Dominion Diamond Mines ULC said on Monday it reached a deal to sell its Ekati mine in Canada’s Northwest Territories to DDJ Capital Management, LLC and Brigade Capital Management, LP, both investment managers to holders of the company’s second lien notes.
Dominion Diamond, which was purchased by The Washington Companies in November 2017 for $1.2 billion, was granted creditor protection in April. Mining was suspended and Ekati placed on care and maintenance in March due to the coronavirus.
Under the deal, which is subject to court approval, an entity controlled by DDJ Capital Management and Brigade Capital Management will acquire nearly all of Dominion’s assets in exchange for the assumption of $70 million in debt.
The deal does not include Dominion’s 40% stake in Rio Tinto’s nearby Diavik mine.
Operations at the Ekati mine are expected to restart no later than January 29, 2021.
In October, a sale of the mine to an affiliate of Dominion’s parent company The Washington Companies for $126 million failed to win support of insurance providers.
The current mine life of Ekati, including the Misery underground and the Jay project, is to 2034. Several exploration and project evaluation activities are ongoing, including the Fox Deep project which would extend the life of Ekati to 2042.