Dominion Diamond Mines has reached an agreement with investors for the purchase of all the company's assets, including the Ekati mine, according to a Monday news release from Business Wire.
The agreement was sealed with DDJ Capital Management and Brigade Capital Management, who are known as the bidders and purchasers of the deal.
The release added that Dominion will take all necessary actions to restart operations at Ekati as soon as possible and no later than Jan. 29, 2021. Dominion announced just weeks ago that it had recalled almost 60 furloughed workers to Ekati in preparation for resuming operations.
A new entity controlled by the bidders would acquire almost all of Dominion’s assets except for its joint venture agreement and liabilities relating to the Diavik Mine, along with $89.4 million in working financing.
The financing would support the post-closing satisfaction of assumed liabilities, operations at the Ekati Mine, and for general working capital purposes.
After the deal is closed, Dominion expects the ongoing business to satisfy obligations to such stakeholders as Dominion’s employees, including pension obligations; governmental authorities, including reclamation obligations at Ekati; and the company's Impact Benefit Agreement partners and other Indigenous groups and Northern communities.
The purchase agreement is still subject to Companies’ Creditors Arrangement Act (CCAA) court approval, the transfer of government authorizations needed to operate Dominion's business, the surety bond issuers taking all steps contemplated by the surety support confirmations and additional customary closing conditions.
The proposed transaction must close no later than Feb. 1, 2021, subject to exceptions including the ability of the agreement parties to extend the closing date by four weeks to acquire the needed approvals.
Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines, hailed the news about the Dominion agreement.
"The Ekati mine alone is a significantly important contributor to the NWT’s economy, and to the lives and businesses of many northerners. Having it go back into production will, I’m sure, be a relief to a great many people."
Dominion filed for insolvency on April 22, just over a month after it suspended operations at the Ekati mine due to concerns over Covid-19.