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Dominion Diamond investors approve US$1.2-billion sale to Washington Cos.

Last Updated Sep 19, 2017 at 11:40 am PDT

CALGARY – The Canadian head office of Dominion Diamond (TSX:DDC) is to remain in Calgary after its shareholders voted on Tuesday to approve its US$1.2-billion sale to Washington Companies.

Larry Simkins, president of the Montana-based acquirer, attended Dominion’s special meeting. He said afterwards it wouldn’t make sense to relocate the 100 employees of Dominion in Calgary after the head office was moved from Yellowknife earlier this year.

“It just moved here and the last thing we would do is uproot families and move them back to Yellowknife or some other place,” he said.

Investors in the Northwest Territories diamond producer voted more than 99 per cent in favour of the deal announced in July. Dominion had launched a strategic alternatives search after it rejected an initial Washington Companies offer in February.

Shareholders are to receive US$14.25 per share in cash when the acquisition closes, expected before the end of the year if Canadian regulatory approvals are received.

The sale gives Washington Companies a 100 per cent interest in the Ekati diamond mine and a 40 per cent stake in the Diavik diamond mine operated by Rio Tinto, both in the Northwest Territories.

“We’re going to execute on the plan that management already presented,” said Simkins, adding that his privately-owned company will follow Dominion’s plans to extend the life of the Ekati diamond mine and invest in exploration.

Dominion chairman Jim Gowans said the purchase of his company illustrates the high value the rest of the world sees in the diamond mining industry in Canada.

“The diamond industry over the past couple of years has gone through a flat cycle but it’s looking up now,’ he said.

“Most of the growth is actually here in Canada for the world diamond supply so I’m very optimistic.”

Simkins said Washington Companies is not currently interested in bidding for any other Canadian mine assets.

Canada has opened six diamond mines in the Northwest Territories, Nunavut and Quebec but two have have since closed.

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