The deal to sell the Ekati Diamond Mine has fallen through after being refused by bond issuers on Friday.
A press release says the approximate $280 million deal fell apart as the offer by two affiliated companies, a “stalking horse bid,” was rejected by Aviva Insurance Company of Canada, Argonaut Insurance Company and Zurich Insurance Company Ltd.
The bid would have needed to also be approved by Alberta’s superior court. The Washington Companies also needed to enter into agreements with parties holding surety bonds for Ekati mine, including the Government of the Northwest Territories.
Dominion filed for bankruptcy protection earlier this year, saying the COVID-19 pandemic made it difficult to get its diamonds to market. However, neither of the NWT’s other two diamond mines had to file for protection despite the pandemic.
Caroline Wawzonek, minister of Finance and Industry, Tourism and Investment, says in an email she recognizes the severity of the situation.
“If the Ekati mine is ultimately unable to reopen or significantly delayed, this will affect revenue and employment numbers in the territory. Overall prospects for the NWT’s economic future have not changed substantially,” she says.
Wawzonek says one of the ways the GNWT will assist the mining industry will be with the implementation of the Mineral Resources Act.
“As always, our main concern remains the residents and businesses of the NWT and we will continue to advocate for them tirelessly. We remain very conscious of the impact of this latest news from Dominion on all those who may be personally affected,” she says.
The release reports Dominion will remain in creditor protection until Nov. 7, unless extended.