A major group of privately held North American mining, industrial and teransportation specialists, has announced plans to acquire a major Candian diamond mining company for a value of $1.2 billion.
The Washington Companies has announced that the company will acquire all of a Dominion Diamond Corporation’s outstanding common shares, with a total equity value estimated at around $1.2 billion.
“Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Lawrence R. Simkins, President of Washington. “We are excited to work with their team to extend the mine life of the Ekati mine and continue partnering with Rio Tinto in the operation of the Diavik mine, while maintaining long-term employment for Dominion employees. The Washington Companies has a long track record of building businesses throughout North America, significant experience in mining as well as operating its investments in Canada, and a decades-long investment horizon. We share a commitment to providing long-term benefits to all Dominion stakeholders and to the Northwest Territories and its local communities.”
“The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognizes the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer,” said Jim Gowans, Chair of the Board of Dominion Diamond Corporation. “This offer is the result of a robust strategic review process and the Board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favour of this transaction.”
A major element of the deal includes Washington Companies’ responsibility to provide genuine benefits to Canada through the operation of the Dominion Diamond mine assets.
Washington, in a statement, has made clear that it will plan to:
- Operate Dominion as a standalone business as Washington does with its other successful operating companies;
- Appoint a new CEO based in Canada to the Dominion management team;
- Keep Dominion’s headquarters in Canada and maintain a significantly Canadian management team;
- Deploy capital to develop both the Jay and Fox Deep projects;
- Make new investments in a reinvigorated greenfield exploration program;
- Maintain a high level of environmental stewardship through all phases of its operations;
- Provide ongoing and long-term employment for skilled, high-paying jobs at Dominion;
- Maintain focus on the recruitment, training and employment of Indigenous people;
- Honour the existing commitments to the Indigenous communities to ensure their interests are protected;
- Continue with scholarship programs and heritage funds to assist with social, recreational, and community development programs;
- Provide ongoing support for local suppliers and contractors, including Indigenous businesses; and
- Continue to promote Dominion’s CanadaMark brand for its ethically sourced and premium Canadian diamonds.
As of January 31, 2017, the Ekati Mine is reported to contain 26.0 million carats of probable reserves in the Core Zone and 79.4 million carats of probable reserves in the Buffer Zone for a total of 105.4 million carats of total probable reserves (on a 100% basis).
The mine also has a process planrt with the capacity to process 4.3 million tonnes per year.