NORTHWEST TERRITORIES — Kinross Gold of Toronto has agreed to invest US$150 million in Harry Winston Diamond Corp. in exchange for an indirect interest in the Diavik diamond mine near Lac de Gras and a 19.9% shareholding in Harry Winston.
The agreement consists of two components. The first is a subscription for a minority 22.5% interest in the partnership that holds Harry Winston’s 40% interest in the Diavik diamond mine joint venture operated by Rio Tinto. The net effective subscription price is US$104.4 million. The second component is an equity private placement (subject to regulatory approval) of 15.2 million common shares of Harry Winston at a price of US$3.00 per share, for a total investment of US$45.6 million, giving Kinross a 19.9% interest in Harry Winston. Following the closing of the transaction, Kinross will be offered a seat on the Harry Winston board of directors.
Harry Winston will continue to market all of the partnership’s share of diamond production from the Diavik mine, including the portion attributable to Kinross’ interest.
The Diavik mine officially opened in 2003, and although underground production has been delayed several months, the A418 pit is expected to operate at full production this year.
Visit www.Diavik.ca for more information.