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RAPAPORT... Dominion Diamond Corporation entered into an agreement with C. Fipke Holdings Ltd. to acquire its stake in the Ekati diamond mine for $67 million, subject to adjustments to reflect joint venture contributions and distributions since June 30, 2012 when BHP Billiton sold the project.
The Ekati mine consists of the core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as the buffer zone, an adjacent area hosting kimberlite pipes with both development and exploration potential. Dominion Diamond initially held an 80 percent participating interest in the core zone, with FipkeCo and Dr. Stewart Blusson each holding a 10 percent interest. Dominion Diamond carries a 58.8 percent participating interest in the buffer zone, with FipkeCo holding a 10 percent share and Archon Minerals Limited holding a 31.2 percent participating interest.
The agreement stated that FipkeCo will sell its share in the core zone for $50 million and its interest in the buffer zone for $17 million.
Dominion Diamond's chairman, Robert A. Gannicott, said, "Although the sale by Chuck Fipke of his interest in the Ekati project ends his financial involvement with Canada's first diamond mine, his contribution to its discovery and success goes well beyond that. The history of Canadian mining is full of stories of accidents of fate leading to discoveries but the discovery of diamonds in the Slave Geological Province is a story of years of dedicated technical work led by a focused technical expert with unwavering belief in the outcome." Dominion Diamond stated that if Blusson exercises his right in respect of FipkeCo's core zone interest, the company would acquire an 8.89 percent participating interest from FipkeCo, rather than a 10 percent interest. If Archon exercises its right in respect of FipkeCo's buffer zone interest, the company would acquire a 6.53 percent participating interest from FipkeCo, rather than a 10 percent stake.
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