Dia Met finds new leader

The long search for a new president for Dia Met Minerals (DMM-T) is over; James Rothwell will take the reins in mid-August, two weeks prior to the company’s annual meeting.

James Eccott, who has been president and chief executive officer since 1992, is retiring.

Rothwell is considered an ideal fit, having formerly served as president of BHP Diamonds, a majority partner and operator of the Ekati diamond mine, in which Dia Met owns a 29% stake. The mine is Canada’s only producer of such gems, which were discovered there by Dia Met founder Charles Fipke, who serves as a director and shares a 20% interest in the mine with fellow geologist Stewart Blusson.

Ekati cranked out 619,000 carats in the quarter ended April 30 — 9% more than a year ago. In total, 727,000 carats were sold at US$168 per oz.

Dia Met’s share of quarterly sales amounted to $52.3 million, from which was deducted $20.8 million for real and accounting costs. Consequently, revenue topped $32.5 million (including interest and other income) and net earnings, $13.2 million (or 43 per share), for the quarter, compared with $3.2 million (or 11 per share) earned on $15.9 million in the year-ago period.

“The mine has established itself as a world-class asset by any standards, with a gross margin of 69% for the quarter and a pre-tax margin of 60%,” states Eccott.

On April 30, Dia Met’s debt obligations related to Ekati totalled $183.4 million, down from $204.7 million owed on Jan. 31. The company applies 100% of its share of net after-tax cash flow to this debt, a practice established when the mine began production in October 1998.

The diamond miner has transferred its investment in Ekati to a subsidiary incorporated in the Northwest Territories. Other changes in the making for Dia Met include the possible consolidation of its Class A and Class B shares into a single class of common shares.

On a fully diluted basis, Dia Met has 10.2 million Class A shares outstanding and roughly 22.1 million Class B shares outstanding. The former entitle the holder to one vote per share and, in certain circumstances, are convertible to Class B shares, which entitle the holder to 10 votes per share; otherwise, the shares are equal in every respect.