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Dominion Diamond Corp. is getting out of Toronto real estate and going ahead with a key expansion to its Ekati mine in the Northwest Territories.

As part of a flurry of moves designed to reverse its sliding share price, Dominion Diamond Corp. is getting out of Toronto real estate and going ahead with a key expansion to its Ekati mine in the Northwest Territories.

The diamond producer said on Wednesday that it would proceed with development of the Jay deposit, located about 25 kilometres from the main Ekati camp. It also announced that it would sell its eight-storey office building in downtown Toronto, buy back up to 7.2 per cent of its outstanding shares and look for opportunities to bolster its dividend, which is already providing investors with a yield of more than 4 per cent.

Dominion shares lost about 30 per cent of their value over the past year as prices for diamonds tumbled. Reduced buying, particularly in Asia and the Middle East, has prompted giant producers, such as De Beers and Alrosa of Russia, to slow their production or hold back supply in recent months.

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Despite the diamond slump, Dominion said on Wednesday that it decided to go ahead with the Jay project, its most significant undeveloped deposit, because it expects the market for lower-priced stones to improve rapidly in coming years.

Rio Tinto's big Argyle mine in Western Australia is slated to cease production in 2021. Its closing is likely to create shortages of affordable, mass-market gems– the type sold by Jared rather than Tiffany. By starting development work now, Dominion hopes to have Jay in production by 2022, ready to help meet the expected demand.

"The timing of Jay production, beginning in 2022 and running through 2033 takes advantage of a growing gap …particularly for the type of goods that Jay will be producing," Brendan Bell, chief executive of Dominion, told a conference call.

The company also announced that Ron Cameron, its chief financial officer, will be leaving the company. Mr. Bell said in an interview that Mr. Cameron's departure did not reflect any difference in strategic vision, but rather the evolving nature of the CFO job at Dominion. In the future, the job is expected to involve more contact with Bay Street as well as working on possible mergers and acquisitions. "We're in discussions to keep [Mr. Cameron] on in a consulting role," Mr. Bell said. "It's a very amicable departure."

Development of the Jay project will involve about $680-million (U.S.) in capital expenditures, according to a company presentation. It will benefit from being able to use existing infrastructure at Ekati.

When finished, the project will also provide Dominion with a platform for further development of other properties in the area. But fundamentally the decision to proceed is premised on the belief that the diamond slump is not going to get worse.

Mr. Bell said relatively stable demand from U.S. consumers provides the market with a firm base, despite weakness in China. "We feel we're at a stable place right now. Historically, growth in diamond prices has gone pretty much in line with U.S. GDP growth."

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He expects diamond prices to increase by 2 to 2.5 per cent a year until 2021, before beginning a more rapid increase.

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