Dominion Diamond acquires BHP Billiton’s stake in Ekati Diamond Mine
Canadian diamond miner Dominion Diamond has completed the acquisition of BHP Billiton's diamonds business, including its interests in the Ekati Diamond Mine and Diamonds Marketing operations, for $553m.
The total transaction price includes $500m plus purchase price adjustments of $53m.
The Ekati diamond mine, located 310km northeast of Yellowknife and 200 kilometres south of the Arctic Circle, was the country's first diamond mine.
It comprises the Core Zone, which includes the current operating mine and other permitted kimberlite pipes, along with the Buffer Zone, an adjacent area hosting kimberlite pipes having both development and exploration potential.
Prior to completion of the sale, BHP Billiton's interest in EKATI included a 80% stake in the Core Zone Joint Venture and a 58.8% interest in the Buffer Zone Joint Venture, mainly focusing on exploration targets.
Commenting on the completion of the deal, Dominion Diamond chairman and chief executive Robert 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."
In November 2012, BHP Billiton signed definitive agreements to sell its diamonds business for an aggregate cash consideration of $500m.
Under the terms of the sale agreements, Dominion Diamond will assume 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.
The deal then was subject to regulatory approval and other customary conditions, all of which have been achieved.
Image: The Ekati diamond mine was Canada's first diamond mine. Photo: BHP Billiton.