Workers recalled for potential restart of Ekati Diamond Mine after eight months

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CALGARY — The owner of the Ekati Diamond Mine in the Northwest Territories says it is asking about 60 furloughed workers to return to work in early December to prepare for an anticipated restart of the suspended mine.

Dominion Diamond Mines ULC says its senior secured lenders and an ad hoc group of holders of its second lien notes say they expect to be able to reach a binding agreement in the near future to restructure its debt and provide funding for the insolvent company.

The future of Canada's first diamond mine was cast in doubt last month when Dominion reported a deal to sell it for about $166 million had fallen through after bond issuers refused to go along with it.

The offer by two companies affiliated with Dominion, referred to as a ``stalking horse bid,'' was rejected by issuers of about $280 million in surety bonds posted with the N.W.T. government to cover reclamation obligations related to the mine.

Dominion said Friday it is protected from its creditors until Dec. 15 under the Companies' Creditors Arrangement Act.

Operations at Ekati were suspended in March to prevent spread of the COVID-19 pandemic. The virus's negative impact on diamond transport and marketing was cited by the company in its court filing for CCAA protection in April.

This report by The Canadian Press was first published Nov. 13, 2020.

The Canadian Press