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Last updated on April 18, 2014 at 17:24 EDT

Harry Winston Diamond Corporation Reports Diavik Diamond Mine Fourth Quarter Production and Reserve and Resource Statement Update

January 17, 2012

TORONTO, Jan. 17, 2012 /PRNewswire/ – Harry Winston Diamond Corporation
(TSX:HW, NYSE:HWD) (the “Company”) reports that in the fourth calendar
quarter of 2011, the Diavik Diamond Mine (“Diavik”) recovered (100%
basis) 1.6 million carats from 0.6 million tonnes of ore processed. 
For the 2011 calendar year, 6.7 million carats of diamonds were
recovered from 2.2 million tonnes of ore processed. Although tonnage
processed was on target, there was a modest shortfall from the forecast
recovery of 6.9 million carats as a result of lower than expected
amounts of reprocessed ore and a higher proportion of A-418 ore
processed. The A-418 ore has a high heavy mineral content which have
similar characteristics to diamonds and therefore limits the
capacity in the diamond recovery section of the process plant.

A new life-of-mine plan for Diavik is under review by Rio Tinto plc. The
Company expects to publish a draft version of the updated mine plan in
the near future.  The Company’s draft mine plan will include
anticipated production by pipe, and operating and capital costs for the
life-of-mine, including the A-21 pipe.

Last year’s deep drilling campaign on the A-418 kimberlite pipe has
resulted in a total reserve increase of 3.1 million tonnes. Of this,
0.7 million tonnes which was previously in the resource category has
been promoted to reserve status. The additional increase of 2.4 million
tonnes of reserve came from new areas of the pipe. The processing of
samples from the deep drilling on A-154 North kimberlite pipe is
planned for 2012 with the results to be incorporated into the December
31, 2012 reserve and resource report.

The table below summarizes the mineral reserves and mineral resources at
the Diavik Diamond Mine as at the end of December 31, 2011 expressed in
millions of tonnes, carats per tonne, and millions of carats. The
mineral reserves set out below account for all depletions due to
production and sampling to the end of December 31, 2011, and the
increase in the reserves of A-418 described above. Totals may not add
up exactly due to rounding. The values shown are for 100% of the Diavik Joint Venture.

Mineral Reserves at Diavik Diamond Mine – December 31, 2011

     ___________________________________________________________________________________________
    |                 |     PROVEN RESERVES|       PROBABLE RESERVES|        PROVEN and PROBABLE|
    |                 |____________________|________________________|___________________________|
    |                 |             Mt     |       Mt      ct/t     |      Mt        ct/t       |
    |                 |       ct/t      Mct|                     Mct|                        Mct|
    |_________________|____________________|________________________|___________________________|
    |A-154 South      |                    |                        |                           |
    |       Open Pit  | --       --        | --        --         --|  --            --         |
    |                 |                  --|   1.4      3.4      4.7|                         --|
    |Underground      |     1.6     4.0    |       1.4      3.4     |         2.9        3.7    |
    |       Total     |                 6.3|                     4.7|                       10.9|
    |A154S            |     1.6     4.0    |                        |         2.9        3.7    |
    |                 |                 6.3|                        |                       10.9|
    |_________________|____________________|________________________|___________________________|
    |A-154 North      |                    |                        |                           |
    |       Open Pit  |--        --        |--         --         --| --          --          --|
    |                 |                  --|   4.9      2.2     10.7|    8.0       2.2      17.8|
    |Underground      |            3.1     |        4.9      2.2    |         8.0       2.2     |
    |       Total     |        2.3      7.1|                    10.7|                       17.8|
    |A154N            |            3.1     |                        |                           |
    |                 |        2.3      7.1|                        |                           |
    |_________________|____________________|________________________|___________________________|
    |A-418            |                    |                        |                           |
    |       Open Pit  |   0.7      4.0     | 0.6      3.8        2.3|     1.3        3.9        |
    |                 |                 2.8|       6.7      3.8     |                        5.0|
    |Underground      |           --       |                    25.1|       6.7        3.8      |
    |       Total A418|       --         --|       7.3      3.8     |                       25.1|
    |                 |            0.7     |                    27.4|       8.0        3.8      |
    |                 |        4.0      2.8|                        |                       30.2|
    |_________________|____________________|________________________|___________________________|
    |TOTAL            |                    |                        |                           |
    |       Open Pit  |                    | 0.6      3.8        2.3|     1.3        3.9        |
    |      Underground|0.7     4.0      2.8|   12.9     3.1     40.5|                        5.0|
    |     Total       |   4.7    2.8   13.3|      13.5      3.2     |   17.6       3.1      53.8|
    |Reserves         |      5.4     3.0   |                    42.8|      18.9        3.1      |
    |                 |                16.1|                        |                       58.9|
    |_________________|____________________|________________________|___________________________|

Mineral Resources at Diavik Diamond Mine – December 31, 2011

     ___________________________________________________________________
    |               |       MEASURED   |     INDICATED  |     INFERRED  |
    |               |__________________|________________|_______________|
    |               |            Mt    |         M t    |          Mt   |
    |               |      ct/t     Mct|    ct/t     Mct|   ct/t     Mct|
    |_______________|__________________|________________|_______________|
    |A-154 South    |          --      |        --      |       0.04    |
    |               |     --         --|    --        --|    3.5     0.1|
    |_______________|__________________|________________|_______________|
    |A-154 North    |          --      |        --      |        2.2    |
    |               |     --         --|    --        --|    2.4     5.3|
    |_______________|__________________|________________|_______________|
    |A-418          |          --      |        --      |        0.3    |
    |               |     --         --|    --        --|    2.7     0.8|
    |_______________|__________________|________________|_______________|
    |A-21           |    3.6    2.8    |          0.4   |        0.8    |
    |               |              10.0|     2.6     1.0|    3.0     2.3|
    |_______________|__________________|________________|_______________|
    |Total Resources|            3.6   |          0.4   |        3.3    |
    |               |      2.8     10.0|     2.6     1.0|    2.6     8.5|
    |_______________|__________________|________________|_______________|

Chairman and CEO, Robert Gannicott said, “As the Diavik operation
transitions to underground mining it is gratifying to find that a
better understanding of the resource continues to improve the reserve
and resource inventory. Improved mining and ore handling techniques are
being designed and implemented to improve returns for the future. We
will shortly be able to provide a plan and final budget for Diavik for
calendar 2012 as well as a life-of-mine plan which, although subject to
ongoing revision, will provide a view of the future.”

Diavik production for calendar 2012 is currently forecast to be 8.3
million carats from the mining of 2.0 million tonnes of ore and the
processing of 2.2 million tonnes of ore. The Diavik 2012 production
forecast includes approximately 1.0 million carats recovered from
reprocessed plant rejects (RPR) and 0.1 million carats from the
implementation of an improved recovery process for smaller diamonds. 
These RPR and small diamond recoveries are not included in the
Company’s reserves and resource statement.

As a result of the Company’s previously disclosed decision to hold back
some lower priced goods, the Company expects higher than normal rough
diamond inventory at January 31, 2012. The Company anticipates the sale
of this additional inventory in the first quarter of fiscal 2013.
Recent rough diamond sales prices have stabilized against a continuing
flow of lower value diamonds from Zimbabwe.

The Company held rough diamond sales in November and December, and the
January sale has just commenced. Based on the prices from the most
recent December sale and the current diamond recovery profile of the
Diavik processing plant, the Company has modeled the approximate rough
diamond price per carat for each of the Diavik ore types as follows:

     ________________________________________
    |Ore Type        |     December 2011     |
    |                |Average Price per Carat|
    |                |    (in US dollars)    |
    |________________|_______________________|
    |   A-154 South  |              $165     |
    |________________|_______________________|
    |   A-154 North  |              $215     |
    |________________|_______________________|
    |A-418 A Type Ore|              $150     |
    |________________|_______________________|
    |A-418 B Type Ore|              $100     |
    |________________|_______________________|
    |         RPR    |               $55     |
    |________________|_______________________|

Analyst and Investor Day in New York City

The Senior Management of the Company will present at an Analyst and
Investor Day on May 10, 2012, in New York City; further details of the
event to follow.

About Harry Winston Diamond Corporation

Harry Winston Diamond Corporation is a diamond enterprise with premium
assets in the mining and retailing segments of the diamond industry.
Harry Winston supplies rough diamonds to the global market from its 40
percent ownership interest in the Diavik Diamond Mine.  The Company’s
luxury brand segment is a premier diamond jeweler and luxury timepiece
retailer with salons in key locations, including New York, Paris,
London, Beijing, Tokyo, Hong Kong and Beverly Hills.

The Company focuses on the two most profitable segments of the diamond
industry, mining and retailing, in which its expertise creates
shareholder value. This unique business model provides key competitive
advantages; rough diamond sales and polished diamond purchases provide
market intelligence that enhances the Company’s overall performance.

Qualified Person and Forward-Looking Information

The reserve and resource information set out above was prepared by or
under the supervision of Calvin G. Yip, P.Eng., an employee of Diavik
Diamond Mines Inc. and a Qualified Person within the meaning of
National Instrument 43-101.

Information in this press release that is not current or historical
factual information, including information about forecast Diavik
production for calendar 2012, may constitute forward-looking
information or statements within the meaning of applicable securities
laws. Forward-looking information is based on certain factors and
assumptions regarding, among other things, mining, production,
construction and exploration activities at the Diavik Diamond Mine,
world and US economic conditions, the worldwide demand for luxury goods
and the level of worldwide diamond production. Actual results may vary
from the forward-looking information. While the Company considers these
assumptions to be reasonable based on the information currently
available to it, they may prove to be incorrect.

Forward-looking information is subject to certain factors, including
risks and uncertainties which could cause actual results to differ
materially from what we currently expect. These factors include, among
other things, the uncertain nature of mining activities, including
risks associated with underground construction and mining operations,
risks associated with joint venture operations, risks associated with
the location of and harsh climate at the Diavik Diamond Mine site, as
well as the risks associated with regulatory requirements. Readers are
cautioned not to place undue importance on forward-looking information,
which speaks only as of the date of this disclosure, and should not
rely upon this information as of any other date. While the Company may
elect to, it is under no obligation and does not undertake to, update
or revise any forward-looking information, whether as a result of new
information, further events or otherwise at any particular time, except
as required by law. Additional information concerning factors that may
cause actual results to materially differ from those in such
forward-looking statements is contained in the Company’s filings with
Canadian and United States securities regulatory authorities and can be
found at
www.sedar.com and www.sec.gov, respectively.

 

 

 

 

 

SOURCE Harry Winston Diamond Corporation


Source: PR Newswire