Last updated on April 18, 2014 at 13:57 EDT

Harry Winston Diamond Corporation Updates Status of Ekati Acquisition

January 17, 2013

TORONTO, Jan. 17, 2013 /PRNewswire/ – Harry Winston Diamond Corporation
(TSX:HW, NYSE:HWD) (the “Company”) reports that C. Fipke Holdings Ltd.
(“Fipco”) has commenced an action in the Ontario Superior Court of
Justice against BHP Billiton Canada Inc. and certain of its affiliates
(collectively, “BHP Billiton”), the Company and its subsidiary, Harry
Winston Diamond Mines Ltd., as well as against Dr. Stewart Blusson
(“Blusson”) and Archon Minerals Limited (“Archon”).  The claim alleges
that the offers made by BHP Billiton to Fipco do not comply with
Fipco’s pre-emptive rights under the joint venture agreements for the
Ekati Mine, and that the Company was complicit in this alleged

As disclosed in the Company’s news release dated November 13, 2012, the
Company has agreed to purchase from BHP Billiton an 80% interest in the
Core Zone Joint Venture and a 58.8% interest in the Buffer Zone Joint
Venture.  As contemplated in the share purchase agreements, BHP
Billiton offered its interests in the joint ventures to Fipco, Blusson
and Archon, the minority joint venture parties.  Fipco, which holds a
10% interest in each of the Core Zone and Buffer Zone Joint Ventures,
also alleges in its statement of claim that, among other things, the
Company’s debt financing arrangements for the acquisition have
interfered with Fipco’s ability to arrange its own financing.  The
claim seeks an order of the court prohibiting the Company from
purchasing BHP Billiton’s interests unless and until BHP Billiton
provides Fipco with revised offers.  Blusson, who holds a 10% interest
in the Core Zone, and Archon, which holds a 31.2% interest in the
Buffer Zone, have not issued a claim against BHP Billiton or the
Company in respect of this issue, and have advised that they do not
intend to do so.

The parties to the litigation have entered into an agreement which
provides for the trial and any appeal to be conducted on an expedited
basis, with a view to obtaining a final ruling no later than April 15,
2013.  The agreement provides that, if such ruling is in favour of the
Company and BHP Billiton, the Company’s purchase of BHP Billiton’s
joint venture interests in the Ekati Mine may be completed before May
15, 2013 without re-triggering the pre-emptive right provisions of the
joint venture agreements.

The Company and BHP Billiton believe that the claim by Fipco is entirely
without merit, and intend to vigorously defend the action in order to
proceed with the purchase and sale of the Ekati Mine.  The parties are
continuing with the regulatory approval process, and the Company
expects to be in a position to complete the transaction following
resolution of the litigation.

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.

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

SOURCE Harry Winston Diamond Corporation

Source: PR Newswire