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 non-compliance.
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