TSX.V Symbol (DMI)
KELOWNA, BC, Feb. 26, 2015 /CNW/ - Diamcor Mining Inc. (TSX-V.DMI / OTCQX-DMIFF), (the "Company") announces the results for its third fiscal quarter ended December 31, 2014, and continues the planned upgrades at Krone-Endora at Venetia (the "Project).
For the third fiscal quarter ended December 31, 2014, the Company sold 3,579.07 carats of rough diamonds generating gross revenues of CDN $886,843, net of commissions and fees, for an average price of US $221.96 per carat as compared to sales of 3,955 carats and gross revenues of CDN $1,396,591 net of commissions and fees, for the same period ended December 31, 2013. The Company's revenues for the third quarter during the prior fiscal year were positively impacted by the recovery of a 91.7 carat gem quality diamond which sold for US $817,920 in that period. The Company recovered an additional 1,678.18 carats during the third fiscal quarter 2015 which were held in inventory at the end of the fiscal quarter. For the nine month period ended December 31, 2014 gross revenues were CDN $2,029,448 as compared to CDN $2,831,104 for the same nine month period during the prior fiscal year. Exclusive of revenues realized from the sale of the 91.7 carat diamond sold during the nine month period ended December 31, 2013, revenues remained relatively constant for the nine month period on a year over year comparative basis.
Rough diamonds recovered and sold during the current period were the result of continued processing of material in the +1.0mm to -26mm size fractions, with the vast majority of this material being from the lower-grade upper gravels from the K1 area of the Project. Material in the +26.0mm size fractions continued to be screened off and stockpiled during the period, pending completion of the planned expansion at the Project. The Project upgrades underway are designed to effectively treat the +26.0mm size fractions and also designed to enhance efficiencies related to all sizes of material. The Company expects the expansion to be complete with upgrades implemented in the fiscal quarter commencing April, 2015.
During the third fiscal quarter ended December 31, 2014, the Company incurred operating expenses of $709,449, a modest increase when compared to $573,720, realized in the same period during the prior fiscal year. However, for the nine month period ended December 31, 2014, operating expenses were $1,103,804, a significant 29% decline as compared to operating expenses of $1,557,889 realized in the same period during the prior fiscal year. Operating expenses are primarily management, contracted labour, equipment, utilities, fuel, and other expenses incurred at the Project. The decrease in operating expenses during the nine month period is primarily attributable to reduced labour, contracted equipment and fuel requirements in the current fiscal year due to the automation of processes implemented by the Company over the past few fiscal quarters. The Company realized net income from operating activities of $177,344 during the quarter ended December 31, 2014, as compared to $822,871 for the same period during the prior fiscal year. For the nine month period ended December 31, 2014, net income from operating activities was $925,644 as compared to $1,273,205 realized for the same nine month period during the prior fiscal year. As mentioned above, net income from operating activities during the prior fiscal year was positively impacted as a result of revenues realized from the recovery of the large 91.7 carat diamond during that period.
Total general and administrative expenses for the fiscal quarter ended December 31, 2014 were $829,065 as compared to $799,572 realized in the same period during the prior fiscal year. The modest increase in general and administrative expenses is primarily attributable to an increase in accretion and depreciation expenses from $229,316 in the third fiscal quarter ended December 31, 2014 from $179,418 realized in the same period during the prior fiscal year. Interest and bank charges related to the Company's Tiffany & Co financing facilities were $171,856 in the current fiscal quarter ended December 31, 2014 as compared to $181, 413 for the same period during the prior fiscal year. For the nine month period ended December 31, 2014 preliminary general and administration expenses were $2,458,660 a significant decrease when compared to $4,626,485 incurred in the same nine month period during the prior fiscal year. The significant reduction in expenses for the nine month period ended December 31, 2014, was primarily attributable to the recognition of no stock based compensation expenses in the current period as compared to $2,359,000 realized in the same period during the prior fiscal year ended December 31, 2013.
For the fiscal quarter ended December 31, 2014, the Company incurred a net loss before income tax of $651,721 or $0.01/share, as compared to net income before income tax of $23,299 or $0.01/share, realized in the same period during the prior fiscal year ended December 31, 2013. For the nine month period ended December 31, 2014, the net loss before income tax was $1,533,016 a significant improvement as compared to a net loss before income tax of $3,353,280 for the same nine month period during the prior fiscal year.
Net cash flow used in operating activities for the fiscal quarter ended December 31, 2014 was $432,867. For the nine month period ended December 31, 2014, net cash flow used was $1,055,193. During the recent fiscal quarter the Company closed a $3.13M brokered and non-brokered private placement to augment the planned further expansion of its Krone-Endora at Venetia (the "Project") mining facilities. In support of the Company's plans, Tiffany & Co. Canada agreed to one year deferral and loan extensions, effective December 1, 2014, of all principal and interest payments accruing pursuant to the terms of its loan and convertible debenture financings with the Company. Interest will continue to accrue on the outstanding balances of the financing facilities during this period. Payments of both principle and interest will once again commence in January, 2016. As of December 31, 2014, the Company has cash and cash equivalents of $3,371,111.
During the Company's third fiscal quarter ended December 31, 2014, preparations continued in connection with the updating of the Company's initial NI43-101 technical report. Once filed, the updated report is expected to reflect the nature and extent of the infrastructure development achieved at the Project, as well as other relevant data available to this point.
The recovery of all rough diamonds during the fiscal quarter ended December 31, 2014, were incidental to the ongoing commissioning and testing exercises performed at the Company's Krone-Endora at Venetia project. The above-noted testing exercises and incidental recoveries do not form part of the initial NI43-101 Technical Report filed by the Company on July 30, 2009, and thus no general grade, price, or quality determination is intended by the Company at this time due to the nature and purpose of the processing of this material.
The Company's complete financial results and associated Management Discussion and Analysis for its third fiscal quarter ended December 31, 2014, can be accessed at www.sedar.com, or on the Company's website at www.diamcormining.com.
About Diamcor Mining Inc.
Diamcor Mining Inc. is a fully reporting publically traded junior diamond mining company which is listed on the TSX Venture Exchange under the symbol V.DMI, and on the OTC QX International under the symbol DMIFF. The Company has a well-established operational and production history in South Africa and extensive prior experience supplying rough diamonds to the world market.
About the Tiffany & Co. Alliance
The Company has established a long-term strategic alliance and first right of refusal with Tiffany & Co. Canada, a subsidiary of world famous New York based Tiffany & Co., to purchase up to 100% of the future production of rough diamonds from the Krone-Endora at Venetia Project at then current prices to be determined by the parties on an ongoing basis. In conjunction with this first right of refusal, Tiffany & Co. Canada also provided the Company with financing to advance the Project. Tiffany & Co. is a publically traded company which is listed on the New York Stock Exchange under the symbol TIF. For additional information on Tiffany & Co., please visit their website at www.tiffany.com.
About Krone-Endora at Venetia
In February 2011, Diamcor acquired the Krone-Endora at Venetia Project from De Beers Consolidated Mines Limited, consisting of the prospecting rights over the farms Krone 104 and Endora 66, which represent a combined surface area of approximately 5,888 hectares directly adjacent to De Beers' flagship Venetia Diamond Mine in South Africa. On September 11, 2014, the Company announced that the South African Department of Mineral Resources had granted a Mining Right for the Krone-Endora at Venetia Project encompassing 657.71 hectares of the Project's total area of 5,888 hectares. The Company has also submitted an application for a mining right over the remaining areas of the Project. The deposits which occur on the properties of Krone and Endora have been identified as a higher-grade "Alluvial" basal deposit which is covered by a lower-grade upper "Eluvial" deposit. The deposits are proposed to be the result of the direct-shift (in respect to the "Eluvial" deposit) and erosion (in respect to the "Alluvial" deposit) of material from the higher grounds of the adjacent Venetia Kimberlite areas. The deposits on Krone-Endora occur in two layers with an average total depth of less than 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation to be employed with the potential for near-term diamond production from a known high-quality source. Krone-Endora also benefits from the significant development of infrastructure and services already in place due to its location directly adjacent to the Venetia Mine.
Qualified Person Statement:
Mr. James P. Hawkins (B.Sc., P.Geo.), is Manager of Exploration & Special Projects for Diamcor Mining Inc., and the Qualified Person in accordance with National Instrument 43-101 responsible for overseeing the execution of Diamcor's exploration programmes and a Member of the Association of Professional Engineers and Geoscientists of Alberta ("APEGA"). Mr. Hawkins has reviewed this press release and approved of its contents.
On behalf of the Board of Directors
This press release contains certain forward-looking statements. While these forward-looking statements represent our best current judgement, they are subject to a variety of risks and uncertainties that are beyond the Company's ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Further, the Company expressly disclaims any obligation to update any forward looking statements. Accordingly, readers should not place undue reliance on forward-looking statements.
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SOURCE Diamcor Mining Inc.
For further information: Mr. Dean H. Taylor, President & CEO, Diamcor Mining Inc., [email protected], Tel (250) 864-3326, www.diamcormining.com