Dominion Diamond reaches deal to sell Ekati Mine in Canada
Dominion Diamond Mines ULC said on Monday it reached a deal to sell its Ekati Mine in Canada's Northwest Territories to holders of its second lien notes, eight months after seeking bankruptcy protection amid a worldwide upheaval in the diamond industry, reports Reuters.
Closely held Dominion, owned by the Washington Companies, filed for creditor protection in April, citing disruption to the global diamond trade caused by the novel coronavirus pandemic.
Under the deal, which is subject to court approval, an entity controlled by DDJ Capital Management and Brigade Capital Management will acquire nearly all of Dominion's assets in exchange for the assumption of $70 million in debt, Dominion said in a statement.
The deal does not include Dominion's 40 percent stake in global miner Rio Tinto's nearby Diavik Mine, which is the subject of a separate dispute between the companies.
Calgary-based Dominion said the bidders would provide $70 million in working capital, with operations at the Ekati mine restarting no later than Jan. 29, 2021.
The company had this month recalled about 60 furloughed employees in anticipation of a restart.
Ekati, located about 300 km (190 miles) northeast of territorial capital Yellowknife, was Canada's first surface and underground diamond mine.
Cumulative production through 2016 was 67.8 million carats, according to the latest figures on Dominion's website.
In October, a sale of the mine to an affiliate of Dominion's parent company The Washington Companies for $126 million failed to win support of insurance providers.
Washington Companies acquired a controlling interest in the Ekati mine in 2017, as part of $1.2 billion takeover of Dominion.