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Dominion Diamond Buys Ekati Mine

By Rich Smith - Apr 10, 2013 at 8:07PM

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Company formerly known as Harry Winston doubles down on mining.

Toronto-based diamond miner Dominion Diamond (NYSE: DDC) -- the company formerly known as Harry Winston Diamond -- has completed its purchase of BHP Billiton's (BHP 2.20%) stake in the Ekati Diamond Mine, "as well as the associated diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp, Belgium," Dominion Diamond announced Wednesday.

Dominion Diamond says it paid a total of $553 million to obtain BHP's interests in the mine, which contains both an operational "Core Zone" and also a "Buffer Zone" possessing potential for future exploration and development. In truth, however, Ekati brought with it cash on hand of $65 million as well as 10 weeks' worth of diamond inventory, which reduce the net value of the price Dominion Diamond paid for the mine.

Management said in a statement that it will release a detailed plan for how it expects to exploit the mine on or before April 24. Shares of the company gained 0.4% in Wednesday trading ahead of the announcement, closing at $16.66.

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