TORONTO (miningweekly.com) – Canadian diamond miner and luxury goods manufacturer Harry Winston on Tuesday said it had lifted its 2012 full-year diamond production from its part-owned Diavik diamond mine by nearly 7.5% year-on-year to 7.2-million carats on higher grades, but that this was below guidance of 8.2-million carats.

The company said the decrease in carats from the original 2012 guidance was mainly owing to deferring the processing and recovery of lower value carats from the reprocessed plant rejects (RPR), in favour of processing underground ore containing higher valued carats. Production was also impacted by a reduction in processing plant throughput owing to changes in the geological composition of the ore.

During the fourth quarter of 2012, the Diavik diamond mine produced 1.9-million carats from 500 000 t of ore processed, as compared with 1.6-million carats from 600 000 t of ore processed in the comparable quarter of the prior year.

The 19% increase in carats recovered in the quarter was mainly owing to improved grades in each of the kimberlite pipes, partially offset by the 17% decline in ore processed in the quarter, which was owing to a reduction in processing plant throughput that resulted from changes in the geological composition of the ore.

Harry Winston and joint venture partner Rio Tinto expect the Diavik mine to produce about six-million carats this year from processing about 1.6-million tons of ore, as well as processing 200 000 t of stockpiled ore.

Mining activities will be exclusively underground with about 700 000 t expected to be sourced from A-154 North, about 500 000 t from A-154 South and about 400 000 t from A-418 kimberlite pipes.

Included in the estimated production this year are about 600 000 ct from RPR and 100 000 ct from the improved recovery process for small diamonds. Harry Winston said these RPR and small diamond recoveries are not included in the company's reserves and resource statement and are, therefore, incremental to production.

Harry Winston on Monday announced it had agreed to sell its luxury goods segment to Swiss watchmaker The Swatch Group in a $750-million deal which would allow Harry Winston to focus on its mining activities.

Harry Winston agreed in November to buy BHP Billiton's Ekati diamond mine in northern Canada for $500-million. It said it would fund the cash deal with existing resources and debt, including a $400-million term loan and a $100-million revolving credit facility.

Harry Winston owns retail salons around the world and also holds a 40% stake in the Diavik diamond mine in Canada's Northwest Territories. Rio Tinto owns the remaining 60% stake in the remote mine.

The company’s Toronto-listed stock traded at C$14.91 apiece early on Tuesday afternoon.