Dominion Diamond Corp finalizes Ekati mine purchase for $553 million from BHP Billiton

Dominion Diamond Corp, previously known as Harry Winston Diamond Corp, has finalized the purchase of the holding of BHP Billiton Canada Inc. and its various units in the Ekati diamond mine, in addition to diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp.

At the Ekati mine, there is a Core Zone, including the mine and other permitted kimberlite pipes, and the Buffer Zone, an area next to it with kimberlite pipes that have development and exploration potential.

Dominion will take on all of BHP Billiton’s obligations under Ekati's Environmental Agreement with the governments of Canada and the Northwest Territories, Socio-Economic Agreement with the government of the Northwest Territories, Impact and Benefit Agreements with aboriginal groups and pension liabilities linked to the mine’s defined benefit scheme, BHP Billiton said . BHP Billiton employees working at Ekati, in Yellowknife, and in marketing in Antwerp become Dominion workers under the transaction.

The purchase price was US$500 million plus purchase price adjustments of US$53 million for a total of US$553 million. The purchase price adjustments include US$13.4 million interest on the purchase since July 1, 2012, and the remaining sum comprises taxes, capital expenditures and other items funded by BHP Billiton since July 1, 2012, Dominion said.

Ekati had cash on hand of around $65 million and two sales cycles (10 weeks) of diamond inventory either being sorted and valued, or ready for sale, Dominion said.

Dominion intends to publish a detailed Mine Plan for the Ekati mine on or before April 24, 2013, it said.

Dominion Diamond Corporation Chairman and Chief Executive Officer Robert A. Gannicott 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."