Aber Acquires 100% of Harry Winston

September 14, 2006

Aber Acquires 100% of Harry Winston

Mining company Aber Diamond Corp. has acquired the minority shareholders' interest in jewelry retailer Harry Winston for $157 million, so that it now owns 100% of the 100-year-old jeweler.

Aber, which owns 40% in the Diavik Diamond Mine in the Northwest Territories of Canada, purchased 51% of Harry Winston in 2004 for $85 million and since then has increased its equity interest to approximately 53%. According to a release, the 100% ownership of Harry Winston strengthens Aber's position as a diamond company in mining and retailing.

"The past two and half years have demonstrated the tangible benefits of linking the marketing of rough diamonds to a high-end diamond retailer in the form of improved margins at both ends of the business," says Robert Gannicott, chairman and CEO of Aber. "This acquisition solidifies our position as the world's premier publicly traded diamond company."

Since Aber's initial investment two years ago, Harry Winston's sales have grown from approximately $128 million for the full twelve months of fiscal year 2004 (including two months that were prior to Aber's acquisition) to $191 million for fiscal year 2006.

"The market for luxury goods, including diamond jewelry, is one of the fastest growing segments of the consumer market," says Thomas O'Neill, Aber's President and CEO of Harry Winston. "We believe that given the recognition of the brand relative to the size of the store network, there is an opportunity for significant growth."

The transaction values Harry Winston, on an equity basis, at approximately $330 million. Aber will finance the acquisition through a combination of cash resources and an increase to Aber's existing credit facility without impacting the existing dividend policy.

The acquisition and the expanded credit facility are expected to close by the end of September 2006.

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