RAPAPORT... Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, completed its planned acquisition of the Ekati diamond mine, which included associated diamond sorting and sales facilities in Yellowknife, Canada and Antwerp. Ekati consists of a core zone that includes the current operating mine and other permitted kimberlite pipes, as well as a buffer zone, an adjacent area hosting kimberlite pipes with both development and exploration potential. Dominion Diamond purchased the assets from BHP Billiton for $553 million and this transaction officially marks the end of BHP's diamond investment.
Robert Gannicott, the chairman and CEO of Dominion Diamond, said, "We are very pleased to be able to bring our northern mining background and diamond marketing skills to bear on a project that is well constructed, well operated and well-endowed with resources that represent a promising future for shareholders, employees and northern stakeholders."
Ekati held cash of approximately $65 million on the closing date and two sales cycles (10 weeks) of diamond inventory either in the process of being sorted and valued or available for sale. This inventory will be valued against Dominion Diamond's rough diamond sales assortments. Dominion Diamond also provided letters of credit to Canada of approximately $127 million in support of reclamation obligations for the core zone. The purchase price and the letters of credit were satisfied from or secured by cash on hand.
Dominion Diamond expects to release a detailed mine plan for Ekati on or before April 24.