Dominion Diamond Corporation shares soar amid positive outlook for 2018
Company projects sales growth of 62 per cent for fiscal 2018
Shares in Dominion Diamond Corporation soared 12 per cent Friday after the company reported strong sales guidance for fiscal 2018.
The company operates the Ekati diamond mine 310 kilometres northeast of Yellowknife, and owns 40 per cent of the Diavik diamond mine.
Dominion expects sales between $875 million and $975 million for the year ending January 31, 2018. That's up 62 per cent from the previous year, according to a news release issued by the company.
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"They are going to be selling more diamonds than I expected this year," said Paul Zimnisky, analyst. "The average price per carat is going to be a little bit lower, but when you put everything together, the earnings number is higher than most expected. And that's why the stock is up."
"Forecasts for fiscal 2018 are driven by high value production… as Ekati moves to the first full year of the new phase of the mine plan," Jim Gowans, chairman of the company's board of directors, said in the release.
"The cash flow generated by Ekati and Diavik during this period is expected to be ample to fund our pipeline of attractive growth projects and a renewed focus on exploration."
The company is in the final stage of developing the much anticipated Jay Project, which could extend the mine life at Ekati to 2031.
It is also working on pre-feasibility studies for the Misery Deep and Fox Deep Projects. These deposits are located beneath previously-mined pits.
Dominion expects to spend between $115 million and $140 million to grow the company in fiscal 2018.