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Harry Winston Buys BHP Billiton Stake In Mine

NEW YORK (AP) â¿¿ Shares of Harry Winston Diamond will spend $500 million to acquire a stake in in a Canadian mine belonging to BHP Billiton Canada, the company said Tuesday.

The acquisition includes BHP Billiton's controlling interest in the Ekati diamond mine in the country's Northwest Territories, along with diamond sorting and sales facilities in Canada and Belgium.

The Ekati mine includes a "core zone," which includes the current operating mine, and a "buffer zone," an adjacent area with both development and exploration potential. The two zones are operated under separate joint venture agreements. Harry Winston will pay $400 million for the core zone interest and $100 million for the buffer zone interest.

The Ekati mine, which began production in 1998, includes both open pit and underground operations. It's also located near the Diavik diamond mine, in which Harry Winston holds a 40 percent interest.

The Ekati mine has produced an average of about $750 million dollars of rough diamonds per year over the last five years. Over that period, sales from the core zone represented about 6 percent of world rough diamond supply by value.

BHP Billiton Canada Inc. holds an 80 percent interest in the core zone and a 58.8 percent interest in the buffer zone, with the rest held by minority joint venture parties. The deals are expected to close before the end of March. Harry Winston said it plans to pay for the acquisitions with cash on hand and new debt financing.

Shares of Harry Winston Diamond Corp. shares fell 45 cents, or 3 percent, to $13 in morning trading.
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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