TORONTO (miningweekly.com) – Diamond miner and luxury goods manufacturer Harry Winston Diamond has agreed to buy global diversified miner BHP Billiton’s diamond interests, including its 80% interest in the Ekati diamond mine, in Canada.
The $500-million deal included BHP Billiton's diamond sorting and sales facilities in Yellowknife, Northwest Territories and Antwerp, Belgium.
The Ekati diamond mine consists of the ‘core zone’, which includes the current operating mine and other permitted kimberlite pipes, as well as the 'buffer zone’, an adjacent area also hosting kimberlite pipes with both development and exploration potential.
BHP Billiton, the world's largest miner, last year said it planned to sell all, or part, of its diamond assets, including the Ekati mine, while it focused on larger, long-life assets.
BHP Billiton in December also sold its majority stake in the Chidliak exploration project, in northern Canada, to partner Peregrine Diamonds for C$9-million over three years, including a 2% royalty on future production from the operation.
"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. Together with our existing mining business, these assets will serve as our platform for sustained, disciplined growth in the upstream diamond sector,” Harry Winston Diamond chairperson and CEO Robert Gannicott said in a statement.
The Ekati diamond mine, which is located about 310 km north-east of Yellowknife, in the Northwest Territories of Canada, includes both openpit and underground operations and was Canada's first, and largest, diamond producer, having begun production in 1998.
It is located near the Diavik diamond mine in which Harry Winston holds a 40% interest.
Closing of the transaction is expected to take place before the end of March 2013. Harry Winston said it would use cash resources on hand and new debt financing that had been arranged with The Royal Bank of Canada and Standard Chartered Bank to pay for the acquisition.
Rothschild has acted as lead financial adviser and RBC Capital Markets and Standard Chartered Bank have acted as co-advisers to Harry Winston in connection with this transaction. CIBC acted as the sole financial adviser to BHP Billiton.
Harry Winston’s Toronto-listed shares traded down 3.05% at C$13.04 apiece on Tuesday morning.