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Actionable news in DDC: DOMINION DIAMOND CORPORATION,

Dominion Diamond to be Acquired by The Washington Companies for US$14.25 per Share in Cash

YELLOWKNIFE, Northwest Territories & MISSOULA, Mont.--(BUSINESS WIRE)--Dominion Diamond Corporation (TSX: DDC, NYSE: DDC) (the “Company” or “Dominion”) and The Washington Companies (“Washington”), a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis R. Washington, today announced that they have entered into an arrangement agreement (the “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 pursuant to a plan of arrangement (the “Arrangement”) under the Canada Business Corporations Act. The transaction represents a 44 percent premium to Dominion’s unaffected share price of US$9.92 on March 17, 2017. The transaction marks the result of Dominion's review of strategic alternatives as previously announced on March 27, 2017.

“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”

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The Board of Directors of Dominion (the “Board”), after consultation with financial and legal advisors, and based on the recommendation of a special committee of the Board consisting of four independent directors, has 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. All directors of the Company have entered into support agreements to vote their common shares in support 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, Chair of the Board of Dominion Diamond Corporation. “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.”

“The Washington Companies’ commitments to safety, operational excellence, innovation and world-class management teams position us favourably for long-term success at the Ekati and Diavik mines for the benefit of all Dominion Diamond stakeholders,” added Dennis Washington, Founder of The Washington Companies. “I look forward to the next chapter of continuing to build and support successful, safe business operations in the Northwest Territories.”

Benefits to Canada

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;
  • 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...

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