DOMINION DIAMOND CORPORATION Canada s Largest Independent Diamond Producer. ANNUAL AND SPECIAL MEETING JUNE 13, 2017 Growth, Renewal and Value

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1 DOMINION DIAMOND CORPORATION Canada s Largest Independent Diamond Producer ANNUAL AND SPECIAL MEETING JUNE 13, 2017 Growth, Renewal and Value

2 Forward-Looking Information Caution Regarding Forward-Looking Information Certain information included herein that is not current or historical factual information, including information about estimated mine life and other development, production and exploration plans and activities regarding mining activities at the Company s mineral properties, estimated economics of the Ekati Diamond Mine and Diavik Diamond Mine, estimated mineral reserves and mineral resources, projected capital and operating costs, the Company s future capital allocation strategy, the Company s guidance for future periods, future diamond prices, future diamond jewelry demand and diamond production, and future exchange rates, constitute forward-looking information or statements within the meaning of applicable securities laws. Forward-looking information can generally be identified by the use of terms such as may, will, should, could, expect, plan, anticipate, foresee, appears, believe, estimate, predict, continue, modelled, hope, forecast or other similar expressions concerning matters that are not historical facts. Forward-looking information is based on certain factors and assumptions including, among other things, the current mine plan for each of the Ekati Diamond Mine and Diavik Diamond Mine; mining, production, construction and exploration activities at the Company s mineral properties; the timely receipt of required regulatory approvals; mining methods; currency exchange rates; estimates related to the capital expenditures related to bring the Jay pipe, Sable pipe and the A-21 pipe into production; required operating and capitals costs; labour and fuel costs; world and US economic conditions; future diamond prices; and the level of worldwide diamond production. These assumptions may prove to be incorrect. Forward-looking information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what the Company 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, risks associated with the remote location of and climate at the Company s mineral properties, variations in mineral reserves and mineral resources estimates, grade estimates and expected recovery rates, failure of plant equipment processes to operate as anticipated, risks associated with regulatory requirements, the risk of fluctuations in diamond prices and changes in US and world economic conditions (including the impact of the demonetization of the Indian rupee), the risk of fluctuations in the Canadian/US dollar exchange rate, uncertainty as to whether dividends will be declared by the Company s board of Directors or whether the Company s dividend policy will be maintained; and cash flow and liquidity risks. Actual results may vary from the forwardlooking information. Readers are cautioned not to place undue importance on forward-looking information, which speaks only as of the date of this presentation, and should not rely upon this information as of any other date. While the Company may elect to, it is under no obligation and does not undertake to, update or revise any forward-looking information, whether as a result of new information, further 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 Company s filings with Canadian and United States securities regulatory authorities and can be found at and respectively. Technical Information The scientific and technical information relating to the Ekati Diamond Mine contained in this presentation has been prepared and verified by Dominion, operator of the Ekati Diamond Mine, under the supervision of Peter Ravenscroft, FAusIMM, of Burgundy Mining Advisors Ltd., an independent mining consultant, and a Qualified Person within the meaning of National Instrument of the Canadian Securities Administrators. The scientific and technical information relating to the Diavik Diamond Mine included herein has been prepared and verified by Diavik Diamond Mines (2012) Inc., operator of the Diavik Diamond Mine, under the supervision of Calvin Yip, P. Eng., Principal Advisor, Strategic Planning of Diavik Diamond Mines (2012) Inc., and a Qualified Person within the meaning of National Instrument of the Canadian Securities Administrators. All financial information is presented in US dollars, unless otherwise indicated. 2

3 A Year of Progress - Poised for Growth, Renewal and Value Generation Focused on both near-term opportunities and long-term strategies Committed to acting in the best interest of shareholders by evaluating and executing on opportunities that recognize and enhance the value of our unique assets We are pursuing value creation on two parallel tracks: Optimize operations, add growth through robust project development pipeline, invest to support renewed exploration focus, while returning capital to shareholders. Special Committee mandated to explore, review, and evaluate a range of potential strategic alternatives focused on maximizing shareholder value. Positioned to deliver growth in net asset value per share 3

4 Strategic Alternatives Process Unsolicited and non-binding expression of interest disclosed on March 19, 2017 Formation of a Special Committee of the Board announced on March 27, 2017 The Special Committee, with our management team and advisors, will consider alternatives that could include the sale of the company or other strategic transactions This process is ongoing; the Board has not set a timetable nor has it made any decisions related to strategic alternatives at this time

5 Strategy Built on Three Pillars 5

6 Achievements and Upcoming Catalysts Fiscal Advanced our project portfolio and shifted to high-value ore blend at Ekati February 2016 Sable pre-feasibility study completed and construction decision May 2016 Jay environmental assessment receives Ministerial approval; commercial production at Misery Main July 2016 Completion of Jay feasibility study and construction go-ahead Q4 FY 2017 Shifted to high-value ore blend at Ekati Subsequent to fiscal year-end April 2017 Commercial production at Lynx May/June 2017 Misery Deep pre-feasibility study completed and construction decision Upcoming catalysts FY 2018e Fox Deep preliminary economic assessment and pre-feasibility study FY 2018e Summer 2017 drill program results from Ekati FY 2019e First production at A-21 FY 2020e First production at Sable Ekati Sable Project Ekati Misery pit 6

7 Committed to Corporate Social Responsibility TSM Environmental Excellence award for transforming waste management in Canada s North 2016 All Injury Frequency Rate of 0.77 represents 30% reduction over 2015 Proud to partner with Impact Benefit Agreement (IBA) groups on various community development projects Over C$5 million contributed annually to northern communities through IBA payments, scholarships and donations Exceeded targets in hiring of northern residents and northern aboriginals 7

8 Operations and Projects 8

9 Strong Development Project Pipeline Ekati Sable Project Major construction commenced in early 2016 Ekati - Jay Project Ahead of schedule and below budget; pre-stripping to commence in July 2017 Jay Project Positive feasibility study in July 2016 Water license recommended for Ministerial approval Major platform for growth Misery Deep Project Positive pre-feasibility study in May 2017 Construction go-ahead June 2017 Diavik A-21 Pipe On schedule and on budget; completion of dike and start of dewatering expected late

10 Misery Deep Pre-Feasibility Study High-return, near-term incremental opportunity Key Metrics Mining Method Mined Kimberlite Sub-level retreat (SLR) 1.8 million tonnes Mining expected to take place from CY 2018 to mid-cy 2022 Pre-feasibility study mine plan includes: 1.8 million tonnes mined and 8.7 million carats recovered 5 underground production levels Capital and operating costs: Initial development capital $94 million Sustaining capital $9 million Unit operating cost $71 per tonne mined Recovered Carats 8.7 million carats Recovered Grade 4.8 carats per tonne 1 Diamond Recovery 89% 2 Initial Development Capital $94 million 3 Sustaining Capital $9 million 3 Unit Operating Cost $71 per tonne mined 3 Base Case Diamond Price $59 per carat 4 First Production Date Calendar 2019 Mine Operational Life 4 years Post-tax NPV (incremental) $92 million 5 Real Discount Rate 7% Post-tax IRR (incremental) 40% 5 Note: All dollar figures refer to real 2017 dollars and, except for NPV and IRR, are on a 100% basis. Tonnes refer to dry metric tonnes (dmt). 1. The recovered grade is at 1.0 mm cut-off and includes contribution of additional carats from the fines dense media separation ( Fines DMS ) unit in the Ekati processing plant. 2. Recovery relative to mineral resource reported at +0.5 mm cut-off (based upon diamonds that would be recovered by the Ekati bulk sample plant using 0.5 mm width slot de-grit screens). 3. Assumes an exchange rate of 1.33 CAD/USD in calendar 2017 and thereafter. Initial development capital includes a $15 million contingency. Sustaining capital excludes an amount of $12 million associated with processing of deferred Pigeon ore at the end of the mine life. Unit operating cost refers to average unit direct mining cost. 4. Based on the Company s December 2016 Price Book. The rough diamond price forecasts for the Misery Deep PFS include 2.5% per annum real price growth during the life of the mine; real price growth of nil and 3.5% would result in a post-tax NPV of $71 million and $101 million, respectively. 5. Company s share of unlevered NPV and project IRR are after taxes and royalties. 10

11 Misery High-Value Fancies Recovery of high-value fancy yellow and orange diamonds Valuations range from $10,000 to $150,000 per carat Arctic Sun carat fancy yellow diamond recovered at Misery Main in October 2016 Partnered with client to create carat fancy vivid yellow VS1 polished diamond The largest fancy vivid yellow stone ever recovered in North America Large fancy yellow diamonds represent upside to modelled Misery pricing 11

12 Fox Deep Potential 2016 drill sample: 378 carats recovered from 3 holes drilled ranging in depth from 448 m to 600 m, total of 1,006 dmt sampled Ekati - Fox pit New resource model confirmed resource continuity at depth, and identified higher-grade deep zone 45.6 million tonnes indicated mineral resource estimate with 16.5 million carats as at April 12, 2017; increased by 10.4 million tonnes and 4.9 million carats respectively Engineering contractor selected, work on updated mine design underway PEA expected by Q3 FY18 PFS on schedule for completion by end of FY18 Fox Deep Incline cave mine design 12

13 Exploration Attractive Pipeline and Robust Budget Significant potential on large land position in highly prospective Lac de Gras region C$50 million 5-year, success-based budget Priority kimberlite pipes near existing infrastructure at Ekati mine: Leslie maiden inferred mineral resource of 16.3 million carats as at May 18, 2017 Kodiak land-based pipe to be drilled July Diavik mine - additional work planned on C42, T29 and A61 pipes Infrastructure advantage Ability to advance new pipes into production quickly and efficiently Fox Leslie 13

14 Exploration Track Record of Success 14 economic kimberlites to date in Lac de Gras region 150 known kimberlites, including ~110 with no follow-up bulk sampling programs Regional program Lac de Gras JV 20 targets identified Glowworm Lake Strategic desktop review and target generation underway 14

15 Ongoing Optimization Initiatives Optimization - Recent Steps Annual savings of C$19 million driven by changes to our aviation strategy and streamlining our structure Fuel cost savings consumption reduced by 1.4 million litres in 2016 Lower haulage costs through introduction of high-capacity road trains Reduced operating and maintenance consumables at Diavik Opportunities for Further Improvement Fines DMS plant improved recoveries expected H2 FY 2018 Long-haulage strategy continued implementation with additional road trains

16 Strong, Steady Demand Growth Across Established and Emerging Markets Diamond Jewelry Demand By Market 2016 Projected Diamond Jewelry Demand Growth e USA Rest of World India Gulf Japan USA China Japan China India Gulf Rest of World Global Average: 3.4% 2.0% 4.0% 6.0% 8.0% Source: DDC analysis, 2015 prices, non-recycled diamond jewelry. Source: Gemdax 16

17 Millions of Carats Constrained Supply Supports Growth Fundamentals 2016 Rough Diamond Market Share (By Value) Projected Rough Diamond Production e Other 24% De Beers 38% 100 Rio Tinto 4% 75 4% 50 Alrosa 30% 25 '16 '17E '18E '19E '20E '21E '22E '23E '24E '25E Source: Annual reports, investor presentations, KPCS. 17

18 Robust Sales and Adjusted EBITDA Outlook Reflects high-value production and expected diamond price recovery Sales and Adjusted EBITDA to benefit from focus on high-value ore from Misery Main and Koala underground at Ekati, and solid performance at Diavik Historical and Forecast Sales and Adjusted EBITDA 1 Notes: 1 The term EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-ifrs measure. Adjusted EBITDA removes the effects of impairment charges, foreign exchange gains (losses) and exploration costs from EBITDA. Sales and Adjusted EBITDA point estimates for fiscal 2018 through fiscal 2020 represent the mid-point of the respective guidance ranges. 18

19 Growth, Renewal and Value Optimizing operations and leveraging infrastructure advantage in highlyprospective diamond mining district Robust development pipeline with near- and medium-term projects in development Exploration program renewal on extensive land package in Lac de Gras region provides longer-term growth potential World-class sorting and selling operations with strong marketing initiatives to enhance sales Strong balance sheet protects value, supporting growth and return of capital to shareholders Positioned to deliver growth in net asset value per share 19

20 DOMINION DIAMOND CORPORATION Canada s Largest Independent Diamond Producer ANNUAL AND SPECIAL MEETING Growth, Renewal and Value

21 Contact Jacqueline Allison, VP Investor Relations