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Share Name | Share Symbol | Market | Type |
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DDC Enterprise Limited Class A | NYSE:DDC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 14.24 | 0 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
[ ] Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
or
[X] Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended January 31, 2017 | Commission File Number: 001-33838 |
DOMINION DIAMOND CORPORATION
(Exact name of registrant as specified in its charter
)
N/A
(Translation of Registrant's name into
English (if applicable))
Canada
(Province or other jurisdiction of
incorporation or organization)
1499
(Primary Standard Industrial
Classification Code Number (if applicable))
N/A
(I.R.S. Employer Identification Number (if
applicable))
P.O. Box 4569, Station A
Toronto, ON, Canada M5W
4T9
(416) 362-2237
(Address and telephone number of
Registrant's principal executive offices)
DL Services Inc.
Columbia Center, 701 Fifth
Avenue, Suite 6100
Seattle, Washington 98104
Telephone:
(206) 903-8800
(Name, address (including zip code) and telephone
number (including area code)
of agent for service in the United
States)
Copies to
Richard B. Raymer
Dorsey &
Whitney LLP
TD Canada Trust Tower Brookfield Place
161
Bay Street, Suite 4310
Toronto, ON M5J 2S1
Direct:
(416) 367-7388
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Name of each exchange on which registered |
Common Shares | New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
For annual reports, indicate by check mark the information filed with this Form:
[ X ] Annual information form | [ X ] Audited annual financial statements |
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.
The number of common shares of the issuer outstanding as of January 31, 2017 was 81,976,451.
Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to the Registrant in connection with such Rule.
Yes [ ] NO [X]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] NO [ ]
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
Yes [ ] NO [ ]
EXPLANATORY NOTE
Dominion Diamond Corporation (the Registrant ) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Registrant is a foreign private issuer as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.
NOTICE TO UNITED STATES READERS
The Registrant is permitted, under the multi-jurisdictional disclosure system adopted by the United States Securities and Exchange Commission (the Commission ) and certain Canadian securities regulators, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the U.S. The Registrant has prepared its financial statements, which are filed as Exhibit 99.6 to this annual report on Form 40-F, in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board. They are not comparable to financial statements of U.S. companies prepared using U.S. generally accepted accounting principles (U.S. GAAP).
Unless otherwise indicated, all dollar amounts in this annual report on Form 40-F are in U.S. dollars. The exchange rate of Canadian dollars into U.S. dollars, on January 31, 2017, based upon the closing rate published by the Bank of Canada, was U.S.$1.00=CDN$ 1.3012. Bank of Canada exchange rates are nominal quotations and are not buying or selling rates. These rates are intended for statistical or analytical purposes. Rates available from financial institutions will differ. Rates are expressed in Canadian dollars, converted from U.S. dollars.
FORWARD-LOOKING INFORMATION
Certain information included in this annual report and the exhibits attached hereto, along with other documents the Registrant has publicly filed on SEDAR and with the Commission may constitute forward-looking information within the meaning of Canadian and U.S. securities laws, including Section 21E of the Securities Act of 1933, as amended (the Securities Act ), the U.S. Private Securities Litigation Reform Act of 1995 (the PSLRA ), or in releases made by the Commission, all as may be amended from time to time. The following cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the safe harbor provisions of such laws.
Forward-looking information can generally be identified by the use of terms such as may, will, should, could, would, expect, plan, anticipate, foresee, appears, believe, intend, estimate, predict, potential, continue, objective, modelled, hope, forecast or other similar expressions concerning matters that are not historical facts. Forward-looking information relates to managements future outlook and anticipated events or results, and can include statements or information regarding plans for mining, development, production and exploration activities at the Registrants 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, results of the Registrants strategic review process, and expected sales, depreciation and amortization in income, average price per carat sold, cash cost and total cost per tonne processed and cash cost and total cost per carat produced. Forward-looking information included in this annual report on Form 40-F and exhibits attached hereto includes, but is not limited to, the estimated timeline to complete the relocation of the Registrants corporate head office from Yellowknife, Northwest Territories, to Calgary, Alberta, expectations concerning the diamond industry, results of the Registrants strategic review process, as well as sales, diamond pricing, depreciation and amortization and average price per carat sold, the current production forecast, cash cost and total cost per tonne processed, cash cost and total cost per carat produced and planned capital expenditures for the Ekati Diamond Mine, and the current production forecast, cash cost and total cost per tonne processed, cash cost and total cost per carat produced and planned capital expenditures for the Diavik Diamond Mine.
3
Forward-looking information is based on certain factors and assumptions described below and elsewhere in this annual report on Form 40-F and exhibits attached hereto, 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 Registrants mineral properties; the timely receipt of required regulatory approvals; mining methods; currency exchange rates; estimates related to the capital expenditures required to bring the Jay, Sable and A-21 pipes into production; required operating and capital costs, labour and fuel costs, world, India and US economic conditions, future diamond prices, and the level of worldwide diamond production. While the Registrant 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 that could cause actual results to differ materially from what the Registrant 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; risks associated with the estimates related to the capital expenditures required to bring the Jay, Sable and A-21 pipes into production; 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 Registrants mineral property sites; variations in mineral resource and mineral reserve estimates or expected recovery rates; failure of plant, equipment or processes to operate as anticipated; risks resulting from macro-economic uncertainty in other financial markets; risks associated with regulatory requirements and the ability to obtain all necessary regulatory approvals; the risk that diamond price assumptions may prove to be incorrect; modifications to existing practices so as to comply with any future permit conditions that may be imposed by regulators; delays in obtaining approvals and lease renewals; the risk of fluctuations in diamond prices and changes in US, India and world economic conditions; uncertainty as to whether dividends will be declared by the Registrants Board of Directors or whether the Registrants dividend policy will be maintained; the risk of fluctuations in the Canadian/US dollar exchange rate; cash flow and liquidity risks; and uncertainties related to the Registrants strategic review process. See Risks and Uncertainties in the Registrants Annual Information Form attached hereto as Exhibit 99.5, for a discussion of these and other risks and uncertainties involved in the Registrants operations.
Readers are cautioned not to place undue importance on forward-looking information, which speaks only as of the date of this annual report on Form 40-F they 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 annual report on Form 40-F, actual events may differ materially from current expectations. The Registrant 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 Registrant, and cautions readers that the information may not be appropriate for other purposes. While the Registrant may elect to do so, 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.
Additional information concerning factors that may cause actual results to materially differ from those in such forward-looking statements is contained in the Registrants filings with Canadian and U.S. securities regulatory authorities and can be found at www.sedar.com and www.sec.gov, respectively.
4
RESOURCE AND RESERVE ESTIMATES
The Registrants Annual Information Form for the fiscal year ended January 31, 2017, attached as Exhibit 99.5 to this annual report on Form 40-F, and incorporated by reference herein, has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. The terms mineral reserve, proven mineral reserve and probable mineral reserve are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM ) CIM Definition Standards on Mineral Resources and Mineral Reserves , adopted by the CIM Council, as amended. These definitions differ from the definitions in the Commissions Industry Guide 7 ( Industry Guide 7 ) under the Exchange Act. Under Industry Guide 7 standards, a final or bankable feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the Commission. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Inferred mineral resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.
Accordingly, information contained in this report and the documents incorporated by reference herein containing descriptions of our mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder.
PRINCIPAL DOCUMENTS
The following documents have been filed as part of this annual report on Form 40-F:
5
A. Annual Information Form
The Registrants Annual Information Form for the fiscal year ended January 31, 2017 is attached as Exhibit 99.5 to this annual report on Form 40-F, and is incorporated by reference herein.
B. Audited Annual Financial Statements
The Registrants consolidated audited annual financial statements, including the reports of the independent registered public accounting firm with respect thereto, are attached as Exhibit 99.6 to this annual report on Form 40-F and is incorporated by reference herein. The Registrant has prepared its financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board. They are not comparable to financial statements of U.S. companies prepared using U.S. GAAP.
C. Managements Discussion and Analysis
The Registrants managements discussion and analysis of financial condition and results of operations for the twelve month period ended January 31, 2017 is attached as Exhibit 99.6 to this annual report on Form 40-F and is incorporated by reference herein.
TAX MATTERS
Purchasing, holding or disposing of securities of the Registrant may have tax consequences under the laws of the U.S. and Canada that are not described in this annual report on Form 40-F.
DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was carried out under the supervision, and with the participation, of the Registrants management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Registrants design and operation of its disclosure controls and procedures as of the end of the period covered by this annual report on Form 40-F. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of January 31, 2017, the Registrants disclosure controls and procedures (as defined in Rule 13a15(e) and Rule 15d15(e) under the Exchange Act) were effective and adequately designed to ensure that (i) information required to be disclosed by the Registrant in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commissions applicable rules and forms, and (ii) material information required to be disclosed in the Registrants reports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow accurate and timely decisions regarding required disclosure.
It should be noted that while the Registrants Chief Executive Officer and Chief Financial Officer believe that the Registrants disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect the Registrants disclosure controls and procedures or internal control over financial reporting to be an infallible preventative of all possible errors or improprieties. A control system, no matter how well conceived or operated, can, at best, provide only reasonable, not absolute, assurance that the objectives of the control system are met.
6
MANAGEMENTS ANNUAL REPORT ON
INTERNAL CONTROL OVER
FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Registrant, as defined in Rule 13a-15(f) under the Exchange Act. Management has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Management defines internal control over financial reporting as a process designed by, or under the supervision of, the Registrants executive and principal financial officers, or persons performing similar functions, and effected by the Registrant 's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
a. |
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Registrant; |
b. |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Registrant are being made only in accordance with authorizations of management and directors of the Registrant; and |
c. |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Registrant's assets that could have a material effect on the financial statements. |
Because of its inherent limitations, the Registrants internal control over financial reporting may not prevent or detect all possible misstatements or frauds. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
To evaluate the effectiveness of the Registrants internal control over financial reporting, Management has used the Internal Control Integrated Framework (2013), which is a suitable, recognized control framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management, including the Registrants Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of the Registrants internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, and concluded that such internal control over financial reporting was effective as of January 31, 2017 .
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
The Registrants independent registered public accounting firm, KPMG LLP, has issued an attestation report expressing an opinion on the Registrants internal control over financial reporting as of January 31, 2017, which is included in Exhibit 99.6 to this annual report on Form 40-F.
7
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in the Registrants internal control over financial reporting during the fiscal year ended January 31, 2017, that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting.
NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended January 31, 2017 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.
CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER,
CHIEF
FINANCIAL OFFICER, OFFICERS, DIRECTORS AND EMPLOYEES
The Registrant has adopted a written code of ethics (as defined by the rules and regulations of the Commission), entitled Code of Ethics and Business Conduct that applies to each director, officer and employee, including the Registrants Chief Executive Officer, Chief Financial Officer and principal accounting officer.
The code is attached hereto as Exhibit 99.10 to this annual report on Form 40-F. The code may also be obtained from SEDAR at www.sedar.com or free of charge upon request from Investor Relations of the Registrant at P. O. Box 4569, Station A, Toronto, Ontario, M5W 4T9, (416) 362-2237 ext. 1, or by viewing the Registrants web site at www.ddcorp.ca under the tab entitled Profile/Governance/Governance Documents.
All amendments to the code, and all waivers of the code with respect to any director, executive officer or principal financial and accounting officers, will be posted on the Registrants web site within five business days following the date of the amendment or waiver and any amendment will be provided in print to any shareholder upon request.
CORPORATE GOVERNANCE GUIDELINES
The Registrant has adopted corporate governance guidelines and established committees and charters for its Audit Committee, Nominating & Corporate Governance Committee, Human Resources & Compensation Committee and Health, Safety & Environmental Committee regarding such matters as, but not limited to, the Audit Committee, director qualification standards and responsibilities, director compensation and management succession. These guidelines and charters are available on the Registrants website at www.ddcorp.ca under the tab entitled Profile/Governance/Governance Documents.
AUDIT COMMITTEE
The Board of Directors of the Registrant has a separately designated standing Audit Committee. The members of the Audit Committee are:
Chair: | David S. Smith | |
Members: | Thomas A. Andruskevich | |
Trudy Curran | ||
Tim Dabson | ||
Josef Vejvoda |
8
David S. Smith assumed the role of Chairman of the Audit Committee on April 13, 2016. James K. Gowans, the Chairman of the Board of Directors of the Registrant, is an ex-officio, non-voting member of the Audit Committee.
All members of the Audit Committee are financially literate and independent, as that term is defined by the NYSEs corporate governance listing standards applicable to the Registrant and as determined under Rule 10A-3 of the Exchange Act.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrants Board of Directors has determined that it has at least one Audit Committee financial expert serving on its Audit Committee. David S. Smith has been determined by the Board of the Registrant to be an audit committee financial expert as that term is defined by the rules and regulations of the Commission and are independent, as that term is defined by applicable securities laws and the New York Stock Exchange ( NYSE ) listing standards applicable to the Registrant. The Commission has indicated that the designation of David S. Smith as an audit committee financial expert does not (i) make him an expert for any purpose, (ii) impose any duties, obligations or liability on him that are greater than those imposed on members of the Audit Committee and Board of Directors who do not carry this designation, or (iii) affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors of the Registrant.
David S. Smith is designated as an Audit Committee financial expert based on his experience as the Chief Financial Officer and Executive Vice President of Finning International Inc. from 2009 to 2014, and as Chief Financial Officer and a Vice President of Ballard Power Systems, Inc. from 2002 to 2009. Mr. Smith is a Certified Public Accountant, and holds a Bachelor of Science degree in Business Administration from California State University, Sacramento.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed for professional services rendered by KPMG LLP to the Registrant and its subsidiaries for the years ended January 31, 2017 and January 31, 2016 totaled US$1,187,600 and US$1,037,800, respectively, as detailed in the following table:
|
Year ended January 31,
2017
(US$) |
Year ended January 31,
2016
(US$) |
Audit Fees |
1,143,100 | 927,000 |
Audit Related Fees |
44,500 | 33,300 |
Tax Fees |
- | 77,500 |
All Other Fees |
- | - |
TOTAL |
1,187,600 | 1,037,800 |
The nature of the services provided by KPMG LLP under each of the categories indicated in the table is described below.
9
Audit Fees
Audit fees were for professional services rendered by KPMG LLP for the audit of the Registrants annual consolidated financial statements and services provided in connection with statutory and regulatory filings or engagements and interim reviews.
Audit-Related Fees
Audit-related fees were for assurance and related services reasonably related to the performance of the audit or review of the financial statements that are not reported under Audit Fees above.
Tax Fees
Tax fees were for tax compliance, tax advice and tax planning professional services. These services consisted of: tax compliance including the review of tax returns, and tax planning and advisory services relating to common forms of domestic and international taxation (i.e. income tax, capital tax, goods and services tax, payroll tax and value added tax).
All Other Fees
Fees disclosed in the table above under the item All Other Fees were incurred for services other than the audit fees, audit-related fees and tax fees described.
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
It is within the mandate of the Registrants Audit Committee to approve all audit and non-audit related fees and accordingly 100% of the Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees were approved by the Audit Committee. The Audit Committee has adopted a policy for the pre-approval of specifically identified non-audit related services, including tax compliance, review of tax returns, documentation of processes and controls as submitted to the Audit Committee from time to time.
The Registrants Audit Committee has implemented a policy restricting the services that may be provided by the Registrants auditors and the fees paid to the Registrants auditors. Prior to the engagement of the Registrants auditors to perform both audit, and non-audit services, the Audit committee pre-approves the provision of the services. In making their determination regarding non-audit services, the Audit Committee considers compliance with the policy and the provision of non-audit services in the context of avoiding an adverse impact on auditor independence. All audit and non-audit fees paid to KPMG LLP, for the financial year ended January 31, 2017, were pre-approved by the Registrants Audit Committee and none were approved on the basis of the de minimis exemption set forth in Rule 2-01(c)(7)(i)(C) of Regulation S-X. Based on the Audit Committees discussions with management and the independent auditors, the Audit Committee is of the view that the provision of non-audit services by KPMG LLP described above is compatible with maintaining the firms independence from the Registrant.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant currently has no off-balance sheet arrangements.
10
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table lists as of January 31, 2017, information with respect to the Registrants known contractual obligations:
|
Less than | Year | Year | After | |||||||||||
|
Total | 1 year | 23 | 45 | 5 years | ||||||||||
Loans and borrowings (a)(b) |
$ | 10,739 | $ | 10,739 | $ | - | $ | - | $ | - | |||||
Environmental and participation agreements incremental commitments (c) |
88,427 | 5,896 | 13,734 | 9,175 | 57,622 | ||||||||||
Operating lease obligations (d) |
14,992 | 4,402 | 6,517 | 4,073 | - | ||||||||||
Capital commitments (e) |
23,498 | 23,498 | | | | ||||||||||
Other |
13,411 | 13,411 | | | | ||||||||||
Total contractual obligations |
$ | 149,067 | $ | 57,946 | $ | 20,251 | $ | 13,248 | $ | 57,622 |
(a) |
Loans and borrowings presented in the foregoing table include current and long-term portions. The Registrant issued a promissory note on October 15, 2014 in the amount of $42.2 million in connection with its acquisition of an additional 8.889% interest in the Core Zone at the Ekati Diamond Mine. The promissory note is payable in instalments over 31 months and the Registrant has the right, but not the obligation, to satisfy one or more instalments due under the promissory note in common shares of the Registrant. On January 31, 2017, $10.7 million, which represents the principal amount of the note plus accrued interest, was outstanding. |
The Registrants first mortgage on real property was fully discharged when the Registrant sold its downtown Toronto office building. The principal balance and accrued interest was paid to the lender on September 8, 2016. The Registrant has available a $210 million senior secured corporate revolving credit facility (available in either US or CDN dollars) with a syndicate of commercial banks for general corporate purposes. At January 31, 2017, no amounts were outstanding under this facility. |
|
(b) |
Interest on loans and borrowings is calculated at various fixed and floating rates. Projected interest payments on the current debt outstanding are based on interest rates in effect at January 31, 2017, and have been included under loans and borrowings in the table above. Interest payments for the next 12 months are estimated to be approximately $0.2 million. |
(c) |
Through negotiations of environmental and other agreements, both the Diavik Joint Venture and the Ekati Diamond Mine must provide funding for the Environmental Monitoring Advisory Board and the Independent Environmental Monitoring Agency, respectively. Further funding will be required in future years; however, specific amounts have not yet been determined. These agreements also state that the mines must provide security for the performance of their reclamation and abandonment obligations under environmental laws and regulations. |
The Registrant posted surety bonds with the Government of Northwest Territories (GNWT) in the aggregate amount of CDN $253 million to secure the obligations under its Water Licence to reclaim the Ekati Diamond Mine. The Registrant provided letters of credit, secured by restricted cash, in the amount of CDN $60 million and CDN $25 million to the GNWT as security for the reclamation obligations for the Diavik Diamond Mine and Ekati Diamond Mine, respectively. In February 2017, CDN $20 million of letters of credit were cancelled with the corresponding amount of restricted cash released. The security was replaced by additional CDN $20 million of surety bonds posted with the GNWT. The Registrant has also provided a guarantee of CDN $20 million for other obligations under the environmental agreement for the Ekati Diamond Mine. |
|
Both the Diavik and Ekati Diamond Mines have also signed participation agreements with various Aboriginal communities. These agreements are expected to contribute to the social, economic and cultural well-being of these communities. 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 under these agreements in respect of the Ekati Diamond Mine 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. |
(e) |
The Registrant has various contractual commitments related to the acquisition of property, plant and equipment. The commitments included in the table above are based on expected contract prices. |
For further information on the tabular disclosure of contractual obligations, see page 89 of the 2017 Annual Report of the Registrant for the year ended January 31, 2017, incorporated by reference and included herein as Exhibit 99.6 of this annual report on Form 40-F.
11
COMPLIANCE WITH NEW YORK STOCK EXCHANGE
CORPORATE
GOVERNANCE RULES
The Registrant complies with corporate governance requirements of both the Toronto Stock Exchange (the TSX ) and the NYSE. As a foreign private issuer the Registrant is not required to comply with all of the corporate governance requirements of the NYSE, however, the Registrant adopts best practices consistent with domestic NYSE listed companies when appropriate to its circumstances.
The Registrant has reviewed the NYSE corporate governance requirements and confirms that the Registrants corporate governance practices are not significantly, nor materially different than those required of domestic companies under the NYSE listing standards. Except as described below, the Registrant is in compliance with the NYSE corporate governance standards in all significant respects:
Approval of Equity Compensation Plans
Section 303A.08 of the NYSEs Listed Company Manual requires shareholder approval of all equity compensation plans and material revisions to such plans. The definition of equity compensation plans covers plans that provide for the delivery of both newly issued and treasury securities, as well as plans that rely on securities re-acquired in the open market by the issuing company for the purpose of redistribution to employers and directors.
The TSX rules provide that the creation of any equity compensation plans that provide for new issuances of securities is subject to shareholder approval. Any amendments to such plans are subject to shareholder approval unless the specific equity compensation plan contains detailed provisions, approved by the shareholders that specify those amendments requiring shareholder approval and those amendments which can be made without shareholder approval. The Registrant follows the TSX rules with respect to the requirements for shareholder approval of equity compensation plans and revisions to such plans.
Human Resources & Compensation Committee Independence
The Registrant has elected not to adopt Section 303A.02 and 303A.05 of the NYSE Listed Company Manual applicable to charters and independence of Compensation Committee members and advisors for U.S. domestic issuers. As a foreign private issuer, the Registrant is not required to comply with these rules.
Further information about the Registrants governance practices is included on the Registrants website.
MINE SAFETY DISCLOSURE
Not applicable.
12
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed with the Commission a Form F-X in connection with its common shares. Any change to the name or address of the agent for service of process of the Registrant shall be communicated promptly to the Commission by an amendment to the Form F-X referencing the file number of the relevant registration statement.
ADDITIONAL INFORMATION
Additional information relating to the Registrant may be found on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Commissions Electronic Data Gathering, Analysis and Retrieval (EDGAR) system at www.sec.gov.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
DATED the 12 th day of April, 2017.
DOMINION DIAMOND CORPORATION | |
(Registrant) | |
By: | /s/ BRENDAN BELL |
Name: Brendan Bell | |
Title: Chief Executive Officer |
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EXHIBIT INDEX
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1 Year DDC Enterprise L Chart |
1 Month DDC Enterprise L Chart |
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