Harry Winston picks up BHP’s Ekati mine

by eyetee | November 13, 2012 6:26 pm

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Harry Winston Diamond Corp. has signed a $500-million deal to purchase BHP Billiton’s Ekati Diamond Mine.

The agreement comes nearly a year after BHP announced it was looking to offload its diamond business.

Speculation mounted over the last few months that Harry Winston would make an offer to Rio Tinto on the Diavik Diamond Mine, of which the Toronto-based company owns 40 per cent.

In addition to BHP’s controlling interest in Ekati, the agreement includes its associated diamond sorting and sales facilities in Yellowknife, Northwest Territories, and Antwerp, Belgium.

“Completion of this acquisition will bring the opportunity to marry our Canadian diamond sorting and marketing skills with an experienced mine operating and development team, a world-class operating asset, and future growth potential,” said Harry Winston chair and chief executive officer (CEO), Robert A. Gannicott.

“Together with our existing mining business, these assets will serve as our platform for sustained, disciplined growth in the upstream diamond sector.”

The cash deal consists of $400 million for the ‘core zone,’ which includes the current operating mine and other permitted kimberlite pipes, and $100 million for the ‘buffer zone,’ comprising kimberlite pipes with development and exploration potential.

The companies expect to complete the deal—which is subject to regulatory approval and other customary conditions—by the first quarter of 2013.

“We are very proud of Ekati’s track record and the substantial value it has created for the region and our shareholders,” said BHP Billiton diamonds and specialty products president, Tim Cutt.  “The mine’s success is a credit to the people who work there, at Yellowknife, and with the marketing team in Antwerp. Harry Winston has long experience in the Canadian diamond industry and its commitment to study further development at Ekati could help extend the mine’s contribution to Northern Canada for many years to come.”

BHP owns 80 per cent of the Ekati mine. The deal allows its joint venture partners pre-emptive rights to purchase its interests, and a 60-day window in which to exercise those rights.

Source URL: https://www.jewellerybusiness.com/news/harry-winston-picks-up-bhp-s-ekati-mine/

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