Canadian diamond legend Fipke sells remaining stakes in Ekati mine

Wed Jul 9, 2014 12:33pm EDT

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(Reuters) - Charles "Chuck" Fipke, one of the founders of Canada's first diamond mine, Ekati, is selling his remaining stakes in the Arctic mine for $67 million, purchaser Dominion Diamond Corp (DDC.TO) said on Wednesday.

Fipke, along with his partner geologist Stewart Blusson, found evidence of diamond-bearing rock in Canada's North West Territories in the early 1990s, sparking a staking rush and the eventual establishment of Canada's first diamond mine in 1998.

Toronto-based Dominion, which bought out mining giant BHP Billiton Plc's (BLT.L) stake in Ekati last year, said the sale ends Fipke's financial involvement in the mine.

Through his company C. Fipke Holdings Ltd, Fipke holds a 10 percent stake in Ekati's core zone, which contains the current operating mine. He also owns a 10 percent stake in the so-called buffer zone, an adjacent exploration area containing diamond-bearing kimberlite pipes.

Fipke, who has switched diamond prospecting for breeding and racing thoroughbreds, will sell his core zone stake for $50 million and his holding in the buffer zone for $17 million, Dominion said. Both amounts are subject to possible adjustments for interest and joint venture contributions.

Dominion currently owns an 80 percent stake in Ekati's core zone, with Fipke's old partner Blusson owning 10 percent. In the buffer zone, Dominion owns 58.8 percent and Archon Minerals Ltd (ACS.V), a company owned by Blusson, owns 31.2 percent.

If Blusson and Archon were to exercise their rights of first refusal that exist under the joint venture agreements, the stakes Dominion would purchase from Fipke would reduce slightly.

Neither Fipke nor Blusson could immediately be reached for comment.

The transactions are expected to close by September.

(Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio)

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