dominion diamond corporate social responsibility

DOMINION DIAMONDCORPORATE SOCIAL

RESPONSIBILITY REPORT

2014

58 MILLION CARATSTOTAL PRODUCTION AS OF 2014 FROM THE

EKATI MINE

ABOUT DOMINION DIAMONDDominion Diamond is proud to be a Canadian company. We are northern-based, with anorthern leadership team and a corporate head office in Yellowknife, NorthwestTerritories.

The company has ownership interests in two major producing diamond mines situated approximately200 kilometres south of the Arctic Circle in Canada’s Northwest Territories:

We operate the Ekati mine, in which we have a controlling interest.

We own 40% of the Diavik Diamond Mine.

We are the world’s third-largest producer of rough diamonds by value and are also Canada’s largest independentdiamond producer.

We market full production from the Ekati mine and our share of production from the Diavik mine by sorting andvaluing diamonds that are then sold to the international diamond market through wholly owned subsidiaries inAntwerp, Belgium, and Mumbai, India. Our rough diamond clients are based in the major diamond cutting andpolishing centres of India and Israel, and we have specific customers in the United States and Belgium.

The largest gem-qualitydiamond produced at theEkati mine is the flawless

78-carat Ekati Spirit.

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CEO MESSAGEI am pleased to present Dominion Diamond’s first Corporate Social Responsibility Report.We are committed to communicating clearly and openly with our many stakeholders. Thisreport brings together, in one place, key information about our socio-economic andenvironmental performance. In reading it, we hope you will gain a new appreciation ofhow deeply we care about the North – both the land and the people who live here – andhow much we are doing to make a lasting, positive contribution.

Social and environmental development are closely tied to Dominion Diamond’s business strategy and long-termsuccess. We firmly believe that promoting the health and well-being of our people, protecting the environment,and engaging with and investing in northern and local communities are not just the right things to do, but alsocritical for our business. They help us build trust and credibility, pursue new opportunities, manage business risk,and maintain our social licence to operate. While our obligations are spelled out in our contractual agreementswith the Government of the Northwest Territories and Aboriginal communities, upholding the spirit of thesecommitments matters as much to us as meeting their terms. We are approaching the expansion of our office inIndia in an equally responsible manner and finding ways to make a meaningful local impact there too.

Dominion Diamond has established itself as a capable miner, with strong operating and financial results. We arealso making great strides in social and environmental areas. Here are a few examples:

The Ekati mine employed 549 northern residents in 2014, of which 62% were northern Aboriginal. We employedmore northerners and northern Aboriginal people than any other company in the Northwest Territories. This isproof of the outstanding job our team is doing in attracting and retaining a northern workforce.

We have taken community engagement to a new level. We are especially proud of the extensive engagementaround the Jay Project. The input received resulted in significant changes and improvements to the project plansand we are optimistic that our approach will facilitate the permitting process.

Dominion Diamond and Diavik Diamond Mines won the Towards Sustainable Mining Environmental ExcellenceAward in May 2015 for the Joint Regional Grizzly Bear DNA Program. It was especially gratifying to be recognizedfor our efforts at a national level.

Unfortunately, the Ekati mine did not meet its 2014 safety performance target. While most of the injuries wereminor, the overall number was unsatisfactory. Zero harm is the ultimate goal and we must take anything less thanthat seriously. As a result, we are introducing new safety systems and programs that we expect will driveimprovement.

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As we look to the future, our efforts are focused on advancing the Jay Project, which will provide a future for theEkati mine. The Jay pipe is the most significant undeveloped diamond deposit at the mine. If approved, the projectwould add approximately 10 years to the current mine life, keeping the Ekati mine open until at least 2030.

The Jay Project has been subject to a two-year environmental assessment process, which is aimed atdemonstrating that the project can be developed in an economically and environmentally responsible way.

Dominion Diamond is pleased that the Mackenzie Valley Environmental Impact Review Board (MVEIRB) hascompleted its Report of Environmental Assessment and has recommended that the project be approved, subject tothe measures described in the Report. We look forward to a timely decision by the Minister of Lands.

At the Diavik mine, the A-21 pipe is in development, with the first kimberlite production anticipated by the end of2018. This will supplement the mine’s underground production in the later years of the mine life.

Our strategy is to secure the immediate future of the operating mines and then advance additional opportunitiesfor a long-term, sustainable northern diamond business that benefits the people of the North.

All in all, we had a busy and productive year. Our people rose to the challenges before them and they are the reasonfor our bright future. As we evolve our social and environmental development reporting, we intend to provide moreinformation and align with international sustainability reporting standards. I would love to hear what you think ofthis report at [email protected].

Sincerely,Brendan BellChief Executive Officer

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SALES(in millions of US dollars)

OPERATING PROFIT(in millions of US dollars)

ADJUSTED EBITDA(in millions of US dollars)

PERFORMANCE HIGHLIGHTSWhile most of this Corporate Social Responsibility Report covers company performanceduring the 2014 calendar year, our fiscal year closes at the end of January. The financialresults shown below reflect performance for the years ended January 31, 2014 and 2015.

The term “EBITDA” (earnings before interest, taxes, depreciation and amortization) does not have a standardized meaning accordingto International Financial Reporting Standards (“IFRS”). The company discloses Adjusted EBITDA, which removes the effects ofimpairment charges, foreign exchange gains (losses) and exploration costs from EBITDA.

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Fiscal 2015 was a good year, especially from an operations and cash flow perspective. The company generatedearnings before tax of $166 million, as well as strong free cash flow, and ended the year with a solid balancesheet that will support current business initiatives and development projects.

Following the strong results, the Board of Directors declared a dividend of 40 cents per share which was paid inMay 2015, and announced that going forward the company intends to pay a regular annual dividend of 40 centsper share.

We were pleased with the operational progress at the Ekati and Diavik mines. Ongoing improvements to theprocess plant at the Ekati mine delivered increased carat production. Both mines focused on cost control, whichled to increased operating margins and Adjusted EBITDA, and ultimately improved free cash flow generation.

A significant milestone was achieved with the filing of the Developer’s Assessment Report for the Jay Project, andanother with the release of the positive Jay pre-feasibility study results. If approved, the project would add 10 to

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11 years to the current mine life of the Ekati mine, keeping it open until at least 2030. The environmentalassessment process is almost complete and we anticipate a ministerial decision in 2016. If the decision isfavourable, the water licence and land use permitting process is expected to take a further six to eight months.We are encouraged that permitting is on track.

At the Diavik mine, the teams completed another excellent year of consistent and steady performance. Rio Tintoapproved the development of the A-21 pipe, which will help keep the process plant filled until the end of Diavik’smine life.

LEARN MORE

2015 Annual Report

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CANADAYellowknife, NWTHead office, rough diamond sortingfacility

The diamond sorting facility is located at asecure location in Yellowknife, where roughdiamonds from the Ekati and Diavik minesare sorted.

Ekati mine: Lac de Gras, NWTOpen pit and underground mines,processing facilities

Dominion Diamond has a controllinginterest.

Diavik Diamond Mine: Lac de Gras,NWTUnderground mines (open pit minein development), processingfacilities

Dominion Diamond has a 40% ownershipstake.

Toronto, OntarioCorporate office

UNITED KINGDOMLondon, EnglandCorporate office

BELGIUMAntwerpSales office

Antwerp is the world’slargest diamondtrading centre.

INDIAMumbaiSorting facilityand sales office

The majority of theworld’s roughdiamonds are cutand polished inIndia.

WHERE WE OPERATE

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ABOUT THIS REPORTThis is Dominion Diamond’s first Corporate Social Responsibility Report, which provides a summaryof our socio-economic and environmental commitments, priorities and performance in the 2014calendar year. Financial results presented are from the company’s 2015 fiscal year, which ran fromFebruary 1, 2014 to January 31, 2015.

The main focus of this report is the Ekati mine, which the company operates and in which it has acontrolling interest. Select information about the Diavik Diamond Mine, in which we have a 40%stake, is also included in the report. We also encourage you to read the Diavik Diamond Mine 2014Sustainable Development Report for details. Further along in our value chain, we have a growingpresence in Mumbai, India, and present some information about these operations.

Dominion Diamond publishes a number of reports for the public, most notably related to the Socio-Economic Agreement (SEA) between the Ekati mine and the Government of the NorthwestTerritories, and the Ekati mine Environmental Agreement and Water Licence. These reports can bedownloaded here:

Dominion Diamond 2014 Socio-Economic Agreement Report

Ekati Diamond Mine Environmental Agreement and Water Licence Annual Report Summary 2014

We plan to evolve our sustainability reporting in future years to align with the Global ReportingInitiatives (GRI) G4 Sustainability Guidelines.

Please let us know what you think about this report and how we can improve:

COMMUNICATIONS AND EXTERNAL RELATIONS

Laura Worsley-BrownSenior Advisor, External RelationsE-mail: [email protected]

INVESTOR RELATIONS

Kelley StammManager, Investor RelationsP.O. Box 4569, Station AToronto, Ontario, CanadaM5W 4T9Tel: 416.205.4380

E-mail: [email protected]

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For general inquiries, please contact us at:

CORPORATE HEAD OFFICE

#1102 – 4920 52nd StreetYellowknife, Northwest Territories, CanadaX1A 3T1

Tel: 867.669.6100Fax: 867.669.9293

CORPORATE OFFICE

P.O. Box 4569, Station AToronto, Ontario, CanadaM5W 4T9

Tel: 416.362.2237Fax: 416.362.2230E-mail: [email protected]

For investor inquiries:Kelley StammManager, Investor RelationsP.O. Box 4569, Station AToronto, Ontario, CanadaM5W 4T9Tel: 416.205.4380

E-mail: [email protected]

For communications and external relations:Laura Worsley-BrownSenior Advisor, External RelationsE-mail: [email protected]

CONTACT DETAILS

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OUR APPROACHDominion Diamond takes great pride in the work we do to make a difference in the North.We run an efficient business that creates jobs, strengthens the northern economy anddelivers shareholder value, while promoting the safety, development and well-being ofour employees and upholding our commitments to the land, the North, and all who livehere.

Our integrated approach to social, economic and environmental development encompasses all aspects of ourbusiness. We work to enhance the positive impacts of our business while maximizing the resources we mine. Ourcommitment includes respect for the natural and social environments, sharing economic benefits, and diligentlyreducing adverse impacts or outcomes resulting from our work. It involves setting measurable goals, seeking toimprove performance against these goals over time, and being open and timely in reporting that performance.

We are approaching our development of new projects in an equally responsible manner and finding ways to make ameaningful impact wherever we operate.

Our Sustainable Development Policy spells out how we nurture a corporate culture that promotes social andenvironmental development. The policy identifies goals and approaches for each of eight core values:

Zero harm

Safety

Health

Environmental protection

Risk management

Community engagement

Compliance

Creating value

The Sustainable Development Policy aligns with two international standards – OHSAS 18001 for health and safetymanagement systems and ISO 14001 for environmental management systems – as well as expectations defined inthe Mining Association of Canada’s (MAC) Towards Sustainable Mining (TSM) initiative. As a member of MAC,Dominion Diamond is expected to follow MAC policies and programs, and we use TSM reporting as part of a suite oftools that drive continuous improvement.

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2014 TSMENVIRONMENTAL

EXCELLENCE AWARDPRESENTED TO DOMINION DIAMOND AND DIAVIKDIAMOND MINE BY THE MINING ASSOCIATION OF

CANADA FOR THE JOINT REGIONAL GRIZZLY BEARDNA PROGRAM.

Dominion Diamond is also a part owner of the Diavik Diamond Mine, which is operated by a subsidiary of Rio Tintoplc. We are fully committed to the sustainable development objectives and programs employed at the Diavik mineand we rely on the operator for their implementation and management. Rio Tinto is also a member of MAC, andparticipates in the TSM initiative.

Assessments of the the Ekati and Diavik mines can be found in the TSM 2015 Progress Report.

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LEADERSHIP AND GOVERNANCEDominion Diamond’s Board of Directors and senior management team share the beliefthat good governance supports the company’s strong performance and long-termsuccess. Good governance provides oversight and accountability, strengthens internaland external processes, and builds trust with stakeholders.

The Board is responsible for the management of the business affairs of the company. It fulfills its responsibilitydirectly as well as through four working committees:

Audit Committee

Nominating and Corporate Governance Committee

Human Resources and Compensation Committee

Health, Safety and Environmental (HSE) Committee

Board members have diverse professional experience, skills, knowledge, and other attributes that are essential forachieving the company’s plans and objectives. Recognizing the benefits that diversity brings to the company, wehave a Board Diversity Policy and we strive to achieve diversity both on the Board and in senior management.

SOCIAL AND ENVIRONMENTAL DEVELOPMENT

The Nominating and Corporate Governance Committee and the HSE Committee assist the Board in fulfilling itsresponsibilities related to social and environmental development.

Within the company, the CEO is responsible for:

Ensuring the implementation of standards and systems to ensure compliance with all applicable regulations andsafety standards

Providing overall leadership to management in support of the company’s commitment to social andenvironmental development and business sustainability

Ensuring that employees, consultants and contractors address, in a respectful and transparent fashion, issuesand concerns of Aboriginal people

Setting the ethical tone for the company and its management

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ETHICS AND BUSINESS CONDUCT

Our Code of Ethics and Business Conduct is written to ensure that directors, officers, and employees understandthe importance we place on ethical conduct. All employees must read the Code and confirm in writing that theyhave done so, and must agree to abide by the terms of the Code as a condition of employment. They have a duty toreport any suspected violations of the Code to their supervisor or the Corporate Secretary (who is the company’s“ethics officer”), or to follow the procedures set out in our Whistleblower Protection Policy.

SUPPLY CHAIN INTEGRITY

Dominion Diamond employees work to ensure that suppliers and contractors understand and comply with ourCode of Ethics and Business Conduct.

We revived the CanadaMark™ hallmark program, a strategic initiative to assure the integrity of the supply chain ofCanadian diamonds from mine to retail. Every CanadaMark diamond is:

Responsibly mined in Canada’s Northwest Territories

Natural and untreated

Tracked through audited processes at every stage, from country of origin to polished stone

Polished to meet specific quality standards

Dominion Diamond is also a member of the Responsible Jewellery Council, which promotes responsible, ethical,environmental and social practices throughout the diamond chain.

Canada’s subscription to the Kimberley Process Certification Scheme (KPCS) and the System of Warranties furtherensures that all diamonds the company sells are of known country of origin and are conflict free.

LEARN MORE

Board of DirectorsBoard Committee ChartersGovernance Documents

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STAKEHOLDER ENGAGEMENTStakeholder engagement is an integral part of our approach to business. It strengthensrelationships, builds trust, and helps us make decisions that are in the best interests ofour business and the region. We want to hear what is important to our stakeholders, letthem know what we are doing, and consider their opinions and concerns in our plans.

At the Ekati mine, we identify our key stakeholders as the Impact Benefit Agreement (IBA) partners, Government ofthe Northwest Territories, employees, northern communities and businesses, customers, and existing andpotential shareholders. These are the groups with whom we work closely and who are most affected by ouroperations. Here’s how we typically engage with them:

STAKEHOLDER GROUP TYPICAL APPROACHES KEY TOPICS

Government of the NorthwestTerritories (GNWT)

Meetings

Mining Industry Advisory Board

Socio-Economic Agreement(SEA) reports

EnvironmentalAgreement

Socio-EconomicAgreement

Permitting

Impact Benefit Agreement partners –the Tłı̨chǫ Government, AkaitchoTreaty 8, North Slave Métis Alliance,and the Hamlet ofKugluktuk/Kitikmeot InuitAssociation

Formal annual meetings

Frequent informal meetingsthroughout the year

Collaboration on TraditionalKnowledge and environmentalmonitoring programs

IBA commitmentsrelated to job creation,business opportunities,communitydevelopment, andenvironmentalstewardship

Co-management boards – MackenzieValley Environmental Impact ReviewBoard and the Wek’èezhìi Land andWater Board

Regulatory processes, includingwritten filings and technical andpublic hearings

Meetings

Workshops

Permitting

New projects

Reclamation plans

Wildlife andenvironment

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Independent EnvironmentalMonitoring Agency (IEMA)

Quarterly meetings

Annual General Meetings (AGM)

Site visits

EnvironmentalAgreement

Water, wildlife, and theland-based way of lifeessential to thewell-being of Aboriginalpeople

Employees Quarterly town hall meetings

Employee newsletter

SharePoint portal notices

Letters and e-mails to employees

Inserts in pay stub envelopes

Business performance

Training

Pay and benefitschanges

Union negotiations

Northern communities Quarterly meetings

Workshops

Site visits

Public presentations

Community newsletter

Wildlife andenvironment

Training andemployment

New projects

Reclamation plans

Northern businesses Quarterly reviews with largestsuppliers

Formal annual meeting withbusiness arms of IBA partners

Business opportunities

Standards andprocesses

Safety

Customers One-on-one meetings Contract terms

Periodic tenders

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Marketing initiatives

Market developments

Shareholders Industry conferences

One-on-one meetings

Analyst meetings

Quarterly conference calls

Mine site tours

Sales, production, andoperationalperformance

Financial performance

Diamond market

Business Chambers/Associations Membership in and engagementwith:

NWT and Nunavut Chamber ofMines

NWT Chamber of Commerce

Yellowknife Chamber ofCommerce

Mining Association of Canada

Mining industry

Northern businessopportunities

Regulatory process

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OUR PRIORITIESIn 2015, we conducted a review of our social and environmental development priorities toensure that we are focusing our efforts and reporting on the topics that matter most toour stakeholders and our business. Our process included interviews with companyexecutives and subject matter experts, and a document review of the priorities of othermining companies with a northern presence.

As a result of this review, we developed a preliminary list of pillars and priority topics, which are discussed in thisreport. The intent is, in time, to align with internationally recognized reporting guidelines such as the GlobalReporting Initiative (GRI) G4 Sustainability Guidelines. This report is a first step towards that goal.

PILLARS PRIORITY TOPICS

Strategy, leadership and governance Leadership and governance

Stakeholder engagement

Community and economic impacts Community engagement and investment

Aboriginal partnerships

People Attracting and retaining employees

Developing our people

Health and safety

Environment Biodiversity impacts

Water stewardship

Energy management

Materials and waste

Reclamation

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DIAMONDS UNLEASHEDDominion Diamond was pleased to announce a strategic partnership with world–renowned jewelry designer Kara Ross. Under this alliance, Ross’s new brand, DIAMONDSUNLEASHED, will only use CanadaMark diamonds in pursuing initiatives surrounding thewomen’s empowerment movement.

DIAMONDS UNLEASHED is a brand with a social purpose to promote and support women’s education andempowerment worldwide. The mission is to engineer a great rethink about how diamonds are bought, given, andperceived, and then to use that shift as a platform to address issues that enable women to achieve their potential.The brand will be brought to life through a collection of jewelry and other products, a powerful network ofinfluential ambassadors, and a platform of compelling content that is educational and engaging. DIAMONDSUNLEASHED has partnered with She’s the First and Girls Who Code and will donate 100% net profits to eachorganization.

“We are delighted that CanadaMark diamonds has found a perfect partner in Kara Ross’s exciting DIAMONDSUNLEASHED brand,” says Jim Pounds, Executive Vice President, Diamonds, Dominion Diamond Corporation. “TheCanadaMark hallmark speaks to excitement, to stunningly beautiful diamonds, but diamonds that also representauthenticity, social responsibility, uniqueness, and fairness. We are excited to work with DIAMONDS UNLEASHED, abrand that reflects our values and which symbolizes, promotes, and supports women’s empowerment worldwide.”

“We are excited to workwith DIAMONDS

UNLEASHED, a brand thatreflects our values and

which symbolizes,promotes, and supportswomen’s empowerment

worldwide.”

JIM POUNDS, EXECUTIVE VICE PRESIDENT,DIAMONDS

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COMMUNITY AND ECONOMIC IMPACTSWhether it is through mining in northern Canada or sorting diamonds in India, we firmlybelieve that we can – and should – contribute to the social and economic well-being ofthe communities near our operations.

Dominion Diamond strives to be a good employer, a good neighbour, and a good corporate citizen. We are deeplycommitted to engaging with local communities, respecting their values and customs, and helping meet their needs.We understand that we must demonstrate the social, economic, and environmental benefits of our presence inorder to maintain the social licence to operate that is critical for success in our industry.

2014 PERFORMANCE HIGHLIGHTS

100% COMPLIANCEWE MET ALL ANNUAL COMMITMENTS UNDER OUR IMPACT BENEFITAGREEMENTS WITH THE TŁĮCHǪ GOVERNMENT, AKAITCHO TREATY 8,NORTH SLAVE MÉTIS ALLIANCE, AND THE HAMLET OFKUGLUKTUK/KITIKMEOT INUIT ASSOCIATION.

62%THE EKATI MINE EMPLOYED 549 NORTHERN RESIDENTS, WHICHREPRESENT 62% OF ITS EMPLOYEES.

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38%DOMINION DIAMOND EXCEEDED ITS TARGET OF 31% NORTHERNABORIGINAL EMPLOYMENT AT 38%. IN ADDITION, ALMOST TWO-THIRDS OFNORTHERN EMPLOYEES WERE NORTHERN ABORIGINAL.

$276 MILLIONEKATI MINE SPENT $276 MILLION THROUGH ABORIGINAL AND NORTHERNBUSINESSES, OF WHICH $79 MILLION (OR 28%) WAS SPENT ON GOODSAND SERVICES OBTAINED FROM NORTHERN ABORIGINAL OWNEDBUSINESSES.

AAATHE MINING ASSOCIATION OF CANADA (MAC) MEASURED DOMINIONDIAMOND’S SUCCESS WITH ABORIGINAL AND COMMUNITY OUTREACH ANDAWARDED US A AAA RATING.

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$1.564 BILLIONTOTAL EXPENDITURES WITH ABORIGINAL

BUSINESSES SINCE 1999, REPRESENTING 25% OFEKATI MINE TOTAL SPENDING.

$5 MILLIONIN 2014, DOMINION DIAMOND CONTRIBUTED OVER

$5 MILLION TO NORTHERN COMMUNITIESTHROUGH IBA PAYMENTS, IBA SCHOLARSHIPS, ANDDONATIONS IN THE NORTHWEST TERRITORIES AND

NUNAVUT.

$5 MILLIONDIAVIK MINE ALSO CONTRIBUTES ABOUT

$5 MILLION ANNUALLY TO LOCAL COMMUNITIESTHROUGH PARTICIPATION AGREEMENTS,

COMMUNITY PROJECTS, DONATIONS, ANDSCHOLARSHIP FUNDING, OF WHICH DOMINIONDIAMOND CONTRIBUTES 40%, OR $2 MILLION.

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COMMUNITY ENGAGEMENT ANDINVESTMENTWhile our obligations to northern communities and people are spelled out in contractualagreements, Dominion Diamond strives to meet both the letter and the spirit of thosecommitments.

ENGAGEMENT

We maintain regular dialogue with communities around our mining operations, recognizing that our presence canbring both opportunities and concerns for residents. It is important to share information on mine operations, newprojects, business and employment opportunities, and wildlife and environmental initiatives. And it is essential tolisten, discuss, and incorporate feedback into our plans and activities.

At the Ekati mine, we are guided by the Ekati Mine Engagement Plan, which outlines well-established activities thatbuild on practices developed during the early days of the mine. We hold regular community and Impact BenefitAgreement (IBA) meetings, workshops, and site visits, and we involve elders and IBA youth in TraditionalKnowledge and environmental monitoring projects. Environmental reports are submitted to the Wek’èezhìi Landand Water Board (WLWB), all of which are posted to the WLWB’s public registry where any party can providecomment or questions.

The main topic of discussion in recent meetings related to the proposed Jay Project. We shared our plans andproject status, conducted site visits, collaborated on studies, and answered questions. A prime example was theTłı̨chǫ What’aa Project, in which Tłı̨chǫ elders studied varying properties of natural eskers close to Mesa Lake toidentify community-based concepts that may be useful in the planning, construction and reclamation of minewaste rock piles.

As part of our commitment to keeping communities informed, both the Ekati mine and the Diavik mine publishannual reports related to their socio-economic performance. The reports are posted to our website and can bedownloaded here:

Diavik Diamond Mine 2014 Sustainable Development ReportDominion Diamond 2014 Socio-Economic Agreement Report

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INVESTMENT

The Ekati mine has commitments under a Socio-Economic Agreement (SEA) with the Government of the NorthwestTerritories that has been in place since 1996, prior to our acquisition of the mine. These commitments relate toemployment, community development, and business opportunities for northerners and northern Aboriginalresidents. Our 2014 highlights are presented below. The Dominion Diamond 2014 Socio-Economic AgreementReport provides performance details.

Employment:

Dominion Diamond employed 549 northern residents, of which 62% were northern Aboriginal, exceeding our SEAtarget of 50%.

Business opportunities:

We strive to maintain positive working relationships with northern contractors to build capacity for northernbusinesses, and to have a positive impact on the northern economy.

Aboriginal-owned businesses and joint ventures have secured numerous contracts at the Ekati mine, includingcontracts for mining services, explosives and blasting supply, catering, transportation services, janitorialservices, as well as freight, cargo, and mail transportation services.

In 2014, Dominion Diamond spent over $276 million in the North, with 28% ($78.6 million) going directly toAboriginal businesses.

The majority of the Ekati mine’s 2014 northern expenditure went into three categories:

Earth moving equipment (through Finning, Sandvik, and Atlas Copco)

Freight, cargo, and mail transport (through BBE, Tli Cho Logistics/Ventures West, Tli Cho Landtran, First Air,and Northcan Freighters)

Underground mining, surface drilling, and blasting services (through Kete Whii/Procon, Polar Explosives,McCaw North Drilling & Blasting, and Major Drilling)

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EKATI MINE 2014 EXPENDITURE BY PRIORITY GROUP

COMMUNITY DEVELOPMENT

Through the Ekati Plus Community Development Program, we provide financial and in-kind support to northerninitiatives that are innovative and have a long-lasting impact on the people and communities of the North. Ourefforts include funding Traditional Knowledge activities in order to promote and support First Nations, Inuit, andMétis heritage; investing in the future of the North by supporting youth education and literacy initiatives; andfunding emergency youth shelters. See page 27 of the Dominion Diamond 2014 Socio-Economic AgreementReport for a list of the groups supported.

In 2014, Dominion Diamond contributed over $5 million to Northern communities through IBA payments, IBAscholarships, and donations in the Northwest Territories and Nunavut.

Diavik Diamond Mine also contributes approximately $5 million annually to local communities throughParticipation Agreements with Aboriginal communities, community projects, donations, and scholarshipfunding, of which Dominion Diamond contributes 40%, or $2 million. See page 25 of the Diavik Diamond Mine2014 Sustainable Development Report for details.

In India, we have a smaller presence than in Canada. Nevertheless, our employees volunteer in the community,and we make donations to community projects, usually by contributing to customers’ initiatives. We recentlycreated a CSR Committee to study the best way for Dominion Diamond to provide support. Through this process,we identified clean drinking water as a community priority that we would like to support on our own, and we aredeveloping a program to meet that goal.

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ABORIGINAL PARTNERSHIPSAs a northern Canadian company, Dominion Diamond’s Aboriginal partners are importantstakeholders and we respect and value their rights, Traditional Knowledge (TK), andcultural heritage.

At the Ekati mine, we have Impact Benefit Agreements (IBAs) for the life of the mine with four groups:

the Tłı̨chǫ Government

Akaitcho Treaty 8

North Slave Métis Alliance

the Hamlet of Kugluktuk/Kitikmeot Inuit Association

The IBAs establish commitments to funding, training, preferential hiring, business opportunities, andcommunications. Since inheriting the IBAs when we took ownership of the Ekati mine, we have worked with ourpartners to explore additional community development initiatives that go above and beyond the originalagreements.

The Diavik Diamond Mine has negotiated private Participation Agreements with five Aboriginal groups:

the Tłı̨chǫ Government

Yellowknives Dene First Nation

North Slave Métis Alliance

the Kitikmeot Inuit Association

the Łutsel K’e Dene First Nation

These agreements provide for mine-related training, employment, business development, and capacity-buildingopportunities. Diavik also has a socio-economic monitoring agreement with the Government of the NorthwestTerritories and the five Aboriginal groups as signatories.

Ongoing engagement, consultation, and collaboration are key to making these relationships work. At the Ekatimine, we hold formal meetings at least quarterly. We have other meetings, workshops, and site visits withleadership, elders, and youth throughout the year to discuss topics such as wildlife and environment, training andemployment, future projects, and reclamation plans. We also directly involve IBA communities in environmentalmonitoring programs in order to effectively align TK into our operations.

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In addition, we have formal, yearly meetings with each of the business arms of our IBA partners, and issueexpression of interest letters, to share upcoming project opportunities. Where possible, we divide work up in orderto give small or inexperienced businesses an opportunity to work on smaller contracts, which allows them to buildcapacity. We also ask businesses to consider forming IBA joint ventures where there is an opportunity for mutualbenefit.

Although the terms of the IBAs and Participation Agreements are confidential, performance details on many of thetopics can found in the Diavik Diamond Mine 2014 Sustainable Development Report and the Dominion Diamond2014 Socio-Economic Agreement Report.

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SCHOOL FUNDING PROGRAMDominion Diamond provides funding to IBA schools for priority initiatives identified bythe schools themselves. “Our commitment to this program represents the optimism wehave in the future of our youth and our desire to help them achieve their goals,” saysRobert (Bob) Overvold, Chief Advisor, Community and Government Relations.

Funding has gone to cultural, literacy, healthy snacks, positive behavioural support, and wellness programs, as wellas the purchase of IT equipment and a school bus, and the expansion of a library.

We recently completed a pilot project with one of our IBA schools, Kugluktuk High School, to provide free cargospace on Dominion Diamond community flights to deliver healthy food to students. We plan to roll out the initiativeto more schools, including Mezi Community School in Whatì, Alexis Arrowmaker School in Wekweètì, and JeanWetrade School in Gamètì.

“Our commitment to thisprogram represents theoptimism we have in the

future of our youth and ourdesire to help them achieve

their goals.”

ROBERT (BOB) OVERVOLD, CHIEF ADVISOR,COMMUNITY AND GOVERNMENT RELATIONS

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SUPPORTING THE ‘SA’ WELLNESSPROGRAMDominion Diamond is pleased to support the ‘SA’ Wellness program at the Łutsel K’e DeneSchool, which uses traditional and non-traditional activities to encourage healthylifestyles, physical activity, and mental wellness.

‘SA’ means sun in Dënesųłiné. It is the hope that the school can become a place where students and communitymembers feel safe, welcomed, and inspired to be successful, much like a sun is the centre of our solar system.

Dominion Diamond’s funding was used to create a mural as well as to purchase new school jerseys and support acultural camp. Łutsel K’e Dene School students partnered with Dënesųłiné artist John Rombough to createbeautiful murals for their school. Rombough said that the students chose to paint winter scenes representative oftheir area – wolves, and a mother and her children playing in the snow – underneath the northern lights andglow-in-the-dark stars.

“There is a lot of talent,” Rombough said. “It’s good to be involved and to help out.” He added that there was a verypositive atmosphere in the creative art class.

The ‘SA’ Wellness program has helped Łutsel K’e students build self-confidence and pride in themselves, theirschool, and their community. Principal Devin Roberts thanked Dominion Diamond Corporation and the Ministry ofEducation, Culture and Employment for their financial support.

“There is a lot of talent. It’sgood to be involved and to

help out.”

JOHN ROMBOUGH, DËNESŲŁINÉ ARTIST

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OUR PEOPLEWhen Dominion Diamond bought the Ekati mine in 2013, we made the decision to locateour head office in Yellowknife. Today, we employ more northerners and northernAboriginal people than any other company in the Northwest Territories.

The Socio-Economic Agreement sets targets for northern and Aboriginal employment at the Ekati mine as a meansof building capacity in the North and contributing to the economic well-being of northern people. There are manygood reasons for building our northern presence and workforce, including the location of our mines in theNorthwest Territories and the fact that Canada is a low-risk jurisdiction compared to other locations globally.

We value the hard work and dedication of all employees, regardless of their roots. However, as guided by our valuesand the commitments we have made, we focus on maintaining a predominantly northern workforce, with anemphasis on strong recruiting, good pay and benefits, excellent training, and creating a work environment wherepeople can achieve personal growth and success.

A large proportion (approximately 40%) of Ekati’s workforce is made up of contractors. Although they are not directemployees of Dominion Diamond, they are treated with the same respect and are expected to uphold our valuesand Code of Ethics and Business Conduct. They participate in many of our employee programs, including healthand safety, internal communications, and select training programs. We often collaborate with contractormanagement teams to support their employment practices and thereby contribute even further to the broadernorthern workforce.

Note: Employees working at the Diavik mine are employed by DDMI, a wholly owned subsidiary of Rio Tinto and theoperator of the Diavik Diamond Mine. Please see the Diavik Diamond Mine 2014 Sustainable Development Reportfor details about Diavik mine employee practices and performance.


1,527DOMINION DIAMOND EMPLOYED 1,527 CONTRACT AND REGULAREMPLOYEES, COMPRISING 468 UNIONIZED AND 454 NON-UNIONIZEDEMPLOYEES AND 605 CONTRACTORS.

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Comprehensive employment statistics are available in the Dominion Diamond 2014 Socio-Economic AgreementReport, beginning on page 32.

250OF THE ALMOST 250 FULL-TIME POSITIONS FILLED BY WOMEN AT THEEKATI MINE (BOTH EMPLOYEES AND CONTRACTORS), 45% ARE NORTHERNABORIGINAL.

44WE ADDED EIGHT NEW APPRENTICESHIP POSITIONS FOR A TOTAL OF24 DOMINION DIAMOND APPRENTICES AND 20 POSITIONS OFFERED BYON-SITE CONTRACTORS AT THE MINE.

5EMPLOYEES STARTED THE NORTHERN LEADERSHIP DEVELOPMENTPROGRAM AIMED AT BUILDING THEIR LEADERSHIP SKILLS.

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1ST PLACETHE EKATI MINE EMERGENCY RESPONSE TEAMPLACED FIRST OVERALL IN THE SURFACE AND

UNDERGROUND EVENTS AT THE TERRITORIAL MINERESCUE COMPETITION.

‘SAFE DAY EVERYDAY’GOLD AWARD

THE ASSOCIATION FOR MINERAL EXPLORATION BCPRESENTED US WITH THE GOLD AWARD FOR

COMPLETING THE 2014 LARGE-SCALE DRILLINGPROGRAM AT THE EKATI MINE WITH ZERO

RECORDABLE INJURIES.

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ATTRACTING AND RETAININGEMPLOYEESAlthough we provide well-paying jobs with ongoing skills development, our location inthe North presents recruitment and retention challenges. We use a variety of strategiesfor addressing these issues.

RECRUITMENT

We focus on hiring northerners and northern Aboriginal people. Our preferential hiring policy gives qualified IBAmembers and northern Aboriginal candidates first priority for jobs. All contract employers are also required topreferentially hire northern and indigenous northern Aboriginal residents when possible.

The company recruits locally through events like community recruitment drives and career fairs. We have also putin place initiatives to expand the mine’s employment candidate base and help northern residents gain skills andeducation for employment in the mining sector. For example:

We partner with the NWT Mine Training Society for the Mineral Processing Operator Trainee Program. Theprogram starts with students attending Aurora College and finishes with a paid work placement at the Ekatimine.

At the Yellowknife Sorting and Valuation Facility, we opened a dedicated diamond training facility for people whohave an interest in learning about diamonds and diamond valuation to improve their job prospects.

We offer scholarships and programs for youth, aimed at advancing their education and preparing them fornorthern jobs.

To fill specialized roles, the company sometimes uses targeted strategies to attract people to the North andencourage northern residency. This has entailed holding recruitment drives in regions where other mines areclosing, as well as offering travel allowances and transition support so that new employees are set up for successand more likely to stay.

RETENTION

Dominion Diamond has a unique workplace in that mining employees generally work two-week, 12-hour shifts atthe mine, followed by two weeks out. Round-trip flights are provided from numerous Aboriginal and regionalcommunities. Creating conditions where people enjoy themselves and can flourish is essential in order to retainthem.

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The starting point is a commitment to treat everyone with respect and dignity, as set out in our Code of Ethics andBusiness Conduct. In addition, the company does not tolerate discrimination of any form, and we respectemployees’ rights to join unions and engage in collective bargaining.

We offer employees:

A safe work environment

Good pay, healthcare benefits and a pension plan

A variety of training and development programs

Robust internal communications, including regular town hall meetings

A commitment to equal opportunity and programs that support women in non-traditional roles

A variety of social, cultural, and wellness activities that support social, physical, and mental well-being

INTERNATIONAL

Outside of the Northwest Territories, India is where Dominion Diamond has its next largest group of employees.There are more than 60 people working in the sorting facility and the numbers are expected to grow. While our corevalues remain the same wherever we operate, employment practices are tailored to the local context.

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DEVELOPING OUR PEOPLEDominion Diamond is strongly committed to enhancing employees’ skills andencouraging professional development in ways that drive personal growth and success,and are beneficial to our business and the North. Here are some examples:

Strengthening the northern and Aboriginal leadership in our company is a priority. We have a robust program forworking with our Aboriginal employees to provide the training needed for positions of higher responsibilitywithin the company.

Apprenticeship programs help northern residents gain the skills, knowledge, and hands-on experience needed toexcel in their path toward journeyperson status. The Ekati mine offers apprenticeships in the areas of carpentry,millwrighting, plumbing, mobile crane operation, machining, electrical, warehousing and parts, and processcontrol and instrumentation. We have also collaborated with contractors like Finning to put in place contractorapprenticeships in parts, welding, and mechanics. In 2014, we added eight new apprenticeship positions for atotal of 24. This is in addition to the 20 positions offered by on-site contractors at the mine.

The Northern Leadership Development Program (NLDP) is sponsored by Aurora College and supported by theMine Training Society and the Ekati and Diavik mines, as well as the Snap Lake mine prior to 2015. The eight-module program provides opportunities for employees to develop their leadership skills. It is open to all staff,with preference given to members of our IBA groups and northern residents. Five Dominion Diamond employeesstarted the program in September 2014.

SKILL LEVEL OF NORTHERN EMPLOYEES AND CONTRACTORS

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HEALTH AND SAFETYFor Dominion Diamond, safety is a value rather than a priority. While priorities change,values are ingrained and constant. A goal of zero harm drives our health and safetyculture.

We recently introduced an integrated health, safety, and environment management system (HSEMS) to meet ourgoals and requirements under ISO 14001 and OHSAS 18001. The HSEMS is a series of management processes thatprovide a framework for ensuring that tasks are performed consistently, correctly, and effectively to drivecontinuous improvement in health, safety, and environmental performance.

SAFETY

Progress toward zero harm is measured using the North American standard of All Injury Frequency Rate (AIFR), anew metric introduced in 2014 that covers lost time injuries, restricted work duties, and medical treatment cases.Our 2014 results were disappointing – we achieved a 1.24 AIFR versus a target of 0.76. The most common injurieswere soft tissue injuries like cuts, scrapes and bruises, followed by strains and sprains.

In order to shift our safety culture in a new direction, we began implementing a behavioural-based safety programcalled the Zero Incident Process (ZIP). Taught by industrial psychologists, and led by 10 certified DominionDiamond group facilitators, the program aims to change the way people think about safety. By giving employeesthe tools to take control of their thoughts and feelings, they will learn how to make safe choices. Employeeengagement sessions began in the fall of 2014 and continued over a two-year period. We achieved our goal ofhaving at least 90% of our workforce trained in the program.

HEALTH AND WELLNESS

At the Ekati mine, two site-based coordinators are responsible for the Ekati Wellness Program. This diverse andadaptive program was created with the vision of promoting physical, emotional, and mental health awarenesswhile preventing injuries and workplace illness, and reducing absenteeism. Dominion Diamond also offers anannual Wellness Subsidy Program to enable office-based employees to participate in activities designed toencourage well-being through fitness.

At the recreation facility, the wellness coordinators offer several options to promote physical health such asindividualized programs, personal training, weight room orientations, and nutrition consultations, as well as groupfitness formats including boot camps, indoor cycling, and yoga.

In addition to physical activities, the program hosts regular cultural activities to promote social and mentalwell-being. These events include hand game tournaments, music nights, traditional crafts, and Aboriginal Daycelebrations.

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In 2014, the mine Health and Safety team, in collaboration with the GNWT Department of Health and SocialServices, introduced the Working on Wellness program. The goal is to reduce preventable cancers and other chronicdiseases such as diabetes and cardiovascular disease, through comprehensive workplace education and wellnessinitiatives. The program focuses primarily on physical activity, nutrition, mental health, tobacco cessation, andsun/UV protection. It also covers routine health topics and activities designed to promote awareness of overallhealth and wellness.

Because the Ekati mine is an industrial workplace, we monitor our employees for long-term occupational healthrisks. Monitoring programs focus on diesel particulate, silica, welding fumes, and noise levels. Medical surveillanceprograms include pulmonary (lung) and audiometric (hearing) testing.

EMERGENCY PREPAREDNESS

Given the risks associated with mining, Dominion Diamond has robust emergency response and crisis managementcapabilities. The Emergency Response Team (ERT) at the Ekati mine is a dedicated team of volunteer employeeswho are professionally and competently trained to protect our workforce during emergencies. Each new membercompletes an intense five-day program that includes theoretical and practical testing of emergency response andmine rescue techniques. Training time is crucial for the competency of our ERT members. The Workers’ Safety andCompensation Commission (WSCC) requires a minimum of 48 hours of ERT training per year; at DominionDiamond, our policy is a minimum of 72 hours.

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SUPPORTING OUR APPRENTICESIn continuing to build and strengthen our workforce, Dominion Diamond added eightnew apprenticeship positions in 2014 for a total of 24. This is in addition to the 20positions offered by on-site contractors at the Ekati mine.

To ensure the success of existing apprentices as well as others interested in developing their skills, we alsoreinstated the site-based role of Adult Educator. Barb Curtis, a long-time northern resident with a rich history ofworking in various communities, was hired to fill the role. As she sees it: “This role will help build sustainabilitybecause the skills learned can be taken back to communities.”

While all apprentices have a minimum of a grade 10 education, some may lack the necessary school-basedknowledge. With the help of the Adult Educator, these men and women are able to overcome the barriers thatmight otherwise keep them from completing their apprenticeships and achieving journeyperson status. Barb Curtisworks one-on-one with each apprentice to assess their math, language, and computer skills, and prepare them forthe classroom. She also maintains regular contact with the apprentices and provides ongoing support.

Looking to the future, we hope to expand the program to offer other essential skills like banking, budgeting, andeducational upgrading.

“This role will help buildsustainability because theskills learned can be taken

back to communities.”

BARB CURTIS, ADULT EDUCATOR

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MUTUAL AID EXERCISEIn order to thoroughly test our emergency response systems and provide realistictraining, an underground mock disaster exercise was held at the Ekati mine in February2014.

Together with teams from the Diavik and De Beers’ Snap Lake mines, this training exercise was the largest mutualaid exercise ever held in the North. Eighty-five people from the three mine sites participated in the emergencyresponse portion of the exercise, which lasted more than eight hours.

“From this exercise, more than 60 areas for improvement and points of learning were identified, providing valuabledirection for our emergency teams in 2015,” says Mike Lowing, Head of Health and Safety.

“From this exercise, morethan 60 areas for

improvement and points oflearning were identified,

providing valuabledirection for our emergency

teams in 2015.”

MIKE LOWING, HEAD OF HEALTH AND SAFETY

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THE ENVIRONMENTThroughout the mining process, Dominion Diamond keeps the land and water of themining area clean and safe for people, plants, and animals. We understand theimportance of the Arctic tundra environment and we are committed to mining in thesafest, most environmentally responsible way.

The Ekati mine operates under several environmental permits and agreements guided by different regulatorybodies:

Type A Water Licence issued by the Wek’èezhìi Land and Water Board

Environmental Agreement between the Government of the Northwest Territories and the company

Four Fisheries Authorizations issued by Fisheries and Oceans Canada

282 mining leases; eight surface leases; and five Class A Land Use Permits, including two granted in 2014: one forwinter drilling exploration and road construction and the other for Lynx Pit and associated mining activities

To fulfill the terms of these environmental responsibilities, many environmental monitoring programs areconducted every year. Monitoring programs in 2014 included: air quality monitoring, aquatic effects monitoring,reclamation monitoring, Pigeon Stream diversion monitoring, wildlife effects monitoring, as well as a surveillancenetwork program, and a waste rock and waste rock storage area seepage survey.

A full-time Advisor for Traditional Knowledge is employed by the company to liaise with Aboriginal communities,seeking meaningful engagement with elders and youth around mine site operations and programs like the WildlifeEffects Monitoring Program and the Community Engagement Program. Both programs were designed to providehands-on experience with the mine’s environmental monitoring programs. Elders, youth, and land users alsoactively participate in wildlife observations, behavioural scans, and site surveys, and provide valuable input onenvironmental programs.

As part of its commitment to the environment, the Diavik mine is a signatory to an environmental agreement withlocal Aboriginal groups and the federal and territorial governments.

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2.1%THE EKATI MINE FOOTPRINT IS JUST 2.1% OF THE TOTAL AREA COVEREDUNDER THE LAND LEASES FOR THE MINE.

2.75 HECTARESRECLAMATION OF THE CONSTRUCTION CAMP USED BEFORE THE EKATIMINE WENT INTO PRODUCTION COVERED 2.75 HECTARES.

7.5%DIAVIK MINE’S TURBINE WIND FARM REDUCED THE MINE’S CARBONFOOTPRINT BY 7.5% AND TOTAL DIESEL CONSUMPTION BY 4.9 MILLIONLITRES.

TSM ENVIRONMENTALEXCELLENCE AWARDPRESENTED BY THE MINING ASSOCIATION OF CANADA, DOMINIONDIAMOND AND DIAVIK DIAMOND MINE WON THE AWARD FOR THEIR JOINTREGIONAL GRIZZLY BEAR DNA PROGRAM.

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98%ALMOST ALL OF THE WATER USED AT THE EKATI

MINE IS RECYCLED FROM THE LONG LAKECONTAINMENT FACILITY.

250,000 LITRESEKATI MINE’S COMPOSTING UNIT REDUCES SITE

DIESEL CONSUMPTION BY AN ESTIMATED250,000 LITRES EVERY YEAR AND PREVENTS UP TO

680 TONNES OF GHG EMISSIONS.

LEARN MORE

Ekati Diamond Mine Environmental Agreement and Water Licence Annual Report Summary 2014Diavik Diamond Mine 2014 Sustainable Development Report

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BIODIVERSITY IMPACTSBy the very nature of our business, we depend on the natural environment, and we mustdo what we can to protect it.

LAND DISTURBANCES

In 2014, about 52 hectares of land and water were disturbed at the Ekati mine site due to mine development andoperations. As a result, the current total mine footprint now stands at 3,294 hectares. The amount of annual habitatloss has decreased over the years, as most habitat loss occurred during initial construction of the mine.

The Ekati mine footprint is 2.1% of the total area covered under the land leases for the mine. As mining activitiesprogress, some areas are reclaimed once mining in that area comes to a close. Other areas will be returned to anatural or productive state once the mine is closed.

WILDLIFE MANAGEMENT

Dominion Diamond conducts a variety of wildlife management activities where actual or possible interactions maypose a safety risk to animals or humans. Here are two examples:

Traffic mitigation efforts are aimed at reducing wildlife interactions with vehicle or air traffic. In 2014, there were19 vehicle-related wildlife deaths around the mine site – down from 26 deaths recorded in 2013. The affectedwildlife included foxes, hares, ground squirrels, waterfowl, and muskrats. There has not been a caribou fatalityfrom interactions with traffic at the Ekati mine. We post speed limits, communicate road closures site-wide,educate staff about wildlife safety and ensure that wildlife is always given the right-of-way. Inokhoks, orinukshuks (traditional rock structures), are also used to deter wildlife from approaching high traffic areas. Thesafety of caribou herds is ensured through visual monitoring, temporary road closures, site-wide notifications,and wildlife signage.

Waste from the mine site is carefully managed to keep materials that might attract or harm wildlife out oflandfills. Proper disposal of waste is an ongoing challenge that staff takes seriously. Inspections are regularlyperformed on waste bins and the landfill to ensure that waste is being disposed of correctly. Regular employeeeducation sessions are conducted to stress the dangers posed to wildlife and mine personnel from improperlydisposed waste.

WILDLIFE MONITORING

Our Wildlife Effects Monitoring Program focuses on animals that are considered to be particularly important orhave special conservation status. The program looks at the effects mining activities can have on the health of theseanimals and helps scientists determine how best to minimize these impacts.

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We track sightings of caribou, grizzly bears, wolves, foxes, wolverines, and nesting birds, and report our findings inthe Ekati Diamond Mine Environmental Agreement and Water Licence Annual Report. A plain language summary ofthe 2014 Annual Report can be accessed here.

Caribou are the most abundant and wide-ranging large mammals in the Arctic and are an important food source forthe Dene and Inuit people. Caribou herds generally pass through the Ekati mine area twice a year. An estimated1,508 caribou were counted in the area in 2014, among the lowest recorded since observations began in 2006. TheLong Lake Containment Facility was surveyed on 78 separate days, and caribou were observed once. Evidence fromcaribou tracks and observed behaviour suggest that processed kimberlite does not affect caribou movement, nordoes it appear to attract caribou.

In 2012 and 2013, we participated in the Joint Regional Grizzly Bear DNA Program, designed to assess bearpopulation trends and determine if mining-related activity has influenced the relative abundance and distributionof grizzly bears over time. The program was awarded the 2014 TSM Environmental Excellence Award (see casestudy). We also completed a four-year DNA study of wolverine numbers and movement in 2011.

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WATER STEWARDSHIPSince one-third of the Ekati mine claim block is covered with water, water quality is anespecially important part of the overall environmental monitoring program at the mine.

The amount of water that we can take from lakes and streams for road watering (to keep down the dust) and to usein camps is set out in the mine’s water licence, which is directed by the Wek’èezhìi Land and Water Board. The waterlicence also controls the quality of the processed water the company can return into the environment. The vastmajority of water used at the mine (around 98%) is recycled from the Long Lake Containment Facility.

According to the current water licence, the Ekati mine must have two programs to monitor the quality of the waterreleased from the Long Lake Containment Facility or King Pond Settling Facility into the downstream lakes: theSurveillance Network Program and the Aquatic Effects Monitoring Program. Runoff from the waste rock storagepiles also requires monitoring. Monitoring of the receiving environment as a result of the Pigeon Development wasalso required, with the completion of the Pigeon Stream Diversion Channel and initiation of Pigeon Pitdevelopment.

The Surveillance Network Program monitors the quality of water used for mining activities that is eventuallyreleased back into the environment. Scientists collect water samples from 22 sites identified in the water licence. Ifwater from two discharge points does not meet the guidelines established by the water licence, it cannot bereleased into downstream lakes or used for road watering. The 2014 sample program met all water licencerequirements.

The Aquatic Effects Monitoring Program looks for changes in the aquatic environment downstream from themine, such as slight increases in the levels of salts and metals, which could affect water quality or aquatic life. Theprogram serves as an early warning system and allows us to address water quality changes before they becomelarge enough to have a negative effect. See the Ekati Diamond Mine Environmental Agreement and Water LicenceAnnual Report posted to the Wek’èezhìi Land and Water Board website or the plain language summary.

The Waste Rock Storage Area Seepage Survey monitors water that drains over waste rock piles and may pick upcontaminants as it touches this material. Waste rock storage areas contain both waste rock and coarse kimberlitefrom the processing plant. Without a carefully designed management plan and monitoring programs,contaminants may enter the environment through waste rock seepage. During 2014, scientists collected 25samples from various areas. Analyses of these samples indicated that waste rock seepage was not having anegative effect on the environment and revisions to the current Waste Rock Management Plan are not necessary.

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ENERGY MANAGEMENTDominion Diamond recognizes the impact that climate change is having on the northernlandscape. We are focused on taking steps to reduce greenhouse gas (GHG) emissionsand improve energy efficiency, as we work to protect the northern environment and be aresponsible partner with the communities.

An Energy Management Committee was formed at the Ekati mine with representatives from the environment,maintenance, infrastructure, business improvement, electrical services, facilities, and process departments. Its goalis to ensure that effective and efficient energy use remains part of the way Dominion Diamond does business.

The Committee meets regularly to seek out ways to reduce energy use and GHG emissions. Twenty-four priorityprojects have been identified, and work is underway on many of them. Here are some examples:

Industrial composting unit – Dominion Diamond was the first northern mine to start composting a significantportion of waste when an industrial composting unit was brought online. The composter provides a safe,environmentally friendly, and cost-effective method for organic waste disposal. This single initiative could reducediesel consumption at the mine by 250,000 litres every year and prevent up to 680 tonnes of GHG emissions fromentering the atmosphere. Organic material spends nine to 10 days in the unit, turning once per hour, beforeemerging as safe, odour-free and nutrient-rich material. This material is then laid out in a fenced-off designatedarea for up to one year before being used for remediation.

Truck efficiency – We introduced road trains, which involve multiple trailers carrying ore pulled by a combinationof a road haulage tractor and a powered trailer, thereby improving efficiency and reducing emissions.

Alternative energy – We plan to conduct a concept study of additional potential investments in alternative energy,including wind and solar energy. The company committed to presenting a summary of results of the concept studyto the Mackenzie Valley Environmental Impact Review Board within one year of the Report of EnvironmentalAssessment of the Jay Project, which was issued on February 1, 2016. Dominion Diamond also paid 40% of the costof the wind farm at the Diavik Diamond Mine, of which Dominion is a 40% owner.

Power generation efficiency – Powerhouse heat recovery system efficiency has been improved to capture morewaste heat from the engines. This in-house improvement has reduced our reliance on boilers to produce heat formain camp and outbuildings and, in turn, has reduced GHG emission levels.

In 2014, GHG emissions at the Ekati mine totalled close to 200,000 tonnes – an increase of 2.4% from 2013 levels.The increase was largely due to increased fuel usage related to Misery Pit activity. GHG emission totals are based onthe amount of fuel consumed, and the amount of waste burned at the mine.

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AIR QUALITYScientists regularly test air quality to determine if mining activities at the Ekati mine, suchas blasting, construction, and operating diesel generators and vehicles, are affecting airquality.

We monitor air quality annually and issue an Air Quality Monitoring Report every three years that discusses various aspects of air quality. The Air Quality Monitoring Report includes results of snow and lichen monitoring.

Air quality monitoring stations sample air for tiny particles, dust, sulphur dioxide, and nitrogen dioxide year-round. The sampling results from 2014 were almost always within government guidelines. The quality of snow and lichen samples was slightly lower than that of 2008 and 2011, but higher than that of 2005.

Results from the 2012 to 2014 Air Quality Monitoring Program suggested that our efforts to mitigate the effects of the mine on air quality are effective.

Dominion Diamond is committed to the continual improvement of its environmental practices. To ensure we are making progress in the area of dust management, the company committed to conducting a pilot study in 2015 comparing the effectiveness of various dust suppression products. The results of that study will be available shortly.

9.2 MEGAWATTDIAVIK’S 9.2 MEGAWATT FOUR-TURBINE WIND FARMREDUCED THE MINE’S CARBON FOOTPRINT BY 7.5%

(THE EQUIVALENT OF 14,068 TONNES OF CO2E) IN2014 AND PROVIDED 11% OF THE MINE’S POWER

NEEDS.

THE WIND FARM, WHICH IS OPERATIONAL TO -40ºC,REDUCED TOTAL 2014 DIESEL FUEL USE BY

4.9 MILLION LITRES.

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MATERIALS AND WASTEThe Ekati mine has a waste management plan to reduce, reuse, recycle, and disposeresponsibly of the waste it generates.

In 2014, more than four million tonnes of kimberlite ore were processed in the process plant and more than13 million tonnes of waste rock (mined rock that does not have economic value) were deposited into waste rockstorage areas. Coarse processed kimberlite material was used as landfill cover, while fine processed kimberlite,mine sump water, treated sewage, and process plant effluent were deposited into the Long Lake ContainmentFacility. Fine processed kimberlite and mine water from underground operations were deposited into BeartoothPit.

Most water used at the Ekati mine is sent to one of two containment facilities – these are lakes that hold water usedin mine activities until the suspended solids can settle and the clean water can be released back into theenvironment. The majority of mine water goes into the Long Lake Containment Facility. Water from that facility isthen discharged into Leslie Lake. Mine water is also deposited into the King Pond Settling Facility and later used tosuppress road dust. Prior to discharge, water quality must meet the criteria set in the water licence. All waterdischarged from the containment facilities in 2014 met the requirements.

At the Ekati mine, most of our food and office waste was incinerated on-site. We are now pleased to be the firstnorthern mine to purchase and commission an industrial composting unit that provides a safe, environmentallyfriendly, and cost-effective way for disposing of organic waste. The unit breaks down food waste, paper, andcardboard, reducing diesel consumption at the mine by an estimated 250,000 litres every year and preventing up to680 tonnes of GHG emissions. Organic material spends up to 10 days in the unit, turning once per hour, beforeemerging as safe, odour-free, nutrient-rich material. This material is then laid out in a fenced-off area for up to oneyear before being used for remediation.

Hazardous waste such as oily rags, aerosol cans, waste grease, oil, and fuel filters is collected and sent off-sitewhere it is combined with similar waste from other facilities.

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RECLAMATIONReclamation is an important part of our operations now, even while we are still mining.Dominion Diamond understands the importance of reclaiming the mine sites so that theycan be returned to a viable northern environment at the end of operations. The goal ofreclamation is to keep the site safe for human and wildlife use.

Long-term reclamation plans are in place, to prepare for the eventual closure of the Ekati mine. The idea is to“clean up as we go,” which is referred to as progressive reclamation. We are doing this through projects such ascontouring country rock piles to create safe access routes for caribou, creating new fish habitats, and conductingre-vegetation studies (see case study).

In 2014, reclamation at the Ekati mine focused on the Old Camp reclamation, the Panda diversion channel slopestabilization, Koala Underground reclamation, and ongoing re-vegetation and topsoil salvage.

Reclamation of the area that hosted the construction camp used before the Ekati mine went into production,known as the Old Camp, began in July 2014 and ended in October 2014. Reclamation activities included removal ofremaining pond water, processed kimberlite, and liner material. New materials were then graded and shaped toallow for drainage. Water in the area will be monitored through 2015 to ensure reclamation activities meet theirenvironmental objectives.

Progressive reclamation is being conducted in the Koala Underground as mining areas are completed. In 2014, fourareas of the Koala Underground were completed and reclaimed. Reclamation activities included the removal ofhazardous waste materials, debris, and any materials that have salvage value.

Reclamation of the Panda Underground workings and Koala North open pit had been previously completed.Hazardous materials such as fuel and oils, batteries and explosives, and electrical equipment were removed fromthe areas and sent to appropriate facilities. All debris, garbage, and materials that could be used elsewhere at theEkati mine, were also removed.

Progressive reclamation is also an important part of the Jay Project. The research currently being conducted at thesite will help in achieving this goal. Dominion Diamond is committed to working with community groups on theplanning of future reclamation projects at the mine site.

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GRIZZLY BEAR DNA PROGRAMDominion Diamond and Diavik Diamond Mines jointly won the Towards SustainableMining Environmental Excellence Award in May 2015 for the Regional Grizzly Bear DNAProgram in the Northwest Territories. The project was designed to find out if mining-related activity has affected the presence of grizzly bears over time.

Traditional Knowledge was sought from community elders and land users for the design and placement of posts,which were used to gather grizzly bear hair samples for DNA analysis. A total of 1,902 hair samples were collected in2012, and 112 grizzly bears were identified. In 2013, the number rose to 4,709 samples and 136 grizzly bears wereidentified, 39 of which had no previous detections.

The project was the largest grizzly bear DNA program in the Northwest Territories. The results of the study indicateda stable or increasing bear population in the region.

CEO Brendan Bell commented, “Dominion Diamond takes our responsibility to the environment, wildlife, and thesurrounding communities seriously, and it is gratifying to be recognized for those efforts at a national level.”

“Dominion Diamond takesour responsibility to the

environment, wildlife andthe surrounding

communities seriously, andit is gratifying to be

recognized for those effortsat a national level.”

BRENDAN BELL, CEO

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CLEAN WATER PROJECTIn India, providing clean drinking water to more than 700 million people living in ruralcommunities is a tremendous challenge. It is estimated that 37.7 million people areaffected by waterborne diseases annually, and diarrhea due to contaminated water is oneof the leading causes of death among children.

Recognizing the enormous need, Dominion Diamond India’s CSR Committee decided to make clean water the focusof its financial support and efforts. “We felt it was a good fit,” says Jim Pounds, Executive Vice President, Diamonds.“We have so much clear, pure water in the North and we value it so highly. We want to help bring safe drinkingwater to communities near our Indian operations as well.”

The Committee plans to partner with government bodies, district authorities, non-governmental organizations(NGOs), village authorities, and other experts to make a meaningful contribution. We are also looking foropportunities to send some of our Canadian employees to India to help out on clean water projects.

“We want to help bring safedrinking water to

communities near ourIndian operations.”

JIM POUNDS, EXECUTIVE VICE PRESIDENT,DIAMONDS

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RECLAMATION RESEARCH STUDYAt the Long Lake Containment Facility (LLCF), work is underway to research the best wayof reclaiming the area. This involves arranging rocks and plant life in a variety of patternsto determine which pattern allows the vegetation to grow best, and which offersprotection from erosion. Combined with assistance from community members andelders, some scientists and technicians from the Environment and Traditional Knowledgeteams at Dominion Diamond are looking into what kind of vegetation may work best.

According to Lukas Novy, Senior Environmental Advisor for Dominion Diamond, “The use of vegetation in the finalcover system will enable a more economical cover design and blend into the natural tundra landscape.”

Similar to the sections of a garden, the test areas have been seeded with various configurations of native grasses todevelop an initial ground cover. The types of grass include alkali grasses, annual cover crops, seedlings, and grassseeds.

The rock within the test areas has also been placed in various configurations in order to evaluate its role invegetation growth and erosion control. A total of 25 hectares has been seeded since fall 2013 and earlyobservations indicate positive results on the establishment of a ground cover.

“The use of vegetation inthe final cover system willenable a more economical

cover design and blend intothe natural tundra

landscape.”

LUKAS NOVY, SENIOR ENVIRONMENTAL ADVISOR

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