Dominion Diamond eyes profits, not deals

Thu Jun 6, 2013 1:19pm EDT
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By Julie Gordon

TORONTO (Reuters) - Dominion Diamond Corp DDC.TO, formerly known as Harry Winston Diamond Corp, on Thursday played down talk of possible acquisitions and said it is focused on developing promising assets around its newly acquired Ekati mine in northern Canada.

Shares of the miner, which reported a sharp increase in first-quarter profit late on Wednesday on the sale of its branded luxury business to Switzerland's Swatch Group UHR.VX, rose 2.2 percent to C$15.66 by midday on Thursday.

Dominion has long been touted as a potential buyer of Rio Tinto's (RIO.L: Quote) (RIO.AX: Quote) diamond business, including the company's 60 percent stake in the Diavik diamond mine in the Northwest Territories, where Dominion owns the remaining share.

But Chief Executive Robert Gannicott made it clear on a conference call on Thursday that the company is only interested in a deal at the best possible price and on its terms.

"There's no point in buying things just to have more diamonds," he said. "If it's not going to deliver profitability, then I'm quite happy to stay where we are."

Gannicott added that while Rio, which owns various diamond mines around the world, is looking to sell its diamond assets as a unit, Dominion is only interested in Diavik.

"We do not wish to purchase the entire unit, we're very focused on the Northwest Territories - the place we know, the place we belong and the place we understand," he said.

Dominion, which previously operated as a miner and retailer under the Harry Winston brand, struck a deal to buy Ekati from BHP Billiton (BLT.L: Quote) (BHP.AX: Quote) in November, betting that rising diamond prices could extend the life of that mine.   Continued...