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Dominion Diamond Corporation to Increase Interest in the Ekati Diamond Mine

July 9, 2014

YELLOWKNIFE, NW, July 9, 2014 /PRNewswire/ – Dominion Diamond Corporation
(TSX:DDC, NYSE:DDC) (the “Company”) announced today that it has entered
into an agreement with C. Fipke Holdings Ltd. (“FipkeCo”) to acquire
FipkeCo’s 10% participating interests in the Ekati Diamond Mine at a
price equivalent to the price paid to BHP Billiton in 2013 for its
interests.

The Chairman and Chief Executive Officer of Dominion Diamond
Corporation, Robert A. Gannicott, said, “Although the sale by Chuck
Fipke of his interest in the Ekati Project ends his financial
involvement with Canada’s first diamond mine, his contribution to its
discovery and success goes well beyond that. The history of Canadian
mining is full of stories of accidents of fate leading to discoveries
but the discovery of diamonds in the Slave Geological Province is a
story of years of dedicated technical work led by a focused technical
expert with unwavering belief in the outcome.”

The Ekati Mine property consists of the Core Zone, which includes the
current operating mine and other permitted kimberlite pipes, as well as
the Buffer Zone, an adjacent area hosting kimberlite pipes with both
development and exploration potential. The Company currently holds an
80% participating interest in the Core Zone, with FipkeCo holding a 10%
participating interest and Dr. Stewart Blusson holding the remaining
10% participating interest. The Company holds a 58.8% participating
interest in the Buffer Zone, with FipkeCo holding a 10% participating
interest and Archon Minerals Limited (“Archon”) holding a 31.2%
participating interest.

FipkeCo will sell its 10% interest in the Core Zone for US$50 million,
subject to adjustments to reflect joint venture contributions and
distributions since June 30, 2012, as well as interest from that date.
The base purchase price would be payable in instalments over 31 months,
and the Company would have the right, but not the obligation, to
satisfy one or more instalments in common shares of the Company.

FipkeCo will sell its 10% interest in the Buffer Zone for US$17 million,
subject to adjustments to reflect joint venture contributions and
distributions since June 30, 2012, as well as interest from that date.
The purchase price would be payable in cash on closing.

The joint venture agreements governing each of the Core Zone and the
Buffer Zone contain a right of first refusal in favour of each joint
venture party, which rights are exercisable for 60 days. If Dr. Blusson
exercises his right in respect of FipkeCo’s Core Zone interest, the
Company would acquire an 8.89% participating interest from FipkeCo,
rather than a 10% interest. If Archon exercises its right in respect
of FipkeCo’s Buffer Zone interest, the Company would acquire a 6.53%
participating interest from FipkeCo, rather than a 10% interest.

It is anticipated that completion of the transactions would occur in
September, 2014.

Cautionary Statement on Forward-Looking Information

This news release contains statements that constitute “forward-looking
statements” and/or “forward-looking information” within the meaning of
Canadian and United States securities laws (the “forward-looking
information”) relating to the proposed acquisition of the Ekati Diamond
Mine. Such forward-looking information is subject to important risks,
uncertainties and assumptions, including risks relating to the timing
of closing of such acquisition. The results or events predicted in
forward-looking information may differ materially from actual results
or events. As a result, readers are cautioned not to place undue
reliance on forward-looking information, which speaks only as of the
date of this disclosure, and should not rely upon this information as
of any other date. While the Company may elect to, it is under no
obligation and does not undertake to, update or revise any
forward-looking information, whether as a result of new information,
further events or otherwise at any particular time, except as required
by law. Additional information concerning factors that may cause actual
results to materially differ from those in such forward-looking
statements is contained in the Company’s filings with Canadian and
United States securities regulatory authorities and can be found at
www.sedar.com and www.sec.gov, respectively.

About Dominion Diamond Corporation

Dominion Diamond Corporation is a Canadian diamond mining company with
ownership interests in two major producing diamond mines. Both mines
are located in the low political risk environment of the Northwest
Territories in Canada.

The Company operates the Ekati Diamond Mine through its 80% ownership as
well as a 58.8% ownership in the surrounding areas
containing additional resources, and also owns 40% of the Diavik
Diamond Mine. It supplies rough diamonds to the global market through
its sorting and selling operations in Canada, Belgium and India and is
the world’s third largest producer of rough diamonds by value.

For more information, please visit www.ddcorp.ca

SOURCE Dominion Diamond Corporation


Source: PR Newswire



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