Dominion Diamond pays reasonable price for Ekati stake, analyst says


Dominion Diamond (DDC +2.2%) agrees to acquire C. Fipke Holdings' 10% participating interests in the Ekati Diamond Mine at a price equivalent to the price paid to BHP Billiton in 2013 for its interests.

BMO analyst Edward Sterck thinks it's a good deal for Dominion, as he values 10% of the core zone at $91M, a significant premium to the $50M - plus another $17M for a stake in the buffer zone - DDC is offering.

The big unknown is the buffer zone, where the undeveloped "Jay pipe” offers potential for the future; a feasibility study is ongoing, but Sterck estimates development of Jay for ~$1B could boost DDC’s net present value by 25%.

Comments (0)
Be the first to comment
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs