Harry Winston sees Diavik mine's net present value at C$2.6 billion

Mon Aug 20, 2012 10:07am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Reuters) - Harry Winston Diamond Corp HW.TO said the Diavik mine in Canada's Northwest Territories is expected to remain in production until 2023 and estimated the net present value of the mine at C$2.6 billion.

The luxury jeweler and watchmaker had been holding off on releasing the full life-of-mine plan for Diavik following partner Rio Tinto Plc's (RIO.L: Quote) (RIO.AX: Quote) decision to review its diamond business.

The mine, in production since 2003, is expected to have a total capital cost of C$955 million ($966.4 million) until the end of its life, Harry Winston said in a statement.

A mining company can be evaluated on basis of the net present value of potential future cash flow, discounted at an appropriate rate.

Rio Tinto is the operator and 60 percent owner of the mine that produced 6.7 million carats of diamonds in 2011. Harry Winston owns the rest.

Shares of Toronto-based Harry Winston, which has a market value of C$1.14 billion, were up marginally at C$13.44 on Monday on the Toronto Stock Exchange.

($1 = 0.9883 Canadian dollars)

(Reporting by Bhaswati Mukhopadhyay in Bangalore)