North

Bid accepted to exit creditor protection and restart Ekati Diamond Mine

The owner of the Ekati Diamond Mine in the Northwest Territories says it plans to return the suspended project to full operating status after accepting a 'stalking horse bid' by an affiliated buyer to allow it to exit court protection from creditors.

Owner of N.W.T.-based mine plans to return to full operating status after 'stalking horse bid'

The owner of the Ekati Diamond Mine in the Northwest Territories says it plans to return the suspended project to full operating status after accepting a 'stalking horse bid' by an affiliated buyer to allow it to exit court protection from creditors. (Dominion Diamond Corporation)

The owner of the Ekati Diamond Mine in the Northwest Territories says it plans to return the suspended project to full operating status after accepting a "stalking horse bid" by an affiliated buyer to allow it to exit court protection from creditors.

Dominion Diamond Mines ULC says the bid submitted by Canadian Diamond Holdings, LP and CA Canadian Diamond Mines ULC, affiliates of the Washington Companies, was the only qualified bid made under a sales process approved by the Court of Queen's Bench of Alberta.

The bid for about US$126 million (C$166 million) in cash provides for the purchase of substantially all of Dominion's assets related to Ekati and the assumption of Ekati-related operating liabilities, which includes offering employment to Dominion's employees and the assumption of pension obligations.

The bid is subject to a number of conditions, including approval by the court and reaching agreement with the N.W.T. government on security for reclamation obligations.

Dominion filed for creditor protection in April. The company said it could not pay its debts — including to the creditors who financed the purchase — because the COVID-19 pandemic has essentially shut down the diamond industry.

Dominion says the return to full operations at Ekati would occur after completion of the transaction, expected Nov. 7, as well as a successful recovery of global diamond sales markets.

Dominion's 40 per cent stake in the Diavik mine operated by rival Rio Tinto, located near Ekati about 300 kilometres northeast of Yellowknife, is not included in the deal.

With files from CBC North

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