Dominion Diamond Mines reaches agreement on key terms with the Washington Companies to sell substantially all of its assets
22 May 2020
Dominion Diamond Mines ULC announced today that it has signed a letter of intent with an affiliate of The Washington Companies under which an entity to be managed by Washington would acquire substantially all of Dominion’s assets for approximately US$126 million in cash and the assumption of substantially all of Dominion’s operating liabilities. Washington has also agreed to provide Dominion up to US$60 million in short-term debtor-in-possession financing.
As previously announced, on April 22 Dominion filed for insolvency protection under the Companies’ Creditors Arrangement Act (“CCAA”) and obtained an order from the Alberta Court of Queen’s Bench (the “Court”) granting Dominion protection under the CCAA.
Dominion believes that the proposed sale:
- Ensures Dominion will be able to deliver on its plans to resume mining operations at the Ekati Diamond Mine (“Ekati”) and safely recall its furloughed workers as the spread of COVID-19 subsides and diamond markets reopen;
- Provides assurance to Dominion’s employees, suppliers and the communities in the Northwest Territories that Ekati will continue to operate into the future;
- Allows Dominion to pay or meet obligations owed to employees, including pension obligations, and to remain a significant employer and corporate citizen in the Northwest Territories; and
- Provides assurance to the Government of the Northwest Territories that Dominion will continue to comply with all appropriate health, safety and environmental standards at Ekati and provide economic support to the communities in the Northwest Territories
Dominion continues to believe in the long-term viability of its assets and expects to emerge from the CCAA process stronger and better able to deliver value to all stakeholders, including the Government and citizens of the Northwest Territories.