Dominion Diamond Corporation has entered into an agreement with C. Fipke Holdings Ltd. its 10 percent interest in the Ekati diamond mine at a price equivalent to the price paid to BHP Billiton in 2013 for its interests.
Dominion Chairman and CEO, 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, according to a report on IDEX Online.
The company currently holds an 80-percent participating interest in the Core Zone, with FipkeCo holding a 10-percent participating interest and Dr. Stewart Blusson holding the remaining 10 percent participating interest. The company holds a 58.8-percent participating interest in the Buffer Zone, with FipkeCo holding a 10-percent participating interest and Archon Minerals Limited holding a 31.2-percent participating interest.
FipkeCo will sell its 10 percent interest in the Core Zone for $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 installments over 31 months, and the company would have the right, but not the obligation, to satisfy one or more installments in common shares of the company.
FipkeCo will sell its 10 percent interest in the Buffer Zone for $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 favor 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 percent participating interest from FipkeCo, rather than a 10 percent interest.
If Archon exercises its right in respect of FipkeCo's Buffer Zone interest, the company would acquire a 6.53 percent participating interest from FipkeCo, rather than a 10 percent interest.
It is anticipated that completion of the transactions would occur in September, 2014.
