RAPAPORT… A Canadian court has consented to Dominion Diamond Mines’ sale of its Ekati site and most of its assets to two of its bondholders.
Under the agreement, DDJ Capital Management and Brigade Capital Management are set to acquire “substantially all” of the miner’s assets, except for its 40% stake in the Diavik mine, which it shares with Rio Tinto. In return, the purchasers will assume a number of Dominion’s liabilities, other than those owed to the Diavik joint venture, and will grant Dominion $70 million in working capital, the miner said Monday.
The approval was an important step toward restarting Ekati by January 29, the cutoff by which Dominion needs to begin operations so it can transport supplies using the 400-kilometer ice road that only opens for two months a year. It follows a failed attempt to sell to affiliates of its owner, the Washington Companies.
Dominion expects to close the transaction by February 1, it noted. The court has also granted the miner an extension on its insolvency protection — first filed in April — until March 1, 2021.
Image: The Ekati mine. (Flickr)
Dominion’s Ekati Sale Receives Court Approval
The Bottom Line
- DDJ Capital Management and Brigade Capital Management will acquire nearly all of Dominion’s assets except its 40% stake in the Diavik mine.
- The purchasers will assume many of Dominion’s liabilities and provide $70 million in working capital.
- Dominion aims to restart Ekati operations by January 29 to utilize the seasonal ice road and expects to close the sale by February 1.
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