TORONTO, March 19 /PRNewswire-FirstCall/ - Harry Winston Diamond
Corporation (TSX-HW; NYSE-HWD) ("Harry Winston") is pleased to announce a
strategic investment by Kinross Gold Corporation (TSX-K; NYSE-KGC)
("Kinross"), whereby Kinross will make a net investment of US$150 million to
acquire an indirect interest in the Diavik diamond mine and a direct equity
stake in the company. As part of the transaction the parties have agreed to
jointly consider other opportunities in the diamond mining industry.
According to the terms of the agreement signed today, Kinross has agreed
to subscribe for 15.2 million treasury shares from Harry Winston at a price of
US$3.00 per share, being approximately 19.9% of the company's issued equity
post the transaction. Kinross has the right to maintain this equity level by
participating in future equity financings. In addition, Kinross has agreed to
subscribe for new partnership units representing a 22.5% interest in the
limited partnership which holds Harry Winston's 40% joint venture interest in
the Diavik Diamond Mine, for a net effective subscription value of US$104.4
million. Following closing of the transaction, Kinross will be offered a seat
on Harry Winston's Board of Directors.
Harry Winston will use the US$150 million proceeds of the transaction to
repay existing bank debt and for general corporate purposes. In addition the
proceeds will fund Harry Winston's share of the capital costs to complete the
underground expansion of the Diavik mine that will provide access to reserves
which take the mine life to beyond 2022. Harry Winston will continue to market
the Partnership's entire share of diamond production from the Diavik mine,
including the portion attributable to Kinross' interest.
This new relationship will enable the company to access Kinross' mining
expertise in a broad variety of geographic environments, as well as their
financial strength, to complement the acknowledged diamond expertise of Harry
"We welcome this important investment by one of the world's leading mining
companies," said Bob Gannicott, Chairman and CEO of Harry Winston. "We look
forward to developing our relationship with Kinross as we build our company
and consider new opportunities for future growth."
Because of the current challenging global economic conditions the Harry
Winston board has decided to suspend dividend payments for the time being.
The Kinross transaction strengthens Harry Winston's balance sheet both to
withstand the uncertainties of the current global economic environment and to
be able to take advantage of opportunities that may become available during
this turbulent period.
The completion of the Kinross transaction is subject to customary closing
conditions including regulatory approval.
Harry Winston Diamond Corporation (TSX: HW; NYSE:HWD) will release its
Fiscal 2009 Fourth Quarter and Year-End results for the period ended January
31, 2009, after market hours on Thursday, April 2, 2009.
Harry Winston and Kinross will host a conference call for analysts,
investors and other interested parties on Thursday, March 19, 2009 at 4:45
p.m. ET, followed by a question-and-answer session.
To access the call, please dial:
North America: 1-866-543-6405; passcode 65480867
International: 1-617-213-8897; passcode 65480867
You may also access the conference call on a listen-only basis at:
http://investor.harrywinston.com or www.kinross.com.
A telephone replay of the call will be available one hour after the call
until 11:59 p.m. ET on April 3, 2009. To access the call replay, please dial:
North America: 1-888-286-8010; passcode 40769914
International: 1-617-801-6888; passcode 40769914
You may also access a replay of the call at:
http://investor.harrywinston.com or www.kinross.com
About Harry Winston Diamond Corporation
Harry Winston Diamond Corporation (TSX: HW; NYSE: HWD) is a specialist
diamond enterprise with assets in the mining and retail segments of the
diamond industry. The company supplies rough diamonds to the global market
from its 40% interest in the Diavik Diamond Mine, located in Canada's
Northwest Territories. The company's retail division, Harry Winston Inc., is a
premier jewelry and timepiece retailer with salons in key locations including
New York, Paris, London, Beijing, Tokyo and Beverly Hills. For more
information, please visit www.harrywinston.com or for investor information,
SOURCE Harry Winston Diamond Corporation
/CONTACT: Investor Relations - (416) 362-2237 ext 290 or
CO: Harry Winston Diamond Corporation
IN: MNG REA PCS
SU: CCA TNM
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