Dominion Diamond increases ownership of Ekati pipe project
Joint venture partner Stewart Blusson of Archon Minerals Ltd. disputes company's characterization of decision
Jessica Davey-Quantick
Northern News Services
Wednesday, March 1, 2017
SOMBA K'E/YELLOWKNIFE
Dominion Diamond Corporation announced last month it is taking on more of the Buffer Zone Joint Venture at the Ekati Diamond Mine.
The company's increase in the venture rose by 6.7 per cent, from 65.3 per cent to 72 per cent effective Feb. 1.
The Buffer Zone Joint Venture contains 106 mining leases, including the Jay and Lynx kimberlite pipes. Kimberlite is better known as the igneous rock where diamonds can be found. The Buffer Zone is one of two joint ventures at the Ekati mine - Dominion has an 88.9 per cent interest in the other, the Core Zone Joint Venture.
All of the production in 2017 was sourced from the Core Zone, and there are high hopes for the Buffer Zone. The Jay Project was approved for development in July. Dominion described it as "the most significant undeveloped kimberlite pipe deposit" at Ekati in a news release at the time, and planned to pump US$647 million into its development.
Dominion Diamond CEO Brendan Bell declined to comment as to what the increase in ownership could mean, either for development or in terms of dollar signs, stating in a news release that the ownership switch resulted from the decision of the minority partner, Archon Minerals Limited, not to participate in the full fiscal year 2017 capital program.
Archon's president and director is Stewart Blusson, who co-discovered the kimberlite formations that would lead to the Ekati Diamond Mine with geologist Chuck Fipke in the 1980s.
"Dominion Diamond continues to advance the Jay and Lynx projects in the Buffer Zone," stated Laura Worsley-Brown, communications superintendent with Dominion in an e-mail to Yellowknifer.
"The company is not able to comment on the reasons behind Archon's decisions."
Blusson isn't staying mum, however. His company released its own news release in response to Dominion's, telling a different story.
"Archon disagrees with Dominion's position with respect to the change in ownership interest, as well as the characterization that the company has made a final decision not to participate in the capital program," he stated in the release.
"Archon has spent the past year evaluating the economics of projects in the Buffer Zone and has raised various concerns with Dominion regarding the same. Both joint venture partners have been in discussions to attempt to resolve these concerns. Until these discussions have concluded, Archon does not consider it appropriate to make a decision with respect to the funding of any capital program."
Blusson declined Yellowknifer requests to elaborate further.
"Archon will continue to work in good faith with Dominion to reach a resolution, and the company's board of directors will convene to formulate a response to the situation," stated Blusson.
