Dominion Diamond Corp. announced an agreement with Archon Minerals Ltd. (Archon) to convert Archon’s interest in the Buffer Zone Joint Venture (Buffer Zone) at the Ekati diamond mine into a royalty equal to 2.3% of all future gross revenue from diamonds produced there. The company will now have a 100% interest in the Buffer Zone in Canada’s Northwest Territories. It also maintains an ownership interest of 88.9% in the Core Zone Joint Venture at the Ekati diamond mine.

“We are delighted to have reached this mutually beneficial agreement with Archon,” said Jim Gowans, chairman of the board of directors of Dominion. “For both parties, the transaction provides ownership and funding certainty for the large-scale Jay project, which is currently in the final stages of permitting. It also provides significantly more exposure for Dominion’s shareholders to further discoveries on this highly prospective land package.”

On July 6, 2016, Dominion issued the results of a feasibility study on the Jay project, indicating positive project economics with a post-tax net present value of $398 million and an internal rate of return of 15.6%. Commercial mining activities at the Lynx kimberlite pipe in the Buffer Zone commenced on April 1, 2017. The Lynx pipe is forecast to represent approximately 5% of metric tons processed and carats recovered at the Ekati diamond mine for the fiscal year ending January 31, 2018.

The Buffer Zone contains 106 mining leases covering 89,184 hectares, and is contiguous with the Core Zone Joint Venture. Of the 150 kimberlite pipes discovered to date at the Ekati diamond mine, 38 are in the Buffer Zone. The company plans to spend approximately CAD$11 million on exploration in the Lac de Gras region for the fiscal year ending January 31, 2018.