29-4-2020
Dominion Diamond Mines has requested an extension to insolvency protection under the Companies’ Creditors Arrangement Act granted from the Alberta Court of the Queen’s Bench which will expire on 2 May, as the mining company has no ability to generate sufficient revenue to support its ongoing financial obligations currently.
The company has US$180 million of diamond inventory. However, the closing of sorting houses and diamond markets in Canada and Belgium have impacted its ability to make a payment of US$11.5 million to Diavik Diamond Mines as well as US$14.3 million interest payment on other debts due on 1 May.
Given thatits Ekati diamond mine has been suspended since the mid of March, Dominion CFO Krystal Kaye said that the company has US$180 million in diamond inventory “trapped” in Canada, India and Antwerp, Belgium as a result of the COVID-19 lockdowns. Dominion Diamond was obligated to pay some $22 million per month as its share of operating costs at the Diavik Mine while the company had no cash flow.
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