Mining News: Dominion agrees to US$1.2B acquisition

Shane Lasley

Mining News

Dominion Diamond Corp. July 17 reported that it has reached an agreement to be bought by The Washington Companies in a deal worth roughly US$1.2 billion. Owned by billionaire Dennis Washington, The Washington Companies is a group of privately held North American mining industrial and transportation businesses. Washington has agreed to pay cash to acquire all of Dominion’s outstanding common shares for US$14.25 per share, a 44 percent premium to Dominion’s share price of US$9.92 prior to rumors of the proposed transaction. “The Washington offer delivers compelling and immediate value to Dominion shareholders at an attractive premium that recognizes the intrinsic value of Dominion and provides shareholders certainty through an all-cash offer,” said Dominion Chairman Jim Gowans. Dominion operates the Ekati Diamond Mine through an 88.9 percent ownership of the project’s Core zone as well as full ownership of the Buffer zone; and owns a 40 percent stake in the Diavik Diamond Mine. “Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Washington President Lawrence Simkins. “We are excited to work with their team to extend the mine life of the Ekati mine and continue partnering with Rio Tinto in the operation of the Diavik mine, while maintaining long-term employment for Dominion employees.” As part of this acquisition, Washington plans to: operate Dominion as a standalone business; appoint a new Canada-based CEO to the company; deploy capital to develop both the Jay and Fox Deep projects at Ekati; invest in greenfield exploration; continue Dominion’s focus on the recruitment, training and employment of First Nations people; honor Dominion’s existing commitments to the First Nations communities; and promote Dominion’s CanadaMark brand for its ethically sourced and premium Canadian diamonds. “The Washington Companies’ commitments to safety, operational excellence, innovation and world-class management teams position us favorably for long-term success at the Ekati and Diavik mines for the benefit of all Dominion Diamond stakeholders,” said Dennis Washington. “I look forward to the next chapter of continuing to build and support successful, safe business operations in the Northwest Territories.”

–SHANE LASLEY