A newly published document provides a sense of how much value is left at the failed Ekati diamond mine – and the debt that helped crush it.
The storied NWT mine went into receivership this month after nearly three decades in operation. Its owner had blamed tariffs and lab-grown diamonds for the mine’s financial trouble, among other factors.
PricewaterhouseCoopers, the insolvency firm brought in to manage the mine by the NWT government, has now published a list of the mine’s assets and the companies and governments owed money.
The math makes clear what many government leaders and businesses had already said: they’re unlikely to see a cent.
PwC estimates Ekati’s assets have a current book value of about $192 million.
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That includes:
- $7.5 million in cash;
- diamonds worth $8.6 million;
- land, buildings, plant and equipment worth about $100 million; and
- assorted other assets making up the bulk of the remainder.
When a firm goes bust, secured creditors get the first bite at those assets – though in Ekati’s situation, things are complicated by the need to remediate the mine, which might mean some of those assets are still required.
The secured creditors in this instance are loan administration firm Alter Domus (owed $112.5 million), the federally backed Canada Emergency Enterprise Funding Corp or CEEFC ($188 million) and Caterpillar Financial Services ($4.5 million).
CEEFC is the Crown corporation that pumped more than $175 million in loans into Ekati in a bid to keep it afloat over the past year. The claims of CEEFC and Alter Domus have each risen by millions of dollars since May, when a similar list was last published.
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Secured creditors are currently owed $305 million. Given Ekati’s assets are only valued at a maximum of $192 million, that means the secured creditors are $113 million short, never mind the dozens of unsecured creditors that include various Indigenous governments and NWT firms.
The territorial government is on that list – owed about $15 million through various entities – while 24 other governments and businesses are each owed more than $1 million. In all, the list approaches a further $100 million in debt.
More than a dozen creditors with registered liens against the mine simply have “TBD” as the sum owed.
“TBD” is also entered as the sum owed to the mine’s employees.
In the document, PwC says it will attempt to stabilize the mine’s operations “and preserve the value of the property” as Ekati moves into closure.
How and when most affected parties – including the federal government – might get any money back is not clear.
However, the consulting firm that oversaw Ekati’s earlier descent into creditor protection was granted a half-million-dollar fee for its work by a British Columbia judge on Monday.
PwC has not responded to requests for comment, despite the territorial government repeatedly referring reporters’ questions to the firm at a news conference earlier in July.
