Dominion says it has resumed diamond sales
The owner of the NWT’s Ekati mine says it has begun to sell diamonds again as it looks to leave creditor protection.
Dominion Diamond Mines expects to sell its assets to parent company Washington in the next two months, ending a half-year court process designed to shield Dominion from its mounting debt.
Dominion says a big part of its financial problem has been an inability to sell diamonds during the Covid-19 pandemic, which initially closed diamond polishing facilities and trading floors. (Other mining companies disputed that assertion, saying they had found ways to continue selling diamonds.)
In court filings made public this week, a Dominion executive said the company had now resumed some sales.
Kristal Kaye, Dominion’s chief financial officer, said the company’s office in the Belgian city of Antwerp – a diamond trading hub – had reopened, and the company had sold US$46 million in diamonds as of September 18.
Dominion this week put a batch of smaller diamonds on sale and is expecting to raise a further US$8 million as a result.
The revenue from those sales will be used to pay back loans taken by Dominion to get it through its recent financial difficulty.
Meanwhile, Dominion asked an Alberta court to extend its creditor protection until November 7.
That’s the date by which Dominion expects the sale of its assets to Washington to be concluded.
That sale is worth US$146 million. Washington will acquire essentially everything Dominion owns related to the Ekati mine, but not Dominion’s 40-percent stake in the neighbouring Diavik mine. What happens next to that stake is unclear.
In her latest court filing, Kaye suggests at least one party beyond Washington was interested in acquiring Dominion’s assets.
However, Kaye writes in an affidavit, no competing bid was received despite the deadline being extended to accommodate the unnamed interested party.
It still isn’t clear when operations will resume at Ekati, which shut down in March at the onset of the pandemic.
Dominion and Washington have said “substantially all” staff will be retained when work eventually begins again.