Dominion Diamond Mines sells Ekati mine to Arctic Canadian Diamond Company Ltd.
Employees expected back to work no later than Feb. 25, says Dominion Diamond Mines
Dominion Diamonds Mines has completed the sale of the Ekati Diamond Mine and associated assets to Arctic Canadian Diamond Company Ltd.
In a news release sent Wednesday night, Dominion announced that Arctic Canadian Diamond Company has acquired substantially all of Dominion's assets, not including Dominion's interest in the joint venture agreement and liabilities relating to the Diavik Diamond Mine.
Arctic is a company formed and owned by funds and accounts managed by DDJ Capital Management, Brigade Capital Management, LP and Western Asset Management Company, LLC.
The company has also assumed $70 million US of Dominion's outstanding debt "under its existing revolving credit agreement and the reclamation obligations of the Ekati mine," according to the release.
The sale was approved by the Alberta Court of Queen's Bench, pursuant to an order issued on Dec. 11, 2020, according to the release.
Arctic will get a new $85 million US of fully funded working capital facility ranking behind the first lien lenders, the release states.
"This transaction significantly reduces our debt obligations, and provides sufficient liquidity to fund our operations, invest in future growth and allow the Company to emerge with a materially stronger balance sheet," Kristal Kaye, chief financial officer for Dominion, said in the release.
In March 2020, Dominion suspended operations at the Ekati mine in response to the pandemic. Dominion initiated a 10-week phased restart in Nov. 2020, the release said, and returned to full operations last month.
A full recall of employees back to work is expected to be completed no later than Feb. 25, said the release.
"We are excited to have our employees back at work and to have Ekati in full production again," Rory Moore, interim president of Dominion, said in the release.
"We are also very grateful to our new owners for the commitment they have demonstrated to Ekati and its stakeholders," said Moore.
Hope for a renewed relationship
With the Ekati Diamond Mine under new ownership, there's some hope in Yellowknives Dene First Nation for the start of a fresh relationship.
Ndilo Chief Ernest Betsina says he's cautiously optimistic that the Arctic Canadian Diamond Company will more actively consult with First Nation governments.
Betsina says Dominion's relationship with Yellowknives Dene First Nation was near "non-existent."
"We would never really meet with [them]," he said, adding that the First Nation mainly talked to managers at the mine.
Betsina said he would like the new owners to meet with Yellowknives Dene First Nation with a plan for how they will engage with First Nations and develop "strong working relationships."
Betsina said he will work with the new owners to ensure that the interests of his members are heard.
When asked for comment, a spokesperson with the Arctic Canadian Diamond Company wrote in an email that "our relationship with our [impact and benefit agreement] communities and the North is very important to Arctic Canadian Diamond Company Ltd. As we emerge from the sale we will be working to connect with these important stakeholders on an ongoing basis."
With files from Hannah Paulson