Diavik diamond mine’s Q4 production climbs 19%

Harry Winston Diamond Corp. (TSX:HW), (NYSE:HWD) said Tuesday the Diavik mine in Canada’s Northwest Territories produced 1.9 million carats in the fourth quarter of 2012, up 19%t from a year earlier.

The Toronto-based company attributed the increase from 1.6 million carats produced in the fourth quarter of 2011 to better grades of kimberlite, the mineral that contains raw diamonds.

The mine, 300 kilometres northeast of Yellowknife, is jointly owned by Rio Tinto PLC and Harry Winston.

The production report follows Harry Winston’s announcement on Monday that it will sell its retail high-end jewellery operation to Swiss watch company Swatch in a $1-billion deal, including $250-million of assumed debt.

According to recent reports, Harry Winston is interested in acquiring Rio Tinto's 40% stake in Diavik.

"We are aware that Rio Tinto wants to sell its 60 per cent interest in the Diavik mine where we already own the 40 per cent, that's an obvious one for us to look at as long as the price is right," Harry Winston's chief executive, Robert Gannicott, was quoted as saying by Business Days.

Two months ago, Harry Winston paid $500 million to BHP Billiton for its 80% in another Canadian diamond mine, Ekati.

In August last year, the company said Diavik had another 11 years to go and a current net value of $2.6 billion. Winston also said the mine will have a total capital cost of $955 million until the end of its life.

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(Image courtesy of the Diavik Diamond Mine)