Dominion Diamond Mines ULC has announced the signing of a letter of intent (LOI) with an affiliate of The Washington Companies (Washington) by 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”. 

Apart from this, Washington has also agreed to provide Dominion up to US$60 million in short-term debtor-in-possession (DIP) financing.

As has been widely reported and announced by the Company 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 granting Dominion protection under the CCAA.

Dominion said it believes that the proposed sale has several advantages. For one, it ensures Dominion will be able to deliver on its plans to resume mining operations at the Ekati Diamond Mine and “safely recall its furloughed workers” as the spread of COVID-19 subsides and diamond markets reopen. It also provides an assurance to Dominion’s employees, suppliers and the communities in the Northwest Territories “that Ekati will continue to operate into the future”, the Company said.

Moreover, with this arrangement Dominion will be able to   meet obligations “owed to employees, including pension obligations, and to remain a significant employer and corporate citizen 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,” Dominion stressed.