Bid accepted to exit creditor protection and restart Ekati Diamond Mine

The owner of the Ekati Diamond Mine in the NorthwestTerritories says it plans to return the suspended project to fulloperating status after accepting a "stalking horse bid" by an affiliated buyer to allow it to exit court protection from creditors.

Dominion Diamond Mines ULC says the bid submitted by CanadianDiamond Holdings, LP and CA Canadian Diamond Mines ULC, affiliates of the Washington Companies, was the only qualified bid made under a sales process approved by the Court of Queen's Bench of Alberta.

The bid for about US$126 million (C$166 million) in cash providesfor the purchase of substantially all of Dominion's assets relatedto Ekati and the assumption of Ekati-related operating liabilities, which includes offering employment to Dominion's employees and the assumption of pension obligations.

The bid is subject to a number of conditions, including approvalby the court and reaching agreement with the N.W.T. government onsecurity for reclamation obligations.

Dominion filed for creditor protection in April. The company said it could not pay its debts including to the creditors who financed the purchase because the COVID-19 pandemic has essentially shut down the diamond industry.

Dominion says the return to full operations at Ekati would occurafter completion of the transaction, expected Nov. 7, as well as a successful recovery of global diamond sales markets.

Dominion's 40 per cent stake in the Diavik mine operated by rivalRio Tinto, located near Ekati about 300 kilometres northeast of Yellowknife, is not included in the deal.