Sourcing

Dominion Diamond Completes Sale of Ekati Mine

SourcingFeb 09, 2021

Dominion Diamond Completes Sale of Ekati Mine

A new entity called Arctic Canadian Diamond Company Ltd. now owns the mine as well as a nearby diamond exploration project.

2017_Ekati-Underground.jpg
This file photo shows workers in the underground portion of the Ekati Diamond Mine in Canada’s Northwest Territories. The mine recently reopened after a pandemic-induced shutdown that was complicated by the sale of its parent company, which was finally completed last week. (© 2017 Dominion Diamond Mines)

Calgary, Alberta—Dominion Diamond Mines has completed the sale of the Ekati mine and an associated diamond exploration project in Canada’s Northwest Territories.

The Canadian mining company announced completion of the sale, which was OK’ed by the Alberta Court of Queen’s Bench in December, to DDJ Capital Management, Brigade Capital Management and Western Asset Management Company last week.

Together, the companies have formed a new entity, Arctic Canadian Diamond Company Ltd., that now owns all of Dominion’s assets, excluding its interest in the Diavik Diamond Mine.

It also owns the Lac de Gras Diamond Project, an exploration site located just south of Ekati and Diavik.

The company will have offices in Canada and Belgium, and, a spokesperson confirmed, will continue to market its diamonds using the CanadaMark hallmark.

In exchange, Arctic assumes Dominion’s various debts to its creditors, employees, suppliers, and surety bond holders, including the $70 million the company owes under its existing revolving credit agreement, and the reclamation obligations of the Ekati mine.

DDJ Capital, Brigade and Western Asset will also provide Arctic with a new $85 million fully funded working capital facility that ranks behind the first-lien lenders.

Dominion Chief Financial Officer Kristal Kaye said the sale significantly reduces the miner’s debt obligations while providing sufficient liquidity to fund operations and invest in future growth.

Dominion filed for insolvency protection in April, citing the disruption COVID-19 caused to the diamond market.

It originally announced a plan to sell itself to affiliates of its current owner, The Washington Companies, but that deal fell through in the fall. News of the new deal with the wealth management firms surfaced in December.

Ekati has been closed since March 2020, with only a skeleton crew remaining on site after Dominion put the mine into care and maintenance mode.

The company began a 10-week phased reopening in November, recalling about 60 of the mine’s 1,000-plus workers, and returned to full operations on Jan. 20.

It said last week it anticipates recalling all employees by Feb. 25.

“We are excited to have our employees back at work and to have Ekati in full production again,” Interim President Rory Moore said in the release announcing completion of the sale.

“We are also very grateful to our new owners for the commitment they have demonstrated to Ekati and its stakeholders. This new partnership will bring fresh perspectives to our operations and be the driving force

behind our continued growth.”
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.
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