Washington Companies acquiring Dominion Diamond

Dominion Diamond Corp. [DDC-TSX, NYSE] and The Washington Companies, a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis R. Washington, announced that they have entered into an arrangement agreement under which an entity affiliated with Washington will acquire all of Dominion’s outstanding common shares for US $14.25 per share in cash or a total equity value of approximately US $1.2 billion. The transaction represents a 44% premium to Dominion’s unaffected share price of US $9.92 on March 17, 2017.

The Board of Directors of Dominion unanimously determined that the Arrangement is in the best interests of the company, approved the Arrangement and recommends that Dominion’s shareholders vote in favour of the Arrangement.

“Dominion Diamond has an excellent collection of mining assets and a talented and experienced management team and workforce,” said Lawrence R. Simkins, President of Washington. “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. The Washington Companies has a long track record of building businesses throughout North America, significant experience in mining as well as operating its investments in Canada, and a decades-long investment horizon. We share a commitment to providing long-term benefits to all Dominion stakeholders and to the Northwest Territories and its local communities.”

“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 Jim Gowans, Chairman of Dominion Diamond. “This offer is the result of a robust strategic review process and the Board unanimously agrees that this offer represents the best option available to Dominion shareholders, and recommends that shareholders vote in favour of this transaction.”

Added Gowans, “Dominion also believes this transaction is an excellent outcome for the company’s stakeholders, including employees, community members and the Northwest Territories. The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the North for decades to come.”

Washington will be a responsible, long-term operator and builder of Dominion’s world-class assets, and plans to extend the mine life of Ekati for decades, consistent with the current development plan.

As part of this acquisition, Washington plans to:

• Operate Dominion as a standalone business as Washington does with its other successful operating companies;
• Appoint a new CEO based in Canada to the Dominion management team;
• Keep Dominion’s headquarters in Canada and maintain a significantly Canadian management team;
• Deploy capital to develop both the Jay and Fox Deep projects;
• Make new investments in a reinvigorated greenfield exploration program;
• Maintain a high level of environmental stewardship through all phases of its operations;
• Provide ongoing and long-term employment for skilled, high-paying jobs at Dominion;
• Maintain focus on the recruitment, training and employment of Indigenous people;
• Honour the existing commitments to the Indigenous communities to ensure their interests are protected;
• Continue with scholarship programs and heritage funds to assist with social, recreational, and community development programs;
• Provide ongoing support for local suppliers and contractors, including Indigenous businesses; and
• Continue to promote Dominion’s CanadaMark brand for its ethically sourced and premium Canadian diamonds.