An anonymous director reports

DOMINION DIAMOND CORPORATION INCREASES INTEREST IN THE EKATI DIAMOND MINE

Dominion Diamond Corp. has completed the previously announced acquisition of the interests of C. Fipke Holdings Ltd. (FipkeCo) in the Ekati diamond mine. The Ekati diamond mine consists of the Core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as the Buffer zone, an adjacent area hosting kimberlite pipes having both development and exploration potential, including the Jay and Lynx pipes.

Each of Dr. Stewart Blusson and Archon Minerals Ltd. exercised their rights of first refusal to acquire their proportionate share of the interests in the Core zone and Buffer zone, respectively, being sold by FipkeCo. As a consequence, the company acquired an additional 8.889-per-cent participating interest in the Core zone and an additional 6.53-per-cent participating interest in the Buffer zone. The base purchase price for the acquired Core zone interest was $42.2-million (U.S.), plus purchase price adjustments of $13.2-million (U.S.) for a total amount payable of $55.4-million (U.S.). The purchase price adjustments were paid in cash at closing, and the base purchase price was satisfied by a promissory note payable in instalments over 31 months. The company has the right, but not the obligation, to satisfy one or more instalments due under the promissory note in common shares of the company. The base purchase price for the acquired Buffer zone interest was $11.11-million (U.S.) plus purchase price adjustments of $3.24-million (U.S.), for a total amount paid in cash at closing of $14.35-million (U.S.).

After giving effect to the transactions, the company now holds an 88.889-per-cent interest in the Core zone and a 65.3-per-cent interest in the Buffer zone.