITDA        $ (7,424) $ (5,546) $ (12,608) $ (14,908) $ (7,923) $ (5,996) $ (4,414) $ (5,471) $ (40,485) $ (23,805) $ (19,448)

RISK AND UNCERTAINTIES
The Company 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 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 political 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 licences and permits from the Canadian
and Northwest Territories governments, and the process for obtaining and
renewing of such licences and permits often takes an extended period of time
and is subject to numerous delays and uncertainties. Such licences 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 licences 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 licences and
permits, or that DDMI or the Company will be able to obtain on a timely basis
or maintain in the future all necessary licences 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  January 31, 2014 was $58  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. In June 2013, the WLWB adjusted the total
reclamation liability  for the  Ekati  Diamond Mine  (inclusive of  the  Sable 
property) to reflect  the revised  Interim Closure and  Reclamation Plan,  and 
this liability is currently  set at CDN  $264 million. The  Company has as  at 
January 31,  2014  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,  and  has  provided  a 
proposal to the Government of the Northwest Territories and the Government  of 
Canada on an appropriate form of security. 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.

Labour Relations
The Company is party to a collective bargaining agreement at its Ekati Diamond
Mine operation which will  expire on August 31,  2014. The Company expects  to 
begin re-negotiations on this labour agreement early in calendar 2014. If  the 
Company is unable to renew this agreement, or if the terms of any such renewal
are materially  adverse  to  the  Company, then  this  could  result  in  work 
stoppages and other  labour disruptions,  or otherwise  materially impact  the 
Company, all of which  could have a material  adverse effect on the  Company's 
business, results from operations and financial condition.

DISCLOSURE CONTROLS AND PROCEDURES
The Company has  designed a system  of disclosure controls  and procedures  to 
provide reasonable assurance  that material information  relating to  Dominion 
Diamond Corporation, including its consolidated subsidiaries, is made known to
management of the Company by others within those entities, particularly during
the period  in which  the Company's  annual filings  are being  prepared.  In 
designing  and  evaluating  the   disclosure  controls  and  procedures,   the 
management of  the Company  recognized that  any controls  and procedures,  no 
matter how well designed and  operated, can provide only reasonable  assurance 
of achieving  the  desired control  objectives.  The management  of  Dominion 
Diamond Corporation  was required  to  apply its  judgment in  evaluating  the 
cost-benefit relationship of possible controls and procedures. The results of
the inherent  limitations  in  all  control systems  means  no  evaluation  of 
controls can provide absolute assurance that all control issues and  instances 
of fraud, if any, have been detected.

The management of Dominion Diamond Corporation has evaluated the effectiveness
of the design and  operation of its disclosure  controls and procedures as  of 
the end of the period covered by the Annual Report. Based on that evaluation,
management has concluded  that these  disclosure controls  and procedures,  as 
defined  in  Canada  by  Multilateral  Instrument  52-109,  Certification   of 
Disclosure in Issuers' Annual and Interim Filings, and in the United States by
Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"),
are effective as of January 31,  2014, to ensure that information required  to 
be disclosed in  reports that  the Company will  file or  submit under  Canada 
securities legislation and the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in those rules and forms.

INTERNAL CONTROL OVER FINANCIAL REPORTING
The certifying officers  of the  Company have  designed a  system of  internal 
control over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with IFRS and the requirements of the US Securities and Exchange
Commission, as  applicable. Management  is responsible  for establishing  and 
maintaining  adequate  internal  control  over  financial  reporting  for  the 
Company, including its consolidated subsidiaries.

Management has evaluated the effectiveness of internal control over  financial 
reporting using the framework and criteria established in Internal Control  - 
Integrated  Framework   (1992),  issued   by  the   Committee  of   Sponsoring 
Organizations  of  the  Treadway   Commission.  Based  on  this   evaluation, 
management has concluded  that internal control  over financial reporting  was 
effective as of January 31, 2014.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
During the  fourth  quarter of  fiscal  2014, there  were  no changes  in  the 
Company's  disclosure  controls  and  procedures  or  internal  controls  over 
financial reporting  that materially  affected, or  are reasonably  likely  to 
materially  affect,  the  Company's  disclosure  controls  and  procedures  or 
internal control over financial reporting.

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 as permitted under NI 52-109 and the Exchange Act.

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

As at January 31, 2014                   
Current assets                            447,465
Long-term assets                          923,209
Current liabilities                        72,839
Long-term liabilities                     722,400
                                        
For the year ended January 31, 2014      
Revenue                                   399,636
Net loss                                 (40,820)

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 following discussion outlines
the accounting policies and practices that are critical to determining
Dominion Diamond Corporation's financial results.

Significant Judgments, Estimates and Assumptions
The preparation of the consolidated financial statements in conformity with
IFRS requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of
assets and liabilities and contingent liabilities at the date of the
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. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the most significant
effect on the amounts recognized in the consolidated financial statements is
as follows:

a.Significant Judgments in Applying Accounting Policies

Recovery of deferred tax assets
Judgment is required in determining whether deferred tax assets are recognized
in the  consolidated  balance  sheet. Deferred  tax  assets,  including  those 
arising from unused tax  losses, require management  to assess the  likelihood 
that the Company will generate taxable earnings in future periods in order  to 
utilize recognized deferred tax assets. Estimates of future taxable income are
based on forecasted income from operations and the application of existing tax
laws in each jurisdiction.  To the extent that  future taxable income  differs 
significantly from  estimates,  the ability  of  the Company  to  realize  the 
deferred tax assets recorded at the  consolidated balance sheet date could  be 
impacted. Additionally, future  changes in  tax laws in  the jurisdictions  in 
which the Company operates  could limit the ability  of the Company to  obtain 
tax deductions in future periods.

Commitments and contingencies
The Company has conducted its operations in the ordinary course of business in
accordance  with  its  understanding  and  interpretation  of  applicable  tax 
legislation in the countries  where the Company  has operations. The  relevant 
tax authorities could have a different  interpretation of those tax laws  that 
could lead to  contingencies or  additional liabilities for  the Company.  The 
Company believes that its  tax filing positions as  at the balance sheet  date 
are appropriate and supportable. Should the ultimate tax liability  materially 
differ from the provision, the Company's effective tax rate and its profit  or 
loss could be  affected positively or  negatively in the  period in which  the 
matters are resolved.

b.Significant Estimates and Assumptions in Applying Accounting Policies

Mineral reserves, mineral properties and exploration costs
The estimation  of  mineral reserves  is  a subjective  process.  The  Company 
estimates  its  mineral   reserves  based  on   information  compiled  by   an 
appropriately qualified  person.  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. Reserve estimates can be revised upward
or downward based  on the results  of future drilling,  testing or  production 
levels, anddiamond  prices.  Changes  in reserve  estimates  may  impact  the 
carrying value  of  exploration  and evaluation  assets,  mineral  properties, 
property, plant  and  equipment,  mine  rehabilitation  and  site  restoration 
provisions, recognition  of deferred  tax  assets, and  depreciation  charges. 
Estimates and assumptions about future events and circumstances are also  used 
to determine  whether economically  viable  reserves exist  that can  lead  to 
commercial development of an ore body.

Estimated mineral  reserves  are  used  in  determining  the  depreciation  of 
mine-specific assets. This  results in a  depreciation charge proportional  to 
the depletion  of  the  anticipated  remaining  life  of  mine  production.  A 
units-of-production depreciation  method  is  applied, and  depending  on  the 
asset, is based on carats of diamonds recovered during the period relative  to 
the estimated proven and probable reserves  of the ore deposit being mined  or 
to  the  total   ore  deposit.   Changes  in  estimates   are  accounted   for 
prospectively.

Impairment of long-lived assets
The Company assesses each cash-generating unit at least annually to  determine 
whether any indication of impairment exists. Where an indicator of  impairment 
exists, a  formal  estimate  of  the recoverable  amount  is  made,  which  is 
considered to be the higher of the fair  value of an asset less costs to  sell 
and its  value in  use. These  assessments require  the use  of estimates  and 
assumptions such as long-term commodity prices, discount rates, future capital
requirements,  exploration  potential  and  operating  performance.  Financial 
results as determined by actual events could differ from those estimated.

Mine rehabilitation and site restoration provision
Provision for the cost  of site closure and  reclamation is recognized at  the 
time  that  the  environmental  disturbance   occurs.  When  the  extent   of 
disturbance increases  over  the  life  of the  operation,  the  provision  is 
increased  accordingly.  Costs  included   in  the  provision  encompass   all 
restoration and rehabilitation activity  expected to occur progressively  over 
the life of the operation and at the time of closure. Routine operating costs
that may impact the ultimate  restoration and rehabilitation activities,  such 
as waste  material handling  conducted as  an  integral part  of a  mining  or 
production process, are  not included  in the provision.  Costs arising  from 
unforeseen  circumstances,   such  as   contamination  caused   by   unplanned 
discharges, are recognized as  an expense and liability  when the event  gives 
rise to an obligation which is probable and capable of reliable estimation.

The site closure and reclamation provision  is measured at the expected  value 
of future cash  flows and  is discounted  to its  present value.  Significant 
judgments and estimates are  involved in forming  expectations of future  site 
closure and reclamation activities and the amount and timing of the associated
cash flows. Those expectations are formed based on existing environmental and
regulatory requirements.  The  Ekati  Diamond Mine  rehabilitation  and  site 
restoration provision is prepared by management at the Ekati Diamond Mine.

The Diavik Diamond  Mine rehabilitation and  site restoration provisions  have 
been provided  by management  of the  Diavik  Diamond Mine  and are  based  on 
internal estimates. Assumptions,  based on the  current economic  environment, 
have been made  which DDMI  management believes  are a  reasonable basis  upon 
which to estimate the future liability. These estimates are reviewed regularly
by management of  the Diavik Diamond  Mine to take  into account any  material 
changes  to  the  assumptions.  However,  actual  rehabilitation  costs   will 
ultimately depend upon  future costs  for the  necessary decommissioning  work 
required,  which  will  reflect  market  conditions  at  the  relevant   time. 
Furthermore, the timing  of rehabilitation  is likely  to depend  on when  the 
Diavik Diamond Mine ceases to produce  at economically viable rates. This,  in 
turn, will depend upon  a number of factors  including future diamond  prices, 
which are inherently uncertain.

Pension benefits
The present value of  the pension obligations depends  on a number of  factors 
that are determined on an actuarial  basis using a number of assumptions.  The 
assumptions used in determining the net cost (income) for pensions include the
discount rate.  Any changes  in these  assumptions will  impact the  carrying 
amount of the pension obligation.

The Company determines the appropriate discount rate at the end of each year.
This is the interest rate that should  be used to determine the present  value 
of estimated  future cash  outflows  expected to  be  required to  settle  the 
pension obligations.  In  determining  the  appropriate  discount  rate,  the 
Company considers the interest rates of high quality corporate bonds that  are 
denominated in the currency in which the  benefits will be paid and that  have 
terms to maturity approximating the terms of the related pension obligation.

Other key assumptions  for pension obligations  are based in  part on  current 
market conditions. Additional information is disclosed in note 15.

CHANGES IN ACCOUNTING POLICIES
The  Company  has  adopted  the  following  new  standards,  along  with   any 
consequential amendments, effective February 1, 2013. These changes were made
in accordance with the applicable transitional provisions.

IFRS  10,  "Consolidated  Financial  Statements"  ("IFRS  10"),  replaced  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. The Company has  conducted a review of  all non-wholly owned  entities 
and determined that the adoption  of IFRS 10 did not  result in any change  in 
the consolidated status of any of its subsidiaries and investees.

IFRS 11, "Joint Arrangements" ("IFRS 11"), replaced 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 consolidated  financial statements upon  its 
adoption on February 1, 2013.

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  Company 
has added additional disclosures on fair  value measurement in note 25 to  the 
consolidated financial statements.

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. The adoption of IFRIC 20 did
not have a material impact on the Company's consolidated financial statements.

Amendments to IAS 19, which 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. The adoption  of 
revised IAS 19  did not materially  impact measurement or  recognition of  the 
Company's pension plans,  and additional  disclosures required  under the  new 
standard can be found in note 15 to the consolidated 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 
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 March 31, 2014                    
Authorized                                Unlimited
Issued and outstanding shares           85,124,480
Options outstanding                      2,438,000
Fully diluted                           87,562,480

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.

                         Consolidated Balance Sheets
        (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS) (UNAUDITED)
                                                                    
                                       January 31, 2014    January 31,
                                                                          2013
ASSETS                                                               
Current assets                                                       
 Cash and cash equivalents (note 5)    $          224,778   $     104,313
 Accounts receivable (note 6)                     20,879          3,705
 Inventory and supplies (note 7)                 440,853        115,627
 Other current assets (note 8)                    27,156         29,486
 Assets held for sale (note 10)                        -        718,804
                                                713,666        971,935
Property, plant and equipment (note            1,469,557        727,489
11)
Restricted cash (note 9)                         113,612              -
Other non-current assets (note 13)                 4,737          6,937
Deferred income tax assets (note                   3,078          4,095
16)
Total assets                           $        2,304,650   $   1,710,456
                                                                    
LIABILITIES AND EQUITY                                               
                                                                    
Current liabilities                                                  
 Trade and other payables (note 14)    $          103,653   $      39,053
 Employee benefit plans (note 15)                  3,643          2,634
 Income taxes payable (note 16)                   33,442         32,977
 Current portion of                                  794         51,508
interest-bearing loans and
borrowings (note 21)
 Liabilities held for sale (note                       -        484,252
10)
                                                141,532        610,424
Interest-bearing loans and                         3,504          4,799
borrowings (note 21)
Deferred income tax liabilities                  242,563        181,427
(note 16)
Employee benefit plans (note 15)                  14,120          3,499
Provisions (note 17)                             430,968         79,055
Total liabilities                                832,687        879,204
Equity                                                               
 Share capital (note 18)                         508,523        508,007
 Contributed surplus                              23,033         20,387
 Retained earnings                               775,419        295,738
 Accumulated other comprehensive                 (2,447)          6,357
income
 Total shareholders' equity                    1,304,528        830,489
 Non-controlling interest                        167,435            763
Total equity                                   1,471,963        831,252
Total liabilities and equity           $        2,304,650   $   1,710,456
The accompanying notes are an integral part of these consolidated financial
statements. 


                      Consolidated Statements of Income
 (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)
                                 (UNAUDITED)
                                                         
                                                  2014          2013
Sales                                       $    751,942   $    345,411
Cost of sales                                   650,872       267,584
Gross margin                                    101,070        77,827
Selling, general and administrative              49,425        30,156
expenses
Operating profit (note 19)                       51,645        47,671
Finance expenses                               (27,352)       (9,083)
Exploration costs                              (14,550)       (1,801)
Finance and other income                          3,153           780
Foreign exchange (loss) gain                    (8,879)           493
Profit before income taxes from                   4,017        38,060
continuing operations
Income tax expense (note 16)                    35,505        15,276
Net profit (loss) from continuing              (31,488)        22,784
operations
Net profit from discontinued                    502,656        12,434
operations (note 10)
Net profit                                  $    471,168   $     35,218
Net profit (loss) from continuing                                  
operations attributable to
 Shareholders                             $   (22,975)   $     22,276
 Non-controlling interest                     (8,513)           508
Net profit (loss) attributable to                                  
 Shareholders                             $    479,681   $     34,710
 Non-controlling interest                     (8,513)           508
Earnings (loss) per share - continuing                             
operations
 Basic                                      $     (0.27)   $       0.26
 Diluted                                      (0.27)          0.26
Earnings per share                                               
 Basic                                             5.64          0.41
 Diluted                                        5.59          0.41
Weighted average number of shares            85,019,802    84,875,789
outstanding (note 20)
The accompanying notes are an integral part of these consolidated financial
statements.


               Consolidated Statements ofComprehensiveIncome
        (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS) (UNAUDITED)
                                                         
                                                2014         2013
Net profit                                 $   471,168   $    35,218
Other comprehensive income                                      
 Items that may be reclassified to                       
  profit                                                                    
   Net loss on translation of net                       
     foreign operations (net of tax
     of nil)                                        (12,228)           (2,883)
 Items that will not be reclassified                     
  to profit                                                                 
   Actuarial gain (loss) on                             
     employee benefit plans (net of
     tax of $1.5 million for the year
     ended
     January 31, 2014; 2013 - $0.1
     million)                                          3,424             (846)
Other comprehensive loss, net of tax          (8,804)      (3,729)
Total comprehensive income                 $   462,364   $    31,489
 Comprehensive income (loss) from         $             $  
  continuing operations                             (29,686)            22,778
 Comprehensive income from                               
  discontinued operations                            492,050             8,711
Comprehensive income (loss)                               
attributable to                                                             
 Shareholders                             $   470,877   $    30,981
 Non-controlling interest                    (8,513)          508
The accompanying notes are an integral part of these consolidated financial
statements.


                 Consolidated Statements ofChangesinEquity
        (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS) (UNAUDITED)
                                                                   
                                                    2014         2013
Common shares:                                                      
Balance at beginning of period                 $   508,007   $   507,975
Issued during the period                              516           32
Balance at end of period                          508,523      508,007
Contributed surplus:                                                
Balance at beginning of period                     20,387       17,764
Stock-based compensation expense                    2,646        2,623
Balance at end of period                           23,033       20,387
Retained earnings:                                                  
Balance at beginning of period                    295,738      261,028
Net profit attributable to common                             
shareholders                                         479,681            34,710
Balance at end of period                          775,419      295,738
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 net foreign                    
    operations (net of tax of nil)                  (12,228)           (2,883)
 Items that will not be reclassified to                      
  profit                                                                    
  Actuarial gain (loss) on employee                         
    benefit plans (net of tax of $1.5
    million for the year ended
    January 31, 2014; 2013 - $0.1 million)             3,424             (846)
Balance at end of period                          (2,447)        6,357
Non-controlling interest:                                           
Balance at beginning of period                        763          255
Non-controlling interest                          (8,513)          508
Acquisition of Ekati Diamond Mine (note 4)        163,776           -
Contributions made by minority partners            11,409            -
Balance at end of period                          167,435          763
Total equity                                   $ 1,471,963   $   831,252
The accompanying notes are an integral part of these consolidated financial
statements.


                    Consolidated Statements of Cash Flows
        (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS) (UNAUDITED)
                                                          
                                                 2014          2013
Cash provided by (used in)                                        
OPERATING                                                         
Net profit (loss)                           $   471,168   $     22,784
 Depreciation and amortization                 140,061        80,266
 Deferred income tax recovery                  (4,894)       (9,752)
 Current income tax expense                     40,399        25,028
 Finance expenses                               27,351         9,083
 Stock-based compensation                        2,646         2,623
 Other non-cash items                         11,092       (1,761)
 Foreign exchange (gain) loss                   10,166          (45)
 Loss (gain) on disposition of assets              362         (330)
Change in non-cash operating working             6,320         8,871
capital, excluding taxes and finance
expenses
Cash provided by (used in) operating           704,671       136,767
activities
 Interest paid                               (6,383)       (5,318)
 Income and mining taxes paid                 (29,354)      (15,987)
Cash provided by (used in) operating           668,934       115,462
activities - continuing operations
Cash provided by (used in) operating         (502,656)      (10,339)
activities - discontinued operations
Net cash from (used in) operating              166,278       105,123
activities
FINANCING                                                         
Increase (decrease) in interest-bearing          (789)       (5,359)
loans and borrowings
Increase in revolving credit                         -        38,765
Decrease in revolving credit                   (1,128)      (41,898)
Repayment of senior secured credit            (50,000)             -
facility
Issue of common shares, net of issue               516            32
costs
Contribution from non-controlling                2,414       (8,000)
interest
Cash provided from financing activities       (48,987)      (16,460)
- continuing operations
Cash provided from financing activities              -        39,880
- discontinued operations
Cash provided from financing activities       (48,987)        23,420
INVESTING                                                         
Acquisition of Ekati                         (490,925)           - 
Property, plant and equipment                (122,278)      (56,478)
Net proceeds from sale of property,              1,911         2,619
plant and equipment
Other non-current assets                       (2,981)            50
Cash provided in investing activities -      (614,273)      (53,809)
continuing operations
Cash provided in investing activities -       746,738      (25,023)
discontinued operations
Cash used in investing activities              132,465      (78,832)
Foreign exchange effect on cash balances      (15,679)         (378)
Increase in cash and cash equivalents          234,077        49,333
Cash and cash equivalents, beginning of        104,313        78,116
period
Cash and equivalents, end of period            338,390       127,449
Less cash and equivalents of                         -        23,136
discontinued operations, end of period
Cash and cash equivalents of continuing     $   338,390   $    104,313
operations, end of period
Change in non-cash operating working                              
capital, excluding taxes and finance
expenses
Accounts receivable                            (2,532)       (1,747)
Inventory and supplies                           9,758         8,994
Other current assets                             2,850           148
Trade and other payables                       (5,164)            72
Employee benefit plans                           1,408         1,404
                                           $     6,320   $      8,871
The accompanying notes are an integral part of these consolidated financial
statements.

                  Notes to Consolidated Financial Statements

            JANUARY 31, 2014 (UNAUDITED) 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 
under the  symbol "DDC".  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  (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 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 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
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  within 
the consolidated financial statements.

On March 26, 2013, the Company completed the sale of the Luxury Brand  Segment 
to Swatch  Group.  The  operations  of the  Luxury  Brand  Segment  have  been 
presented as discontinued operations for reporting purposes. See note 10. 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".

Note 2:
Basis of Preparation

(a)Statement of compliance
These consolidated financial statements ("financial statements") have been
prepared in accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board ("IASB").

These financial statements were  prepared on a going  concern basis under  the 
historical cost method  except for  certain financial  assets and  liabilities 
which are measured  at fair  value. The significant  accounting policies  are 
presented in Note 3 and have been consistently applied in each of the  periods 
presented.

(b)Currency of presentation
These 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 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 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

The accounting policies set  out below have been  applied consistently to  all 
periods presented in  these consolidated financial  statements, and have  been 
applied consistently by Company entities.

(a)Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at January 31, 2014. Subsidiaries are fully
consolidated from the date of acquisition or creation, being the date on which
the Company obtains control, and continue to be consolidated until the date
that such control ceases. The financial statements of the Company's
subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies. All intercompany balances, income and
expenses, and unrealized gains and losses resulting from intercompany
transactions are eliminated in full. For partly owned subsidiaries, the net
assets and net earnings attributable to minority shareholders are presented as
non-controlling interests within the consolidated financial statements.

Interest in Diavik Joint Venture
DDDLP has an undivided 40% ownership  interest in the assets, liabilities  and 
expenses of the Diavik Joint Venture. The Company records its interest in  the 
assets,  liabilities  and  expenses  of  the  Diavik  Joint  Venture  in   its 
consolidated  financial  statements  with  a  one-month  lag.  The  accounting 
policies described below include those of the Diavik Joint Venture.

Interest in Ekati Diamond Mine
Dominion Diamond Delware Company LLC ("DDDLC") has an undivided 80%  ownership 
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 interest (20% in  the Core Zone and 41.2% in  the 
Buffer Zone) within the consolidated financial statements.

(b)Revenue
Sales of rough diamonds are recognized when significant risks and rewards of
ownership are transferred to the customer, the amount of sales can be measured
reliably and the receipts of future economic benefits are probable. Sales are
measured at the fair value of the consideration received or receivable and
after eliminating sales within the Company.

(c)Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, balances with banks and
short-term money market instruments (with a maturity on acquisition of less
than 90 days), and are carried at fair value.

(d)Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and generally do
not bear interest. Account balances are written off against the allowance
after all means of collection have been exhausted and the potential for
recovery is considered remote.

(e)Inventory and supplies
Rough diamond inventory is recorded at the lower of cost or net realizable
value. Cost is determined on an average cost basis including production costs
and value-added processing activity.

Supplies inventory is recorded at the  lower of cost or net realizable  value. 
Supplies inventory  includes consumables  and spare  parts maintained  at  the 
Diavik Diamond  Mine, Ekati  Diamond Mine  and at  the Company's  sorting  and 
distribution facility locations.

Net realizable value is the estimated selling price in the ordinary course  of 
business, less estimated costs  of completion and costs  of selling the  final 
product. In order to  determine net realizable value,  the carrying amount  of 
obsolete and slow moving items  is written down on a  basis of an estimate  of 
their future use or realization. A provision for obsolescence is made when the
carrying amount is higher than net realizable value.

(f)Assets held for sale and discontinued operations
A discontinued operation represents a separate major line of business that
either has been disposed of or is classified as held for sale. Classification
as held for sale applies when an asset's carrying value will be recovered
principally through a sale transaction rather than through continuing use, it
is available for immediate sale in its present condition and its sale is
highly probable. Results for assets held for sale are disclosed separately as
net profit from discontinued operations in the consolidated statements of
income and comparative periods are reclassified accordingly.

(g)Business combination and goodwill
Acquisitions of businesses are accounted for using the purchase method of
accounting whereby all identifiable assets and liabilities are recorded at
their fair value as at the date of acquisition. Any excess purchase price
over the aggregate fair value of identifiable net assets is recorded as
goodwill. Goodwill is identified and allocated to cash-generating units
("CGU"), or groups of CGU's, that are expected to benefit from the synergies
of the acquisition. A CGU to which goodwill has been allocated is tested for
impairment annually, and whenever there is an indication that the CGU may be
impaired. For goodwill arising on acquisition in a financial year, the CGU to
which goodwill has been allocated is tested for impairment before the end of
that financial year.

When the recoverable amount  of the CGU  is less than  the carrying amount  of 
that CGU, the impairment loss is first allocated to reduce the carrying amount
of any goodwill allocated to  that CGU, and then to  the other assets of  that 
CGU pro rata on the  basis of the carrying amount  of each asset in the  CGU. 
Any impairment loss for  goodwill is recognized  directly in the  consolidated 
statement of income. An impairment loss recorded on goodwill is not  reversed 
in subsequent periods.

(h)Exploration, evaluation and development expenditures
Exploration and evaluation activities include: acquisition of rights to
explore; topographical, geological, geochemical and geophysical studies;
exploratory drilling; trenching and sampling; and activities involved in
evaluating the technical feasibility and commercial viability of extracting
mineral resources. Mineral exploration is expensed as incurred. Exploration
costs are only capitalized when the exploration activity relates to proven and
probable reserves. Capitalized exploration and evaluation expenditures are
recorded as a component of property, plant and equipment. Exploration and
evaluation assets are no longer classified as such when the technical
feasibility and commercial viability of extracting a mineral resource are
demonstrable. Before reclassification, exploration and evaluation assets are
assessed for impairment. Recognized exploration and evaluation assets will be
assessed for impairment when the facts and circumstances suggest that the
carrying amount may exceed its recoverable amount.

Drilling and related costs  are capitalized for an  ore body where proven  and 
probable reserves  exist  and  the  activities  are  directed  at  either  (a) 
obtaining additional information  on the  ore body that  is classified  within 
proven and probable reserves, or (b) converting non-reserve mineralization  to 
proven and probable reserves and the  benefit is expected to be realized  over 
an extended period of time. All other drilling and related costs are  expensed 
as incurred.

(i)Property, plant and equipment
Items of property, plant and equipment are measured at cost, less accumulated
depreciation and accumulated impairment losses. The initial cost of an asset
comprises its purchase price and construction cost, any costs directly
attributable to bringing the asset into operation, including stripping costs
incurred in open pit development before production commences, the initial
estimate of the rehabilitation obligation, and for qualifying assets,
borrowing costs. The purchase price or construction cost is the aggregate
amount paid and the fair value of any other consideration given to acquire the
asset.

When parts of an item of  property, plant and equipment have different  useful 
lives, the parts  are accounted for  as separate items  (major components)  of 
property, plant and equipment.

Gains and losses on disposal of an  item of property, plant and equipment  are 
determined by  comparing the  proceeds  from the  disposal with  the  carrying 
amount of property,  plant and  equipment and  are recognized  within cost  of 
sales or selling, general and administrative expenses.

(i)DEPRECIATION
Depreciation commences when the  asset is available  for use. Depreciation  is 
charged so as to write off the depreciable amount of the asset to its residual
value over its estimated useful life, using a method that reflects the pattern
in which the asset's future economic  benefits are expected to be consumed  by 
the Company.

The unit-of-production  method is  applied  to a  substantial portion  of  the 
Diavik Diamond Mine and Ekati Diamond Mine property, plant and equipment, and,
depending on the asset,  is based on carats  of diamonds recovered during  the 
period relative to the estimated proven  and probable ore reserves of the  ore 
deposit being mined, or to the  total ore deposit. The Company currently  does 
not include  estimates of  measured, indicated  or inferred  resources in  its 
calculation  of  ore  reserves.  Other  property,  plant  and  equipment   are 
depreciated using the straight-line method over the estimated useful lives  of 
the related assets,  for the  current and  comparative periods,  which are  as 
follows:

Asset                                          Estimated useful life
                                                                       (years)
Buildings                                                      10-40
Machinery and mobile equipment                                  3-10
Computer equipment and software                                    3
Furniture, fixtures and                                         2-10
equipment
Leasehold and building                                      Up to 20
improvements

Amortization for mine related assets was charged to mineral properties  during 
the pre-commercial production stage.

Upon the disposition of an asset, the accumulated depreciation and accumulated
impairment losses are deducted from the original cost, and any gain or loss is
reflected in current net profit or loss.

Depreciation methods, useful lives  and residual values  are reviewed at  each 
financial year end and adjusted if  appropriate. The impact of changes to  the 
estimated useful lives or residual values is accounted for prospectively.

(ii)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  deferred mineral  property costs  within  mining 
assets.

IFRIC 20  specifies the  accounting for  costs associated  with waste  removal 
(stripping) during the production  phase of a surface  mine. When the  benefit 
from the stripping activity is realised  in the current period, the  stripping 
costs are accounted  for as the  cost of  inventory. When the  benefit is  the 
improved access  to ore  in future  periods,  the costs  are recognised  as  a 
non-current asset, if certain criteria are met. After initial recognition, the
stripping activity  asset  is  depreciated  on a  systematic  basis  (unit  of 
production method) over the expected  useful life of the identified  component 
of the ore  body that becomes  more accessible  as a result  of the  stripping 
activity.

(iii)MAJOR MAINTENANCE AND REPAIRS
Expenditure on  major maintenance  refits  or repairs  comprises the  cost  of 
replacement assets or parts  of assets and overhaul  costs. When an asset,  or 
part of  an asset  that was  separately  depreciated, is  replaced and  it  is 
probable that future economic benefits associated with the new asset will flow
to the Company through an extended  life, the expenditure is capitalized.  The 
unamortized value of the existing asset or part of the existing asset that  is 
being replaced  is  expensed.  Where  part  of  the  existing  asset  was  not 
separately considered  as  a  component,  the replacement  value  is  used  to 
estimate the  carrying amount  of the  replaced assets,  which is  immediately 
written off. All other day-to-day maintenance costs are expensed as incurred.

(j)Financial instruments
From time to time, the Company may use a limited number of derivative
financial instruments to manage its foreign currency and interest rate
exposure. For a derivative to qualify as a hedge at inception and throughout
the hedged period, the Company formally documents the nature and relationships
between the hedging instruments and hedgeditems, as well as its
risk-management objectives, strategies for undertaking the various hedge
transactions andmethod of assessing hedge effectiveness. Financial
instruments qualifying for hedge accounting must maintain a specified levelof
effectiveness between the hedge instrument and the item being hedged, both at
inception and throughout the hedged period. Gains and losses resulting from
any ineffectiveness in a hedging relationship are recognized immediately in
net profit or loss.

(k)Provisions
Provisions represent obligations to the Company for which the amount or timing
is uncertain. Provisions are recognized when (a) the Company has a present
obligation (legal or constructive) as a result of a past event, (b) it is
probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and (c) a reliable estimate can be made of
the amount of the obligation. The expense relating to any provision is
included in net profit or loss. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the obligation. Where
discounting is used, the increase in the provision due to the passage of time
is recognized as a finance cost in net profit or loss.

Mine rehabilitation and site restoration provision:
The Company  records  the  present  value of  estimated  costs  of  legal  and 
constructive obligations required to restore operating locations in the period
in  which  the  obligation  is  incurred.  The  nature  of  these  restoration 
activities includes dismantling and removing structures, rehabilitating  mines 
and tailings  dams, dismantling  operating facilities,  closure of  plant  and 
waste sites, and restoration, reclamation and re-vegetation of affected areas.

The  obligations  generally  arise  when   the  asset  is  installed  or   the 
ground/environment is disturbed at the production location. When the liability
is  initially  recognized,  the  present  value  of  the  estimated  cost   is 
capitalized by  increasing the  carrying amount  of the  related assets.  Over 
time, the  discounted  liability  is increased/decreased  for  the  change  in 
present value  based  on  the  discount  rates  that  reflect  current  market 
assessments and the risks specific  to the liability. Additional  disturbances 
or changes in rehabilitation costs,  including re-measurement from changes  in 
the discount rate, are recognized as additions or charges to the corresponding
assets and rehabilitation liability when they occur. The periodic unwinding of
the discount is recognized in net profit or loss as a finance cost.

(l)Foreign currency

Foreign currency translation
Monetary  assets  and  liabilities  denominated  in  foreign  currencies   are 
translated to US  dollars at  exchange rates in  effect at  the balance  sheet 
date, and  non-monetary assets  and  liabilities are  translated at  rates  of 
exchange in  effect when  the assets  were acquired  or obligations  incurred. 
Revenues and expenses are  translated at rates  in effect at  the time of  the 
transactions. Foreign exchange gains and losses are included in net profit  or 
loss.

For certain subsidiaries of the Company  where the functional currency is  not 
the US dollar, the assets and liabilities of these subsidiaries are translated
at the rate of exchange  in effect at the  reporting date. Sales and  expenses 
are translated  at  the  rate  of  exchange in  effect  at  the  time  of  the 
transactions. Foreign  exchange  gains and  losses  are accumulated  in  other 
comprehensive income within shareholders' equity. When a foreign operation  is 
disposed of, in part or in full,  the relevant amount in the foreign  exchange 
reserve account is reclassified  to net profit  or loss as  part of profit  or 
loss on disposal.

(m)Income taxes

Current and deferred taxes
Income tax expense comprises current and deferred tax and is recognized in net
profit or  loss except  to the  extent  that it  relates to  items  recognized 
directly in equity,  in which  case it  is recognized  in equity  or in  other 
comprehensive income.

Current tax expense is the expected tax payable on the taxable income for  the 
year, using tax rates enacted or substantively enacted at the reporting  date, 
and any adjustment to tax payable  in respect of previous years. Deferred  tax 
expense is recognized in respect of temporary differences between the carrying
amounts of assets  and liabilities  for financial reporting  purposes and  the 
amounts used for taxation  purposes. Deferred tax expense  is measured at  the 
tax rates that are expected to  be applied to temporary differences when  they 
reverse, based on the laws that have been enacted or substantively enacted  by 
the reporting date.

A deferred tax  asset is recognized  to the  extent that it  is probable  that 
future  taxable  profits  will  be  available  against  which  the   temporary 
difference can be utilized. Deferred tax assets are reviewed at each reporting
date and are reduced to  the extent that it is  probable that the related  tax 
benefit will not be realized.

Deferred income  and mining  tax assets  and deferred  income and  mining  tax 
liabilities are  offset,  if a  legally  enforceable right  exists  to  offset 
current tax assets  against current  income tax liabilities  and the  deferred 
income taxes  relate  to  the  same  taxable  entity  and  the  same  taxation 
authority.

The Company classifies foreign exchange differences on deferred tax assets  or 
liabilities in jurisdictions where the  functional currency is different  from 
the currency used for tax purposes as income tax expense.

(n)Stock-based payment transactions

Stock-based compensation
The Company applies the fair value method to all grants of stock options.  The 
fair value  of options  granted is  estimated at  the date  of grant  using  a 
Black-Scholes  option  pricing   model  incorporating  assumptions   regarding 
risk-free interest rates,  dividend yield, volatility  factor of the  expected 
market price of the Company's stock,  and a weighted average expected life  of 
the options. When option awards vest in installments over the vesting  period, 
each installment is  accounted for  as a separate  arrangement. The  estimated 
fair value of the options is recorded as an expense with an offsetting  credit 
to shareholders' equity. Any consideration received on amounts attributable to
stock options is credited to share capital.

Restricted and Deferred Share UnitPlans
The Restricted and Deferred Share Unit ("RSU" and "DSU") Plans are full  value 
phantom shares  that  mirror  the  value  of  Dominion  Diamond  Corporation's 
publicly  traded  common  shares.  Grants  under   the  RSU  Plan  are  on   a 
discretionary basis to employees of the Company subject to Board of  Directors 
approval. Under  the  prior  RSU Plan,  each  RSU  grant vests  on  the  third 
anniversary of the grant date. Under the  2010 RSU Plan, each RSU grant  vests 
equally over a three-year period. Vesting  under both RSU Plans is subject  to 
special rules for death,  disability and change in  control. Grants under  the 
DSU Plan are awarded to non-executive directors of the Company. Each DSU grant
vests immediately on the grant date. The expenses related to the RSUs and DSUs
are accrued based  on fair value.  When a share-based  payment award vests  in 
installments over the vesting period, each  installment is accounted for as  a 
separate arrangement. These awards are  accounted for as liabilities with  the 
value of these liabilities being re-measured  at each reporting date based  on 
changes in the fair value of the  awards, and at settlement date. Any  changes 
in the fair  value of the  liability are recognized  as employee benefit  plan 
expense in net profit or loss.

(o)Employee pension plans
The Company operates various pension plans. The plans are generally funded
through payments to insurance companies or trustee-administered funds
determined by periodic actuarial calculations. The Company has both defined
benefit and defined contribution plans.

A defined contribution plan  is a pension plan  under which the employer  pays 
fixed contributions into a separate entity  or fund in respect of each  member 
of the plan. These contributions  are expensed as incurred. Unless  otherwise 
provided in the plan documentation, the employer has no legal or  constructive 
obligation to pay any further contributions.  The benefits each member of  the 
plan will receive are based solely  on the amount contributed to the  member's 
account and any income, expenses, gains and losses attributed to the  member's 
account.

A defined benefit plan is a pension  plan that guarantees a defined amount  of 
pension benefit that an employee will receive on retirement, usually dependent
on one or more factors  such as age, years  of service and compensation.  The 
liability recognized  in  the balance  sheet  in respect  of  defined  benefit 
pension plans is the  present value of the  defined benefit obligation at  the 
end of the reporting period  less the fair value  of plan assets. The  defined 
benefit obligation is calculated annually  by independent actuaries using  the 
projected unit  credit  method. The  present  value of  the  defined  benefit 
obligation is determined  by discounting  the estimated  future cash  outflows 
using interest rates on high quality  corporate bonds that are denominated  in 
the currency  in which  the benefits  will be  paid, and  that have  terms  to 
maturity approximating the terms of the related pension obligation.

Actuarial gains and losses arising from experience adjustments and changes  in 
actuarial assumptions are charged or credited to equity in other comprehensive
income in the period in which  they arise. Past service costs are  recognized 
immediately in income.

(p)Operating leases
Minimum  rent  payments  under  operating  leases,  including  any   rent-free 
periodsand/or construction  allowances,  are recognized  on  a  straight-line 
basis over the term of the lease and included in net profit or loss.

(q)Impairment of non-financial assets
The carrying amounts of the Company's non-financial assets other than
inventory and deferred taxes are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists,
then the asset's recoverable amount is estimated.

The recoverable amount of an asset is the greater of its fair value less costs
of disposal and its value in use. In the absence of a binding sales agreement,
fair value is estimated on the basis of values obtained from an active  market 
or from recent transactions or on the basis of the best information  available 
that reflects the amount  that the Company could  obtain from the disposal  of 
the asset. Value in use is defined as the present value of future pre-tax cash
flows expected  to be  derived  from the  use of  an  asset, using  a  pre-tax 
discount rate that reflects  current market assessments of  the time value  of 
money and  the risks  specific to  the asset.  For the  purpose of  impairment 
testing, assets are grouped  together into the smallest  group of assets  that 
generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the "cash-generating unit").

An impairment loss is  recognized if the  carrying amount of  an asset or  its 
cash-generating unit  exceeds  its estimated  recoverable  amount.  Impairment 
losses are recognized in the consolidated statement of income in those expense
categories consistent  with the  function of  the impaired  asset.  Impairment 
losses recognized in respect of cash-generating units would be allocated first
to reduce goodwill and then  to reduce the carrying  amounts of the assets  in 
the unit (group of units) on a pro rata basis.

For property, plant  and equipment, an  assessment is made  at each  reporting 
date as  to  whether  there  is  any  indication  that  previously  recognized 
impairment losses  may  no  longer  exist  or  may  have  decreased.  If  such 
indication exists, the Company makes an estimate of the recoverable amount.  A 
previously recognized impairment  loss is reversed  only if there  has been  a 
change in the estimates used to determine the asset's recoverable amount since
the last impairment  loss was recognized.  If this is  the case, the  carrying 
amount of the  asset is  increased to  its recoverable  amount. The  increased 
amount cannot exceed the carrying amount that would have been determined,  net 
of depreciation, had no impairment loss been recognized for the asset in prior
years. Such reversal is recognized in the consolidated statement of income.

(r)Basic and diluted earnings per share
Basic earnings per share are calculated by dividing net profit or loss by the
weighted average number of shares outstanding during the period. Diluted
earnings per share are determined using the treasury stock method to calculate
the dilutive effect of options and warrants. The treasury stock method assumes
that the exercise of any "in-the-money" options with the option proceeds would
be used to purchase common shares at the average market value for the period.
Options with an exercise price higher than the average market value for the
period are not included in the calculation of diluted earnings per share as
such options are not dilutive.

(s)Use of estimates, judgments and assumptions
The preparation of the consolidated financial statements in conformity with
IFRS requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of
assets and liabilities and contingent liabilities at the date of the
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. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the most significant
effect on the amounts recognized in the consolidated financial statements is
as follows:

a.Significant Judgments in Applying Accounting Policies

Recovery of deferred tax assets
Judgment is required in determining whether deferred tax assets are recognized
in the  consolidated  balance  sheet. Deferred  tax  assets,  including  those 
arising from unused tax  losses, require management  to assess the  likelihood 
that the Company will generate taxable earnings in future periods in order  to 
utilize recognized deferred tax assets. Estimates of future taxable income are
based on forecasted income from operations and the application of existing tax
laws in each jurisdiction.  To the extent that  future taxable income  differs 
significantly from  estimates,  the ability  of  the Company  to  realize  the 
deferred tax assets recorded at the  consolidated balance sheet date could  be 
impacted. Additionally, future  changes in  tax laws in  the jurisdictions  in 
which the Company operates  could limit the ability  of the Company to  obtain 
tax deductions in future periods.

Commitments and contingencies
The Company has conducted its operations in the ordinary course of business in
accordance  with  its  understanding  and  interpretation  of  applicable  tax 
legislation in the countries  where the Company  has operations. The  relevant 
tax authorities could have a different  interpretation of those tax laws  that 
could lead to  contingencies or  additional liabilities for  the Company.  The 
Company believes that its  tax filing positions as  at the balance sheet  date 
are appropriate and supportable. Should the ultimate tax liability  materially 
differ from the provision, the Company's effective tax rate and its profit  or 
loss could be  affected positively or  negatively in the  period in which  the 
matters are resolved.

b.Significant Estimates and Assumptions in Applying Accounting Policies

Mineral reserves, mineral properties and exploration costs
The estimation  of  mineral reserves  is  a subjective  process.  The  Company 
estimates  its  mineral   reserves  based  on   information  compiled  by   an 
appropriately qualified  person.  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. Reserve estimates can be revised upward
or downward based  on the results  of additional future  drilling, testing  or 
production levels, anddiamond prices. Changes in reserve estimates may impact
the carrying value of exploration  and evaluation assets, mineral  properties, 
property, plant  and  equipment,  mine  rehabilitation  and  site  restoration 
provisions, recognition  of deferred  tax  assets, and  depreciation  charges. 
Estimates and assumptions about future events and circumstances are also  used 
to determine  whether economically  viable  reserves exist  that can  lead  to 
commercial development of an ore body.

Estimated mineral  reserves  are  used  in  determining  the  depreciation  of 
mine-specific assets. This  results in a  depreciation charge proportional  to 
the depletion  of  the  anticipated  remaining  life  of  mine  production.  A 
units-of-production depreciation  method  is  applied, and  depending  on  the 
asset, is based on carats of diamonds recovered during the period relative  to 
the estimated proven and probable reserves  of the ore deposit being mined  or 
to  the  total   ore  deposit.   Changes  in  estimates   are  accounted   for 
prospectively.

Impairment of long-lived assets
The Company assesses each cash-generating unit at least annually to  determine 
whether any indication of impairment exists. Where an indicator of  impairment 
exists, a  formal  estimate  of  the recoverable  amount  is  made,  which  is 
considered to be the higher of the fair  value of an asset less costs to  sell 
and its  value in  use. These  assessments require  the use  of estimates  and 
assumptions such as long-term commodity prices, discount rates, future capital
requirements,  exploration  potential  and  operating  performance.  Financial 
results as determined by actual events could differ from those estimated.

Mine rehabilitation and site restoration provision
Provision for the cost  of site closure and  reclamation is recognized at  the 
time  that  the  environmental  disturbance   occurs.  When  the  extent   of 
disturbance increases  over  the  life  of the  operation,  the  provision  is 
increased  accordingly.  Costs  included   in  the  provision  encompass   all 
restoration and rehabilitation activities expected to occur progressively over
the life of the operation and at the time of closure. Routine operating costs
that may impact the ultimate  restoration and rehabilitation activities,  such 
as waste  material handling  conducted as  an  integral part  of a  mining  or 
production process, are  not included  in the provision.  Costs arising  from 
unforeseen  circumstances,   such  as   contamination  caused   by   unplanned 
discharges, are recognized as  an expense and liability  when the event  gives 
rise to an obligation which is probable and capable of reliable estimation.

The site closure and reclamation provision  is measured at the expected  value 
of future cash  flows and  is discounted  to its  present value.  Significant 
judgments and estimates are  involved in forming  expectations of future  site 
closure and reclamation activities and the amount and timing of the associated
cash flows. Those expectations are formed based on existing environmental and
regulatory requirements.  The  Ekati  Diamond Mine  rehabilitation  and  site 
restoration provision is prepared by management at the Ekati Diamond Mine.

The Diavik Diamond  Mine rehabilitation and  site restoration provisions  have 
been provided  by management  of the  Diavik  Diamond Mine  and are  based  on 
internal estimates. Assumptions,  based on the  current economic  environment, 
have been made  which DDMI  management believes  are a  reasonable basis  upon 
which to estimate the future liability. These estimates are reviewed regularly
by management of  the Diavik Diamond  Mine to take  into account any  material 
changes  to  the  assumptions.  However,  actual  rehabilitation  costs   will 
ultimately depend upon  future costs  for the  necessary decommissioning  work 
required,  which  will  reflect  market  conditions  at  the  relevant   time. 
Furthermore, the timing  of rehabilitation  is likely  to depend  on when  the 
Diavik Diamond Mine ceases to produce  at economically viable rates. This,  in 
turn, will depend upon  a number of factors  including future diamond  prices, 
which are inherently uncertain.

Pension benefits
The present value of  the pension obligations depends  on a number of  factors 
that are determined on an actuarial  basis using a number of assumptions.  The 
assumptions used in determining the net cost (income) for pensions include the
discount rate.  Any changes  in these  assumptions will  impact the  carrying 
amount of the pension obligation.

The Company determines the appropriate discount rate at the end of each year.
This is the interest rate that should  be used to determine the present  value 
of estimated  future cash  outflows  expected to  be  required to  settle  the 
pension obligations.  In  determining  the  appropriate  discount  rate,  the 
Company considers the interest rates of high quality corporate bonds that  are 
denominated in the currency in which the  benefits will be paid and that  have 
terms to maturity approximating the terms of the related pension obligation.

Other key assumptions  for pension obligations  are based in  part on  current 
market conditions. Additional information is disclosed in note 15.

(t)New Accounting Standards adopted during the year 
The Company has adopted the following new standards, along with any
consequential amendments, effective February 1, 2013. These changes were made
in accordance with the applicable transitional provisions.

IFRS  10,  "Consolidated  Financial  Statements"  ("IFRS  10"),  replaced  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. The Company has  conducted a review of  all non-wholly owned  entities 
and determined that the adoption  of IFRS 10 did not  result in any change  in 
the consolidated status of any of its subsidiaries and investees.

IFRS 11, "Joint Arrangements" ("IFRS 11"), replaced 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 consolidated  financial statements upon  its 
adoption on February 1, 2013.

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  Company 
has added additional disclosures on fair value measurement in note 25.

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. The adoption of IFRIC 20 did
not have a material impact on the Company's consolidated financial statements.

Amendments to IAS  19, "Employee  Benefits" ("IAS 19"),  which 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. The adoption of revised IAS 19 did not  materially 
impact  measurement  or  recognition  of  the  Company's  pension  plans,  and 
additional disclosures required under the new  standard which can be found  in 
note 15.

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 
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.

(u)Standards issued but not yet effective 
Standards issued but not yet effective up to the date of issuance of the
consolidated financial statements are listed below. The listing is of
standards and interpretations issued, which the Company reasonably expects to
be applicable at a future date. The Company intends to adopt those standards
when they become effective.

IFRS 9 - Financial Instruments
In November 2009, the  IASB issued IFRS 9  Financial Instruments as the  first 
step in its project to replace  IAS 39 Financial Instruments: Recognition  and 
Measurement. IFRS 9 retains  but simplifies the  mixed measurement model  and 
establishes two primary measurement categories for financial assets: amortized
cost and  fair value.  The  basis of  classification  depends on  an  entity's 
business model  and  the  contractual  cash flows  of  the  financial  asset. 
Classification  is  made  at  the  time  the  financial  asset  is   initially 
recognized, namely  when  the  entity  becomes  a  party  to  the  contractual 
provisions of the instrument. Requirements for classification and measurement
of financial liabilities were added in  October 2010 and they largely  carried 
forward existing requirements in IAS 39, except that fair value changes due to
an entity's own credit risk for  liabilities designated at fair value  through 
profit or loss would generally be recorded in other comprehensive income (OCI)
rather than the statement of income. In November 2013, IFRS 9 was amended  to 
include guidance on hedge accounting.

The IASB has  tentatively decided to  require an  entity to apply  IFRS 9  for 
annual periods beginning on or after January 1, 2018, however, early  adoption 
of the new standard is still permitted. The Company is currently assessing the
impact of the standard on its consolidated financial statements.

IAS 32 - Offsetting Financial Assets and Liabilities
The amendments to IAS 32 clarify that an entity currently has a legally
enforceable right to set-off if that right is:

  *not contingent on a future event; and
  *enforceable both in the normal course of business and in the event of
    default, insolvency or bankruptcy of the entity and all counterparties.

The amendments to IAS 32 also clarify when a settlement mechanism provides for
net settlement or gross settlement that is equivalent to net settlement.  The 
effective date for the amendments to IAS 32 is annual periods beginning on  or 
after January 1, 2014. These amendments are to be applied retrospectively.

The Company  intends  to adopt  the  amendments to  IAS  32 in  its  financial 
statements for the annual period beginning February 1, 2014. The Company  does 
not expect that the amendments will have a material impact on the consolidated
financial statements.

IFRIC 21 - Levies
In May 2013, the IASB issued International Financial Reporting Interpretations
Committee (IFRIC) 21, Levies. IFRIC 21 is effective for annual periods
beginning on or after January 1, 2014 and is to be applied retrospectively.
IFRIC 21 provides guidance on accounting for levies in accordance with IAS 37,
Provisions, Contingent Liabilities and Contingent Assets. The interpretation
defines a levy as an outflow from an entity imposed by a government in
accordance with legislation and confirms that an entity recognizes a liability
for a levy only when the triggering event specified in the legislation occurs.
The Company intends to adopt IFRIC 21 in its financial statements for the
annual period beginning February 1, 2014. The impact to the Company's
consolidated financial statements upon adoption of this standard has not yet
been determined.

Note 4:
Acquisition

On April 10,  2013, the Company  completed the 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.

The 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  purchase  price  allocation  at 
acquisition has been revised to reflect final adjustments to fair values  made 
during the fourth quarter.

                                                     
                       Preliminary                    
                                   fair                             Final fair
                              values at                              values at
                              April 10,               Further        April 10,
                                   2013           adjustments             2013
Cash consideration     $     553,142   $                 $
paid                                                        -          553,142
Cash and cash          $      62,217   $                 $
equivalents                                                 -           62,217
Accounts receivable           7,465                    
and other current
assets                                                (1,376)            6,089
Inventory and               300,248                    
supplies                                               30,967          331,215
Other long-term                   -                    
assets                                                  1,776            1,776
Property, plant and         800,741                    
equipment                                               6,666          807,407
Trade and other            (70,618)                    
payables                                                (548)         (71,166)
Income taxes                (6,085)                    
payable                                                12,328            6,243
Provisions, future        (348,230)                    
site restoration
costs                                                   4,729        (343,501)
Deferred income tax        (62,985)                    
liabilities                                           (2,528)         (65,513)
Other long-term            (19,017)                    
liabilities                                              (20)         (19,037)
Non-controlling           (152,798)                    
interest                                             (10,978)        (163,776)
Total net                   510,938                    
identifiable assets
acquired                                               41,016          551,954
Goodwill (note 13)           42,204         (41,016)         1,188
                      $     553,142   $             -   $    553,142

The main adjustments to  the provisional fair value  relate to the fair  value 
attributed to property, plant and  equipment, stockpile ore and provision  for 
future site  restoration costs  acquired as  part of  the Ekati  Diamond  Mine 
Acquisition and the associated tax impacts.

Non-controlling interest was measured by taking the proportionate share of the
fair value of the  net assets of the  Ekati Diamond Mine. Goodwill  comprises 
the  value  of  expected  synergies  arising  from  the  Ekati  Diamond   Mine 
Acquisition and  the  expertise  and reputation  of  the  assembled  workforce 
acquired. None of the goodwill recognized is expected to be deductible for tax
purposes.

From the  closing date  of the  Ekati Diamond  Mine Acquisition,  revenues  of 
$399.6 million  and  a  net  loss  of $40.8  million  were  generated  by  the 
operations of the Ekati  Diamond Mine. If the  acquisition had taken place  at 
the beginning of the  2014 fiscal year, the  Company's consolidated pro  forma 
revenue including the Ekati mining segment would have been $860.6 million  and 
pro forma net loss would  have been $43.7 million  for the year ended  January 
31, 2014.  The  Company incurred  total  transaction costs  of  $14.4  million 
related to the Ekati Diamond Mine Acquisition, of which $11.2 million has been
expensed and included in selling, general and administrative costs during  the 
current year, with the balance of $3.2 million expensed in fiscal 2013.

Note 5:
Cash and Cash Equivalents

                                               2014        2013
Cash on hand and balances with             $  224,778   $  104,313
banks
Restricted cash                              113,612           -
Total cash and cash equivalents            $  338,390   $  104,313

Note 6:
Accounts Receivable

                                               2014       2013
Trade receivables                           $     451   $     239
Accounts receivable - minority                 9,158          -
partners
Sales tax credits                              7,622        546
Other                                          3,648      2,920
Total accounts receivable                   $  20,879   $   3,705

The Company's exposure to credit risk is disclosed in note 25.

Note 7:
Inventory and Supplies

                                               2014        2013
Stockpile ore                              $   38,475   $        -
Rough diamonds - Work in progress            139,520      29,343
Rough diamonds - Available for                35,573      16,124
sale
Supplies inventory                           227,285      70,160
Total inventory and supplies               $  440,853   $  115,627

Total inventory and supplies  is net of a  provision for obsolescence of  $0.6 
million ($0.4 million  at January  31, 2013).  Cost of  sales from  continuing 
operations includes inventory of $645.8 million  sold during the year (2013  - 
$262.7 million), with another  $5.1 million of  non-inventoried costs (2013  - 
$4.9 million).

Note 8:
Other Current Assets

                                        2014       2013
Prepaid assets                       $  27,156   $  29,486
Total other current assets           $  27,156   $  29,486

Note 9:
Restricted Cash

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

Note 10:
Assets Held for Sale (Discontinued Operations)

On March 26, 2013, the Company completed the sale of the Luxury Brand  Segment 
to Swatch Group.

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                                 (13,743)
Net assets                                           $        243,825
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  consolidated statements  of income,  and 
comparative periods have been adjusted accordingly.

                                                  2014         2013
Sales                                        $    63,799   $   435,835
Cost of sales                                  (31,355)    (208,574)
Other expenses                                 (30,964)    (212,562)
Other income and foreign exchange gain          (1,551)        1,888
(loss)
Net income tax (expense) recovery                 (186)      (4,153)
Net profit (loss) from discontinued          $     (257)   $    12,434
operations before gain
Gain on sale                                 $   502,913   $         -
Net profit from discontinued operations      $   502,656   $    12,434
Earnings per share - discontinued                                 
operations
 Basic                                       $      5.91   $      0.15
 Diluted                                        5.85         0.15

Note 11:
Property, Plant and Equipment

MINING OPERATIONS                                                                                                                          
                                                                                             Real                                Mine  
                                                         Equipment          Furniture,          property -              Assets      rehabilitation
                                       Mineral                 and           equipment            land and               under            and site
                                properties^(a)      leaseholds^(b)       and other^(c)        building^(d)        construction     restoration^(e)         Total
Cost:                                                                                                                                      
Balance at February 1,      $                  $                  $                  $          40,194  $                  $          64,839  $
2013                                   249,720             899,595              11,664                                  15,302                         1,281,314
Acquisition (Note 4)                                                                       186,802                       
                                        70,000             405,796               1,007                                 143,802                   -       807,407
Additions                                                                     1,258                               (926)  
                                             -               2,632               1,077                                 119,750                           123,791
Disposals                                                                   
                                             -             (4,460)               (326)                   -                   -                   -       (4,786)
Foreign exchange                              (3,108)        
differences                                  -                   -                   -                                       -                   -       (3,108)
Pre-production revenue                                       
                                      (11,114)                   -                   -                   -                   -                   -      (11,114)
Transfers and other                                                                            511                       
movements                               40,868              67,768               (277)                               (108,870)                   -             -
Balance at January 31,      $                  $                  $                  $         225,657  $                  $          63,913  $
2014                                   349,474           1,371,331              13,145                                 169,984                         2,139,504
Accumulated                                                                                                                           
depreciation/amortization:                                                                                                                                 
Balance at February 1,      $                  $                  $                  $          10,880  $   $          23,328  $
2013                                   173,493             339,343               6,781                                       -                           553,825
Depreciation and                                                                            25,811                5,060  
amortization for the year                9,284             131,552               1,689                                       -                           173,396
Disposals                                                                         -        
                                             -             (2,300)               (210)                                       -                   -       (2,510)
Foreign exchange                                (764)        
differences                                  -                   -                   -                                       -                   -         (764)
Balance at January 31,      $                  $                  $                  $          35,927  $                  $          28,388  $
2014                                   182,777             468,595               8,260                                       -                           723,947
Net book value at January   $                  $                  $                  $         189,730  $                  $          35,525  $
31, 2014                               166,697             902,736               4,885                                 169,984                         1,469,557
                                                                                                                                          
                                                                                                                                          
                                                                                             Real                                Mine  
                                                         Equipment          Furniture,          property -              Assets      rehabilitation
                                       Mineral                 and           equipment            land and               under            and site
                                properties^(a)      leaseholds^(b)       and other^(c)        building^(d)        construction     restoration^(e)         Total
Cost:                                                                                                                                      
Balance at February 1,      $                  $                  $                  $       37,577  $                  $    53,471  $
2012                                   249,527             855,213        9,306                               23,174                         1,228,268
Additions                                                                     2,460                              11,368  
                                           327                   -               2,509                                  51,181                            67,845
Disposals                                                                   
                                             -            (14,805)               (151)                   -                   -                   -      (14,956)
Foreign exchange                                  157        
differences                                  -                   -                   -                                       -                   -           157
Transfers and other                                                               -                       
movements                                (134)              59,187                   -                                (59,053)                   -             -
Balance at January 31,      $                  $                  $                  $          40,194  $                  $          64,839  $
2013                                   249,720             899,595              11,664                                  15,302                         1,281,314
Accumulated                                                                                                                           
depreciation/amortization:                                                                                                                                 
Balance at February 1,      $                  $                  $                  $       9,335  $                  $          19,446  $
2012                               162,068             297,245        6,028                             -                           494,122
Depreciation and                                                                             1,578                3,882  
amortization for the year               11,425              54,502                 904                                       -                            72,291
Disposals                                                                   
                                             -            (12,403)               (151)                   -                   -                   -      (12,554)
Foreign exchange                                 (34)        
differences                                  -                   -                   -                                       -                   -          (34)
Balance at January 31,      $                  $                  $                  $          10,879  $                  $          23,328  $
2013                                   173,493             339,344               6,781                                       -                           553,825
Net book value at January   $                  $                  $                  $          29,315  $                  $          41,511  $
31, 2013                                76,227             560,251       4,883                                  15,302                           727,489

The Company has expensed $14.6 million in exploration expenditures in the
current year (2013: $1.8 million).

^(a) Represents the Company's ownership share of mineral claims, which
      contains commercially mineable diamond reserves.
^(b) Equipment and leaseholds are project related assets at the Diavik Joint
      Venture and Ekati Diamond Mine level.
^(c) Furniture, equipment and other includes equipment located at the
      Company's diamond sorting facility.
^(d) Real property is comprised of land and a building that houses the
      corporate activities of the Company, and various betterments to the
      corporate offices.
^(e) Both the Diavik Joint Venture and the Ekati Diamond Mine have an
      obligations under various agreements (note 17) to reclaim and restore
      the lands disturbed
      by its mining operations.

Note 12:
Diavik Joint Venture

The following represents DDDLP's 40% interest in the net assets and operations
of the Diavik Joint  Venture as at  December 31, 2013  and December 31,  2012, 
which represents the financial year end of the Diavik Joint Venture:

                                                     2013         2012
Current assets                                  $    97,078   $   102,299
Non-current assets                                 618,141      677,808
Current liabilities                                 31,296       30,517
Non-current liabilities and participant's          683,923   
account                                                                749,590
                                                                    
                                                                    
                                                     2013         2012
Expenses net of interest income of $nil                         
(2012 - $0.1 million)^(a)                       $   253,592     $   243,796
Cash flows used in operating activities          (162,535)    (164,645)
Cash flows resulting from financing                182,841   
activities                                                             214,061
Cash flows used in investing activities           (22,300)     (50,925)
^(a)The Joint Venture only earns interest                   
income.

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 23.

Note 13:
Other Non-Current Assets

                                                 2014       2013
Prepaid pricing discount^(a), net of                         
accumulated amortization of $nil (2013
- $11.7million)                                   $         -     $       240
Prepaid assets                                     418          -
Other assets                                     1,524      6,279
Security deposits                                1,607        418
                                             $   3,549   $   6,937

^(a) Prepaid pricing discount represents funds paid to Tiffany & Co. by the
      Company to amend its rough diamond supply
      agreement. The amendment eliminated all pricing discounts on future
      sales. The payment was deferred and was
      being amortized on a straight-line basis over the remaining life of the
      contract. The contract expired on
      March 31, 2013.

Note 14:
Trade and Other Payables

                                      2014       2013
Trade and other payables           $  69,373   $  31,622
Accrued expenses                     33,693      6,647
Customer deposits                       587        784
                                  $ 103,653   $  39,053

Note 15:
Employee Benefit Plans

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

                                               2014       2013
Defined benefit plan obligation -           $  10,990   $       -
Ekati Diamond Mine (a)
Defined contribution plan                        300          -
obligation - Ekati Diamond Mine (b)
Post-retirement benefit plan -                   746        699
Diavik Diamond Mine (c)
RSU and DSU plans (d)                          5,727      5,434
Total employee benefit plan                 $  17,763   $   6,133
obligation
                                                        
                                               2014       2013
Non-current                                 $  14,120   $   3,499
Current                                        3,643      2,634
Total employee benefit plan                 $  17,763   $   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 June30, 2004.

(i) NET BENEFIT OBLIGATION:

                                       January 31,
                                                          2014
Accrued benefit obligation             $      76,670
Plan assets                                  65,680
Funded status - plan deficit           $      10,990

As at the last valuation date, the present value of the defined benefit
obligation was comprised of approximately $64.2 million relating to active
employees, $6.8 million relating to deferred members and $5.7 million relating
to retired members.

                                                           2014
Defined benefit obligation at April 10, 2013           $   87,483
Service cost                                               4,094
Interest expense                                           2,719
Benefit payments                                         (6,627)
Administrative expense                                      (95)
Remeasurements                                           (8,438)
Effect on changes in foreign exchange rates              (2,466)
Defined benefit obligation as at January 31, 2014      $   76,670

(ii) PLAN ASSETS

                                                                 2014
Plan Assets at April 10, 2013                                $   68,721
Interest Income                                                  2,205
Total employer contributions                                     6,859
Benefit payments                                               (6,627)
Taxes paid from plan assets                                       (95)
Return on plan assets, excluded imputed interest income        (3,238)
Effect on changes in foreign exchange rates                    (2,145)
Plan assets as at January 31, 2014                           $   65,680

The amounts recognized in the statement of income are as follows:

                                             2014
Current service costs                     $   4,094
Interest costs                                 514
Total, included in costs of sales         $   4,608

The actuarial losses/(gains) recognized  in other comprehensive  income/(loss) 
net of taxes for defined benefit plans were as follows:

                                                                     2014
Return on plan assets, excluding imputed interest income         $    3,238
Actuarial losses from change in demographic assumptions              2,791
Actuarial gains from change in financial assumptions              (11,229)
Total net actuarial loss recognized in other comprehensive       $  (5,200)
loss before income taxes
Income tax expenses on actuarial (gains)/losses                      1,457
Actuarial (gains)/losses net of income tax recoveries            $    3,743

Canadian plan assets  represented approximately  95% of total  plan assets  at 
January 31, 2014.

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

                                 January 31,
                                                   2014
ASSET CATEGORY                              
Cash equivalents                           2%
Equity securities                         22%
Fixed income securities                   70%
Other                                      6%
Total                                    100%

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

                                                   January 31, 2014
ACCRUED BENEFIT OBLIGATION                                         
Discount rate                                                   4.4%
Rate of salary increase                                         3.0%
Rate of price inflation                                        2.25%
Mortality table                           CPM-RPP2014Priv with CPM-A
BENEFIT COSTS FOR THE YEAR                                         
Discount rate                                                   4.0%
Expected rate of salary                                         4.0%
increase
Rate of compensation increase                                  2.25%

The weighted average duration of the  defined benefit obligation is 17  years. 
The sensitivity of the defined benefit  obligation to changes in the  weighted 
principal assumption is:

IMPACT ON DEFINED          Changes in    Decrease in    Increase in
BENEFIT OBLIGATION              Assumption        Assumption        Assumption
Discount Rate                   0.50%   $       7,522   $     (5,801)
Salary growth rate              0.50%        (1,523)          2,080
Mortality table                  Life        (2,054)          1,937
                              expectancy 1

The above sensitivity  analysis is based  on a change  in an assumption  while 
holding all  other assumptions  constant. In  practice, this  is unlikely  to 
occur, and changes in some of the assumptions may be correlated.

(iv)RISK ANALYSIS
Through its defined benefit pension plan, the Company is exposed to a number
of risks, the most significant of which are detailed below:

Asset volatility
The plan liabilities are calculated using a discount rate set with  references 
to corporate  bond yields;  if the  plan underperforms  the yield,  this  will 
create a deficit.

Changes in bond yields
A decrease in corporate bond  yields will increase plan liabilities,  although 
this would likely  be partially  offset by  an increase  in the  value of  the 
plan's bond holdings.

Inflation risk
Most of the plan's  obligations are linked to  inflation and higher  inflation 
will lead to higher liabilities (although, in most cases, caps on the level of
inflationary increases  are  in place  to  protect the  plan  against  extreme 
inflation). The majority of the plan's assets are either unaffected by (fixed
interest bonds) or loosely correlated with (equities) inflation, meaning  that 
an increase in inflation will also increase the deficit.

Life expectancy
The majority of the plan's obligations are to provide benefit for the life  of 
the member  and the  member's spouse,  so increases  in life  expectancy  will 
result in an increase in the plan's liabilities.

(v) FUNDING POLICY
The Company funds the plan in accordance with the requirements of the  Pension 
Benefits Standards Act,  1985 and the  Pension Benefits Standards  Regulations 
and the actuarial professional standards with respect to funding such  plans. 
Funding deficits are  amortized as  permitted under the  Regulations. In  the 
Company's view, this level of funding  is adequate to meet current and  future 
funding needs in light of projected economic and demographic conditions.  The 
Company may  in its  absolute  discretion fund  in  excess of  the  legislated 
minimum from time to time, but no more than the maximum contribution permitted
under the Income Tax Act.

The expected contributions to the plan for fiscal year 2015 are $6.0 million.

(b)Defined contribution plan
Dominion Diamond Corporation sponsors a defined contribution plan for Canadian
employees who are not employed by Dominion Diamond Ekati Corporation 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 January 31, 2014 was $nil ($nil at January 31,
2013).

Dominion Diamond Ekati  Corporation sponsors a  defined contribution plan  for 
its employees who are not members of the defined benefit pension plan referred
to in 15(a) above. The employer contributes 8% of earnings up to 2.5 times the
Year's Maximum  Pensionable Earnings  ( "YMPE":  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  January   31,  2014   was  $0.3   million. 
(Supplemental  plan  liability  has  been  included  in  the  accrued  benefit 
obligation disclosed in 15(a) above.)

(c)Post-retirement benefit plan
The Diavik Joint Venture sponsors a defined contribution plan whereby
theemployer contributes 6% of the employee's salary.

The Diavik  Joint Venture  provides  non-pension post-retirement  benefits  to 
retired employees. The post-retirement benefit plan liability was $0.8 million
at January 31, 2014 ($0.7 million at January 31, 2013).

(d)Restricted Stock Units ("RSU") and Deferred Stock Units ("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 following the date of the grant and
one-third on each anniversary thereafter. The vesting of grants of RSUs are
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 16:
Income Taxes

The deferred income tax asset of the Company is $3.1 million. Included in  the 
deferred tax asset  is $2.0 million  that has been  recorded to recognize  the 
benefit of $7.7 million of net operating losses that the Company has available
for carry forward to shelter income taxes for future years.

The deferred  income tax  liability  of the  Company  is $242.6  million.  The 
Company's deferred income  tax asset  and liability accounts  are revalued  to 
take into consideration  the change  in the  Canadian dollar  compared to  the 
USdollar and the unrealized foreign exchange gain or loss is recorded as part
of deferred tax expenses for each year.

(a) The income tax provision consists of the following:

                                                  2014        2013
CURRENT TAX EXPENSE FROM CONTINUING                              
OPERATIONS
Current period                                $   36,530   $   25,172
Adjustment for prior periods                      3,869       (144)
Total current tax expense                        40,399      25,028
DEFERRED TAX EXPENSE FROM CONTINUING                             
OPERATIONS
Origination and reversal of temporary           (4,889)     (9,718)
differences
Change in unrecognized deductible                  (39)        (36)
temporary differences
Current year losses for which no                     34           2
deferred tax asset was recognized
Total deferred tax expense                      (4,894)     (9,752)
Total income tax expense from continuing      $   35,505   $   15,276
operations

Tax expense from continuing operations excludes tax expense from  discontinued 
operations of $0.2 million (2013 - $4.2 million).

(b) The tax  effects of temporary  differences that give  rise to  significant 
portions of the deferred  tax assets and liabilities  at January 31, 2014  and 
2013 are as follows:

                                                   2014         2013
DEFERRED INCOME TAX ASSETS:                                        
Net operating loss carryforwards              $     2,043   $       331
Property, plant and equipment                        799          116
Future site restoration costs                    120,739       13,329
Deferred mineral property costs                    5,215          240
Other deferred income tax assets                  27,293       12,861
                                                156,089       26,877
Reclassification to deferred income tax        (153,011)     (22,782)
liabilities
Deferred income tax assets                         3,078        4,095
DEFERRED INCOME TAX LIABILITIES:                                   
Deferred mineral property costs                 (49,706)     (27,459)
Property, plant and equipment                  (320,485)    (157,683)
Other deferred income tax liabilities           (25,383)     (19,067)
                                              (395,574)    (204,209)
Reclassification from deferred income            153,011       22,782
tax assets
Deferred income tax liabilities                (242,563)    (181,427)
Deferred income tax liabilities, net          $ (239,485)   $ (177,332)

Movement in net deferred tax liabilities:

                                                   2014         2013
Balance at the beginning of the year          $ (177,332)   $ (242,080)
Reclassification to assets held for sale               -       50,181
Recognized in profit (loss)                        4,894        9,752
Reclassification to current income taxes              -        4,815
payable
Recognized in OCI                                (1,457)            -
Acquired on business combination                (65,513)            -
Other                                               (77)            -
Balance at the end of the year                $ (239,485)   $ (177,332)

(c) Unrecognized deferred tax assets and liabilities:

Deferred tax  assets have  not been  recognized in  respect of  the  following 
items:

                                           2014      2013
Tax losses                               $    568   $    548
Deductible temporary differences             177       265
Total                                    $    745   $    813

The tax losses not recognized expire as per the amount and years noted  below. 
The  deductible  temporary  differences  do  not  expire  under  current   tax 
legislation. Deferred tax assets have not been recognized in respect of  these 
items because it is not probable that future taxable profit will be  available 
against which the Company can utilize the benefits therefrom.

The following table summarizes the Company's non-capital losses as at  January 
31, 2014 that may be applied against future taxable profit:

Jurisdiction      Type                  Amount         Expiry
                                                                          Date
Luxembourg        Net operating       $   1,947      No expiry
                       losses

The taxable temporary differences associated with investments in  subsidiaries 
and joint ventures, for which a deferred tax liability has not been  provided, 
aggregate to $295.4 million (2013 - deductible temporary differences of  $60.0 
million).

(d) The difference between the amount of the reported consolidated income  tax 
provision and the amount  computed by multiplying  the earnings (loss)  before 
income taxes by the statutory tax rate of 26.5% (2013 - 26.5%) is a result  of 
the following:

                                                  2014        2013
Expected income tax expense from               $   1,065   $   10,080
continuing operations
Non-deductible (non-taxable) items                3,184       1,208
Impact of foreign exchange                       20,655         659
Northwest Territories mining royalty (net         8,519       4,637
of income tax relief)
Earnings subject to tax different than              576          70
statutory rate
Assessments and adjustments                         664     (1,386)
Current year losses for which no deferred            34           2
tax asset was recognized
Tax effect on income allocated to                 1,389          -
non-controlling interest
Change in unrecognized temporary                   (39)        (36)
differences
Other                                             (542)          42
Recorded income tax expense from               $  35,505   $   15,276
continuing operations

(e) The Company has net operating  loss carryforwards for Canadian income  tax 
purposes of  approximately $7.7million  and $1.9  million for  other  foreign 
jurisdictions' tax purposes.

Note 17:
Provisions

Future site restoration costs                        2014       2013
Diavik Diamond Mine (a)                                           
Balance at February 1, 2013 and 2012             $  79,055   $  65,245
Revisions of previous estimates                     (924)     11,369
Accretion of provision                              2,057      2,441
Total Diavik Diamond Mine site restoration         80,188     79,055
costs
Ekati Diamond Mine (b)                                            
Balance at April 10, 2013                         348,230          -
Revisions of previous estimates                   (4,729)          -
Accretion of provision                              7,279          -
Total Ekati Diamond Mine site restoration        350,780          -
costs
Total site restoration costs                     $ 430,968   $  79,055
                                                            

The Company has an obligation under various agreements to reclaim and  restore 
the lands disturbed by its mining operations.

(a) Diavik Diamond Mine
The Company's share of the total undiscounted amount of the future cash  flows 
that will be required to settle the obligation incurred at January 31, 2014 is
estimated to be  CDN $115  million. The  expenditures are  discounted using  a 
discount rate of 2.63%. The revision of previous estimates in fiscal 2013  and 
2014 is  based  on revised  expectations  of reclamation  activity  costs  and 
changes in  estimated  reclamation  timelines. The  Diavik  Joint  Venture  is 
required to provide security for future site closure and reclamation costs for
the Diavik Diamond  Mine's operations  and for various  permits and  licenses. 
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 January 31, 2014 was $58million based on its 40% ownership interest in the
Diavik Diamond Mine.

(b) Ekati Diamond Mine - Future site restoration
The undiscounted  estimated expenditures  required  to settle  the  obligation 
totals approximately  CDN  $420 million  through  2048. The  expenditures  are 
discounted using a discount rate of 2.63%. 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 January  31, 
2014, the Company provided CDN $127  million in letters of credit as  security 
with various regulatory authorities in support of the reclamation  obligations 
for the Ekati Diamond Mine.

Note 18:
Share Capital

(a)Authorized
Unlimited common shares without par value.

(b)Issued

                                 Number of shares       Amount
Balance, January 31, 2012               84,874,781   $   507,975
SHARES ISSUED FOR:                                           
Exercise of options                          8,250           32
Balance, January 31, 2013               84,883,031      508,007
SHARES ISSUED FOR:                                           
Exercise of options                        140,000          516
Balance, January 31, 2014               85,023,031   $   508,523

(c)Stock options
Under the Employee Stock Option Plan, amended and approved by the shareholders
on June 4, 2008, the Company may grant options for up to 6,000,000 shares of
common stock. Options may be granted to any director, officer, employee or
consultant of the Company or any of its affiliates. Options granted to
directors vest immediately and options granted to officers, employees or
consultants vestover three to four years. The maximum term of an option is
ten years. Thenumber of shares reserved for issuance to any one optionee
pursuant to options cannot exceed 2% of the issued and outstanding common
shares of the Company at the date of grant of such options.

The exercise price of each option cannot be less than the fair market value of
the shares on the last trading day preceding the date of grant.

The Company's shares are primarily traded on a Canadian dollar based exchange,
and accordingly stock  option information  is presented  in Canadian  dollars, 
with conversion to US dollars at the average exchange rate for the year.

Compensation expense for stock options was $2.6million for fiscal 2014  (2013 
- $2.6million) and  is presented as  a component  of both cost  of sales  and 
selling, general and  administrative expenses.  The amount  credited to  share 
capital for the exercise of  the options is the sum  of (a) the cash  proceeds 
received and (b) the  amount debited to contributed  surplus upon exercise  of 
stock options by optionees (2014 - $nil; 2013 - $nil).

Changes in share options outstanding are as follows:

            2014        *Story too large*

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