Last updated on April 20, 2014 at 21:20 EDT

Harry Winston Diamond Corporation reports Diavik Diamond Mine Third Quarter 2012 Update

October 16, 2012

TORONTO, Oct. 16, 2012 /PRNewswire/ – Harry Winston Diamond Corporation
(TSX:HW, NYSE:HWD) (the “Company”) reports that in the third calendar
quarter of 2012, the Diavik Diamond Mine produced 1.93 million carats
from 0.52 million tonnes of ore processed, as compared to 1.93 million
carats from 0.64 million tonnes of ore processed in the comparable
quarter of the prior year. The 19% decline in ore processed in the
quarter was due to a shift in production from the lower grade, lower
value A-418 open pit to higher grade and higher value ore from the
underground mining of the A-154 pipes. Open pit mining of the A-418
kimberlite pipe concluded in September, although processing of open pit
ore from the A-418 kimberlite pipe will continue into the fourth
calendar quarter of 2012.

For the nine months ended September 30, 2012, the Diavik Diamond Mine
produced 5.33 million carats from 1.59 million tonnes of ore processed
compared to production of 5.08 million carats from 1.67 million tonnes
of ore processed in the comparable period of the prior year. Production
for the nine months ended September 30, 2012, consisted of 3.47 million
carats produced from 1.01 million tonnes of ore from the A-418
kimberlite pipe, 1.09 million carats produced from 0.25 million tonnes
of ore from the A-154 South kimberlite pipe, and 0.66 million carats
produced from 0.33 million tonnes of ore from the A-154 North
kimberlite pipe. Also included in production for the nine months ended
September 30, 2012, was an estimated 0.10 million carats from
reprocessed plant rejects (“RPR”). These RPR are not included in the
Company’s reserves and resource statement and are therefore incremental
to production.

Diavik’s full-year target production is expected to be approximately 7.4
million carats from the mining of 2.0 million tonnes of ore and the
processing of 2.2 million tonnes of ore. The decrease in carats from
the original plan is primarily due to deferring the processing and
recovery of lower value carats from the RPR in favour of processing
underground ore containing higher valued carats. Open pit mining of
approximately 1.0 million tonnes of ore was exclusively from the A-418
kimberlite pipe. Underground mining of approximately 1.0 million tonnes
of ore is expected to be sourced principally from the A-154 South and
A-154 North kimberlite pipes, with some production from A-418. Included
in the estimated production for calendar 2012 is approximately 0.3
million carats from RPR and 0.1 million carats from the implementation
of an improved recovery process for small diamonds. These RPR and small
diamond recoveries are not included in the Company’s reserves and
resource statement and are therefore incremental to production. The
expected run-of-mine ore production for the calendar year is generally
consistent with the 2012 plan although some RPR production originally
planned for calendar 2012 has been deferred to calendar 2013, when the
process plant is expected to have spare capacity.

The rough diamond market has stabilized through the third calendar
quarter as demand has improved. The Company expects higher than normal
rough diamond inventory at October 31, 2012, although a large portion
of the inventory carried at July 31, 2012, has been sold. Based on
prices from the Company’s rough diamond sales during the fiscal
quarter, and the current diamond recovery profile of the Diavik
processing plant, the Company has modeled the current approximate rough
diamond price per carat for each of the Diavik ore types in the table
that follows:

    |Ore Type   |     October 2012      |
    |           |Average Price per Carat|
    |           |    (in US dollars)    |
    |A-154 South|              $135     |
    |A-154 North|              $170     |
    |    A-418  |               $95     |
    |      RPR  |               $45     |

Forward-Looking Information

Information included herein that is not current or historical factual
information, including information about mining activities at the
Diavik Diamond Mine and estimated production from the Diavik Diamond
Mine, 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, future
diamond prices, 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,
fluctuations in diamond prices, and changes in US and world economic
conditions. 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.

About Harry Winston Diamond Corporation

Harry Winston Diamond Corporation is a diamond enterprise with premium
assets in the mining and retail 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, Shanghai, Hong Kong, Singapore, Tokyo and Beverly

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.

SOURCE Harry Winston Diamond Corporation

Source: PR Newswire