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Dominion Diamond sees encouraging acquisition prospects in Canada

(Adds comments from CEO)

By Nicole Mordant

July 6 (Reuters) - Dominion Diamond Corp , Canada's biggest publicly traded diamond miner, is keeping an eye out for acquisitions in Canada where some prospects are "very encouraging," its chief executive said on Wednesday.

Dominion, which owns stakes in two of Canada's biggest diamond mines, Ekati and Diavik, is looking for a new chief financial officer who has been involved in a lot of mining mergers and acquisitions, CEO Brendan Bell said.

Dominion said earlier on Wednesday that Chief Financial Officer Ron Cameron would step down on July 15 and Vice President Group Controller Cara Allaway would take over as interim CFO.

"We think there are some very encouraging prospects on the horizon potentially," Bell said in an interview.

"We think Dominion Diamonds, the largest publicly traded Canadian diamond player, is the logical acquirer," he said.

Dominion's main focus remains on developing its core internal diamond projects in Canada's Northwest Territories and it was "not desperate to rush in and overpay", Bell said.

Dominion was open to purchasing either a project that it would develop into a mine, or a producing mine, he said.

Asked if Dominion would be interested in De Beers' Snap Lake mine, also located in the Northwest Territories, Bell said he was not aware that it was for sale.

Diamond giant De Beers is weighing whether to sell, close, reopen or continue suspension of the money-losing Arctic mine, which was shuttered last December due to poor market conditions.

Dominion, which in December faced a revolt from an investor group angry at its falling share price, earlier on Wednesday unveiled a new capital plan. It includes buying back up to 7.2 percent of its issued shares and the sale of an office building in downtown Toronto.

Bell said the building is expected to sell for "tens of millions of dollars". The sale is expected to be completed in the third quarter of fiscal year 2017.

The diamond miner also said it is looking to increase its dividend to shareholders, depending on cash flow. Until it has a better handle on the impact of a June 23 fire at the Ekati process plant, it will, however, stick with its 40 cents annual dividend.

Dominion also said its board had approved the development of the Jay diamond pipe at its majority-owned Ekati mine.

Dominion's board was looking to fill some upcoming vacancies and is in the process of reviewing prospective directors, Bell said.

(Additional reporting by Arathy S Nair in Bengaluru; Editing by Kirti Pandey, Bernard Orr)