Big takeover in diamond business

Photo: The Canadian Press. All rights reserved.

The corporate logo of Harry Winston Diamond Corp. (TSX: HW) is shown. THE CANADIAN PRESS/HO

BHP Billiton is selling its diamonds business, including its stake in the Ekati diamond mine in the Northwest Territories, to Harry Winston Diamond Mines Ltd. for US$500 million in cash.

Under the deal, BHP Billiton's employees working at Ekati, in Yellowknife and in diamonds marketing in Antwerp, Belgium, will join Harry Winston, a Toronto-based mining and retail company.

"The mine's success is a credit to the people who work there, at Yellowknife and with the marketing team in Antwerp," said Tim Cutt, BHP Billiton Diamonds & Specialty Products president.

"Harry Winston has long experience in the Canadian diamond industry and their commitment to study further development at Ekati could help extend the mine's contribution to Northern Canada for many years to come."

Harry Winston already owns a 40 per cent stake in the nearby Diavik mine, also in the Northwest Territories, in a joint venture with Rio Tinto.

"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 Robert Gannicott, Harry Winston's chairman and chief executive.

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

The Ekati mine, Canada's first diamond mine, is 310 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle.