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Dominion approves Jay diamond project; share buyback launched as CFO exits

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Dominion approves Jay diamond project; share buyback launched as CFO exits

DominionDiamond Corp. said July 6 that it will go ahead with thedevelopment of its Jay diamond project in Canada's Northwest Territories afterreceiving positive results from a feasibility study.

The company also revealed in a separate news release that itplans to return capital to its shareholders via a share buyback, and that RonCameron will leave as CFO effective July 15.

CEO Brendan Bell said the feasibility study confirms the economicand technical viability of the large-scale, high-grade Jay project, which isthe most significant undeveloped deposit at the Ekati mine.

The study assigns the project a post-tax net present valueof US$398 million and an internal rate of return of 15.6%.

The development, which will be funded from existing cash onhand and internal cash flow, is estimated to require US$647 million of capital,based on the Jay project using the existing infrastructure at the Ekati mine.

Ekati's mine life has been extended by two years to 2033,with the mining of the Sable and Jay projects to be undertaken concurrentlyfrom 2021 to 2023, followed by mining at Jay only from 2024 to 2032.

Meanwhile, following its decision to mine the Jay deposit,Dominion plans to repurchase up to 6,150,010 shares, or about 7.2% of its sharecapital, over the next 12 months.

The company said it will buy back the shares at marketprice.

Additionally, Dominion will sell its Toronto officebuilding, with the transaction expected to occur in the third quarter of fiscal2017.

The company is also considering raising the dividend in thecurrent financial year above the 40 U.S. cents per share it previously paid.

Dominion said, however, that it will not make any changes toits dividend policy until the short-term impacts of the June 23 at the Ekati process plantare clearer.

The company will begin the search for a new CFO followingCameron's departure, and Cara Allaway, who currently serves as vice presidentgroup controller, will fill the role in the interim.