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Ekati diamond mine sold to Arctic Canadian Diamond Company

NNSL file photo

Dominion Diamond Mines closed the sale of its Ekati Mine to Arctic Canadian Diamond Company Ltd on Feb. 3. 

As a result, all mine employees are anticipated to be recalled to work no later than Feb. 25, a news release stated. 

"We are excited to have our employees back at work and to have Ekati in full production again," said interim president Rory Moore. "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."

Ekati's buyer is a company formed and owned by funds and accounts managed by DDJ Capital Management, Brigade Capital Management and Western Asset Management Company, according to the news release. 

Dominion has become Arctic Canadian Diamond Company as a result of the sale. 

The transaction was approved by the Alberta Court of Queen's Bench following an order issued on Dec. 11, 2020.

The purchaser has acquired all of Dominion's assets, except for Dominion's interest in the joint venture agreement and liabilities relating to the Diavik Diamond Mine. It has also assumed $89.4 million of Dominion's outstanding indebtedness under its revolving credit agreement and the reclamation obligations of the Ekati mine.

Arctic Canadian Diamond Company Ltd will receive a new $108.6-million working capital loan. 

"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," said chief financial officer Kristal Kaye.

The sale comes after a turbulent 11 months for Dominion Diamond Mines, after it suspended operations at Ekati in March 2020 to protect employees and communities from the Covid-19 pandemic. 

Ekati was put into care and maintenance and on April 22, 2020 as Dominion filed for insolvency protection under the Companies' Creditors Arrangement Act. 

Dominion began a 10-week phased restart at the mine in November 2020 and returned to normal operations on Jan. 20, 2021.