October 7, 2004
Tiffany Finances Another Canadian Diamond Mine
Tiffany & Co. has entered into a memorandum of understanding with Tahera Diamond Corp. with respect to diamond purchases, marketing and project financing for Tahera's Jericho diamond mine in Nunavut, northeast of Yellowknife in Canada's Northwest Territories. Tiffany will purchase or market all of the diamond production from Jericho and provide Tahera with a $35 million (Canadian) loan facility to assist in financing construction of the project.
Tiffany will purchase a significant portion of the diamond production from Tahera's Jericho Diamond Project for its own manufacturing requirements, and will sell the balance of the production on behalf of Tahera into the international market. The agreement extends over the entire life of the project, which is estimated to be nine years.
According to a press release from Tahera, the company received expressions of interest from several parties with regard to a diamond marketing and purchase agreement for its Jericho Diamond Project, and after careful consideration, it selected Tiffany. Tahera says it believes that the association with one of the world's premier diamond jewelers will be highly beneficial for the Company.
"Obtaining the support and commitment from Tiffany is a major milestone in Tahera's history and reflects very favorably on the quality of the diamonds which will be mined from the Jericho Diamond Project. Entering into a diamond purchase and marketing agreement with Tiffany will provide Tahera with the opportunity to realize superior values for its diamond output and enables the Company to focus on exploration and mine development. Tiffany is a pre-eminent retail diamond jeweler and we are very pleased to be a supplier of high-quality diamonds to this world class organization," says R. Peter Gillin, chairman and chief executive officer of Tahera.
"To support our growing sales of diamond jewelry, Tiffany's strategy is to align with direct-from-mine sources that can help us to secure increased availability at our quality levels. We are excited to enter into this agreement with Tahera, which meets those criteria," says James N. Fernandez, executive vice president and chief financial officer of Tiffany & Co. "Tiffany benefits in terms of expanded access to rough diamonds and favorable costs, as compared with typical polished diamond sourcing arrangements, and will be able to leverage its established diamond infrastructure and organization." Tiffany & Co. also operates two diamond processing facilities.
Completion of the transactions contemplated in the memorandum of understanding are subject to entering into formal agreements, the approval of the board of directors of Tahera, and receipt of all requisite regulatory approvals by Tahera. Definitive documents are being prepared and are expected to be signed on or about October 22, 2004. All due diligence has been completed by both parties.
Tahera Diamond Corp is a Canadian diamond company focused on developing its wholly-owned Jericho Diamond Project as Canada's next and Nunavut's first diamond mine. Tahera has several other very prospective diamond projects in Canada's prolific Slave Craton. Tahera is financed with over $11 million cash on hand.