Two weeks ago I wondered what was next for company formerly known as the Harry Winston Diamond Corp. Now some of those plans are coming to light with the company's first earnings report under its new name, Dominion Diamond Corp.
The New Dominion Diamond Corp. logo Since 2006, the company operated as two segments: a luxury retail jewellery and watch division under the iconic Harry Winston brand name and a diamond mining business. The company closed its sale of the luxury brand segment to the Swatch Group Ltd. on March 26 in a deal valued at $1 billion. As part of the closing of the transaction, the company changed its name to Dominion Diamond Corp. and its common shares now trade on both the Toronto and New York stock exchanges under the symbol DDC. Swatch Group of course kept the Harry Winston brand name. Now Dominion Diamond Corp. operates solely as diamond mining and marketing business with its 40 per cent stake in the Diavik Diamond Mine. Its fourth quarter earnings report reflects this with the results of the luxury brand segment treated as discontinued operations for accounting and reporting purposes. It is also finalizing the purchase of the Ekati Diamond Mine, including its diamond sorting and sales facilities. In fact, the company said that it has received regulatory approval to close the sale and it expects to the close the deal as early as Wednesday (today). Both mines are in the Northwest Territories of Canada.
According to reports, the company, still flush with cash from the sale of Harry Winston, is looking to buy the remaining 60 per cent interest in the Diavik Diamond from mining company Rio Tinto, which has stated a desire to pull out of the diamond business. "The last year and this first quarter has been a time of great positive change for the company, including changing its very identity," said Robert Gannicott, Dominion Diamond Corp.'s chairman and CEO. "This change reflects a focus on the production, sorting and sale of diamonds from Northern Canada, a region that we know and understand well. The acquisition of the Ekati Mine and its operating team (gives) us operational control of both a producing mine and development opportunities in the large scale resources on the Ekati property. Together with our exploration acreage adjacent to the Ekati and Diavik properties, this positions us from grass-roots exploration through development opportunities. We also become the largest supplier of Canadian diamonds sold through an expert sorting and marketing chain that we have perfected through the years of Diavik production." The company is returning to its roots as a diamond mining business (known then as Aber Corp.) before it tried its hand at luxury retail. It obviously sees its future as the largest supplier of conflict-free Canadian diamonds and having a large, international sorting and marketing system to move its diamonds. Get ready for more announcements from the company as it shores up its niche.
