Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Dominion Diamond (TSX, NYSE:DDC), Canada’s largest publicly traded diamond miner, has posted a loss of $34.9 million in its fiscal fourth quarter and announced the appointment of Jim Gowans as the firm’s non-executive chairman effective immediately.
The Toronto-based miner, which last year was under pressure from activist shareholders, said Gowans replaces outgoing chairman of Dominion Diamond and the board, Robert Gannicott, who has retired from those positions, but will remain a director of the company.
Dominion Diamond lost $11.6 million in the fiscal 2016, compared to a profit of $170.3 million in 2015.
Dominion paid Gannicott US$7.2 million (after taxes) when he recently gave up his CEO position, ceding it to Brendan Bell, a former Northwest Territories minister of Industry, Tourism and Investment.
In February, the N.W.T environmental watchdog handed the firm a small but key victory by accepting a much-needed expansion of Dominion’s Ekati mine.
The company, which also has a 40% stake in Canada’s largest diamond mine — Diavik —, lost $11.6 million in the fiscal 2016, compared to a profit of $170.3 million in 2015.
Dominion Diamond attributed the weak results to the grim conditions that hit the diamond market last year, which drove prices lower. It also said it suffered from a negative foreign exchange impact, and the expenses incurred in connection with the exit of the company’s CEO during fiscal 2016.
