* Cuts 2010 production outlook 11 pct to 6.9 mln carats
* Forecasts 2011 output of 6.9 mln carats
* To review mine plan for Diavik
* Shares fall 10.34 pct to C$13.00 (In U.S. dollars unless noted)
TORONTO, Dec 10 (Reuters) - Shares of Harry Winston HW.TO fell more than 10 percent on Friday morning after the diamond miner and retailer reduced its 2010 production outlook.
The company said it would produce 6.9 million carats in 2010, down from an earlier estimate of 7.8 million carats, sending its shares down 10.34 percent to C$13.00 on the Toronto Stock Exchange.
The Toronto-based miner said it would produce fewer carats because of processing problems with a mud-rich ore at its Diavik mine in Canada's Northwest Territories, and a lower grade of ore mined underground, compared with ore mined in open-pit operations.
The company said that it expects to produce 6.9 million carats in 2011, and is reviewing its mining plan for the Diavik mine along with joint venture partner Rio Tinto (RIO.L).
"Any changes in the mine plan, through the coming year are likely have a big impact both in terms of number of carats produced and on the actual sales price of those carats," Harry Winston Chief Executive Robert Gannicott said on a conference call. "And really the change should only be to the upside."
Harry Winston reported an 88 percent increase in total sales for the third quarter, but missed analysts' expectations.
On the retail side, Harry Winston said sales were up 48 percent, with its bridal business rising 70 percent.
The company said it plans to open two or three new upscale diamond salons in China. Retail sales in Asia rose 42 percent in the third quarter.
$1=$1.01 Canadian Reporting by Julie Gordon; editing by Peter Galloway