Upcoming AWS Coverage on Westmoreland Coal
LONDON, UK / ACCESSWIRE / March 28, 2017 / Active Wall St. blog coverage looks at the headline from Dominion Diamond Corp. (NYSE: DDC) as the Company announced on March 27, 2017, that its Board of Directors has formed a Special Committee to explore, review and evaluate multiple potential strategic alternatives, primarily aimed at maximizing shareholder's value. The Special Committee will work together with the Company's management team and advisors to explore alternatives that could include the sale of the Company or other strategic transactions. Register with us now for your free membership and blog access at:
One of Dominion Diamond's competitors within the Nonmetallic Mineral Mining space, Westmoreland Coal Co. (NASDAQ: WLB), announced on March 16, 2017, that it is delaying the filing of its Form 10-K with the SEC for the period ended December 31, 2016, as well as its previously scheduled earnings release and teleconference, until Tuesday, March 28, 2017. AWS will be initiating a research report on Westmoreland Coal in the coming days.
Today, AWS is promoting its blog coverage on DDC; touching on WLB. Get all of our free blog coverage and more by clicking on the link below:
Details of the Agreement
Dominion Diamond is a Canadian diamond mining Company with ownership interests in two major diamond producing located approximately 200 kilometres south of the Arctic Circle in Canadian's Northwest Territories. The Company operates the Ekati Diamond Mine and holds 40% ownership of the Diavik Diamond Mine which is jointly owned by Rio Tinto PLC (NYSE: RIO).
Currently, Dominion Diamond supplies rough diamonds to the global market through its sorting and selling operations across Belgium, India, and Canada, as the largest independent diamond producer.
A source close to Rio said last week that it was not interested in selling its stake in Diavik, even if US Billionaire Dennis Washington was interested in acquiring it.
The $1.1 billion Unsolicited Bid
On March 19, 2017, Dominion Diamond confirmed that it had received an unsolicited, conditional, and non-binding expression of interest from the Washington Corporation to acquire the Company for approximately $1.1 billion. The offer was initially not accepted owing to Washington's lack of expertise in the diamond mining and processing industry, and a lack of a proper business strategy to maintain the Company's growth.
This transfer of power and strategic secrets was not in the best of interest of the shareholders and hence, the Company remained confident on its long-term strategic plan and the opportunity it offers to enhance the value delivered to shareholders. Dominion Diamond stated in its official press release that it is open to holding discussions with Washington Corporation on customary terms and in a manner that protects the interests of the Company and its stakeholders.
Dominion Diamond announced on March 16, 2017, its guidance for FY18, ending January 31, 2018. The Company expects the sales to be in the range of $875 million and $975 million, representing a 62% increase from its FY17 sales. Adjusted EBITDA is expected to be in the range of $475 million to $560 million for FY18. The cash cost of production is expected to be in the range of $70-$80 per ton processed with $35-$45 per carat produced. Dominion forecasts net production from its Ekati and Diavik Gold Mines to be between 9.1 million to 10.0 million carats, which includes 100% contribution from Ekati Mine and 40% from Diavik Mine for FY18
Additionally, the Company announced that it expects the Lynx project to start commercial production of high-value carats in FY18 at the Ekati location, while the Sable project would have first production of high-value carats in FY20.
Considering the announcement of exploration of strategic opportunities, the Company's Board of Directors has not set a fixed schedule for this process nor has made any decisions related to strategic alternatives at this time. Hence, there is no assurance offered that the exploration of strategic alternatives will result in any transaction or change in strategy.
On Monday, March 27, 2017, the stock closed the trading session at $12.93, rising slightly by 1.65% from its previous closing price of $12.72. A total volume of 2.28 million shares have exchanged hands, which was higher than the 3-month average volume of 425.85 thousand shares. Dominion Diamond's stock price surged 47.43% in the last month, 39.18% in the past three months, and 42.28% in the previous six months. . Furthermore, since the start of the year, shares of the Company have rallied 33.57%. The stock has a dividend yield of 3.09%. The net market capital for the Company stood at $1.07 billion at yesterday's closing bell.
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