(The Canadian Press) TORONTO - BHP Billiton Ltd. (NYSE: BHP, Stock Forum) is selling its diamonds business to Toronto-based Harry Winston Diamond Mines Ltd. (TSX: T.HW, Stock Forum) (NYSE: HWD, Stock Forum) for US$500 million in cash.
The deal includes the mining Anglo-Australian mining company's stake in the Ekati diamond mine in the Northwest Territories, Harry Winston said in a press release.Under the deal, BHP Billiton's employees working at Ekati, in Yellowknife and in diamonds marketing in the Belgian city of Antwerp will join Harry Winston.
Harry Winston already owns a 40 per cent stake in the Diavik mine in the Northwest Territories in a joint venture with Rio Tinto PLc (NYSE: RIO, Stock Forum), another Anglo-Australian mining giant.
The Ekati mine is Canada's first diamond mine — is 310 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle.
BHP Billiton says the sale will see it take a $200-million charge related to the carrying value of the assets.
BHP Billiton's stake in the project includes an 80 per cent interest in the existing operations and a 58.8 per cent interest in the buffer zone joint venture, primarily focusing on exploration.
Harry Winston shares fell 3% Tuesday to $13.03, leaving the company with a market cap of $1.1 billion, based on 84.9 million shares outstanding. The 52-week range is $15.80 and $9.89.