Shares of Dominion Diamond (DDC) were gaining by 2.3% to $12.48 on Tuesday morning, following a Reuters report that the Canadian diamond miner and peer Stornoway Diamond held talks about a potential merger in recent months.

One detail from the reported talks was that Stornoway's president and CEO, Matt Manson, would sit at the head of the combined company as CEO.

Dominion was recently the target of a $1.1 billion bid from American billionaire Dennis Washington, and is the world's number three diamond miner, Reuters added.

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