SOMBA K'E/YELLOWKNIFE
Dominion Diamond Corporation, formerly known as Harry Winston Diamond Corporation, is growing its share of the NWT diamonds pie, as analysts anticipate the company's plans may go beyond the acquisition of a controlling stake in the Ekati Diamond Mine.
Dominion Diamond Corporation, formerly known as Harry Winston Diamond Corporation, expects to close its acquisition of controlling interest of the Ekati Diamond Mine from BHP Billiton on or about April 10, 2013. - photo courtesy of BHP Billiton |
Last week, the company, which already owns a 40 per cent interest of Ekati's neighbouring $2.6 billion Diavik Diamond Mine, announced the federal and territorial governments have confirmed it will receive the regulatory approvals required to complete the US$500 million acquisition of BHP Billiton Canada Inc.'s 80 per cent ownership of Ekati mine and associated diamond sorting and sales facilities.
In addition, Dominion recently sold its retail business to Swatch Group for $1 billion, including $250 million in assumed net debt - a deal that analysts are speculating the company will use to buy the remaining 60 per cent stake in the Diavik mine from Rio Tinto, according to the Conference Board of Canada's recently released Territorial Outlook publication.
Adding to that, the company's exploration activity on more than 300,000 acres of "prime diamond real estate" in the Lac de Gras region, the company - which officially changed its name to Dominion following the sale of its retail arm - is emerging as the foremost diamond investor in the NWT, according to Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines.
"The creation of Dominion Diamonds marks the unveiling of a new diamond corporation that will be the major investor in the NWT, with a sole focus on diamond exploration, mining and sales," Hoefer stated in an e-mail to Yellowknifer.
"Dominion Diamond Corporation holds 40 per cent ownership in Diavik with potential to participate more fully in that mine, holds majority 80 per cent ownership in Ekati mine, and is exploring on over 300,000 acres of prime diamond real estate in the Lac de Gras region, the area that has made the NWT the fourth-largest global diamond producer by value," he stated.
"It is also exciting that this new major diamond company is proudly Canadian, based in Toronto. And in a nice turn of phrase, they have adopted a name 'Dominion' that is as old as Canada itself, adopted to describe Canada in 1867."
Global diamond demand is set to outstrip supply in 2015, when prices, which declined 12.5 per cent in 2012, are expected to increase, according to the conference board, which is the foremost independent, not-for-profit research organization in Canada.
De Beers Canada, another major diamond player in the NWT, has continued to ramp up production at Snap Lake Mine, and is expected to begin production at the NWT's fourth proposed diamond mine, Gahcho Kue, in 2015.
While Rio Tinto has been considering an exit from the diamonds business over the past year, Yellowknifer was not able to confirm whether Dominion is in talks to buy out the majority stake of Diavik by press time.
Dominion expects the closing of its Ekati purchase deal to occur on or about April 10.
The company is expected to release its fiscal 2013 fourth quarter and year-end results for the period that ended Jan. 31, 2013, after market hours on Wednesday.
