Under the agreement, Washington will buy all of Dominion’s outstanding common shares for $14.25 each.
Washington Companies is a group of privately held North American mining, industrial and transportation businesses, and approached Dominion with an acquisition proposal in March this year.
Washington Companies president Lawrence Simkins said: “We are excited to work with their team to extend the mine-life of the Ekati mine and continue partnering with Rio Tinto in the operation of the Diavik mine, while maintaining long-term employment for Dominion employees.”
The agreement has received approval from Dominion board of directors.
Dominion Diamond board chair Jim Gowans said: “The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the north for decades to come.”
Washington will operate and build Dominion’s assets, and plans to extend the mine life of Ekati for decades, in line with the current development plan.
In addition, it will fund the development of Jay and Fox Deep projects, while investing in a renewed greenfield exploration programme.
Located in the Lac de Gras region of the Northwest Territories, Ekati is a surface and underground diamond mine.
A 186 carat diamond was recovered from the mine’s Pigeon pit last year.
The cumulative production at the mine until January this year stood at around 67.8 million carats. In the event of Dominion receiving a better proposal, Washington reserves the right to match.