SOMBA K'E/YELLOWKNIFE - A former New York City diamond trader and major real estate developer has partnered with diamond wholesaler Esskay Gems - also based in the Big Apple - to potentially reopen the former Laurelton Diamonds plant on diamond row in the first quarter of next year.

"I can confirm that we've purchased it," said Gary Barnett. Until April, Barnett was helping fund operations at Arslanian Cutting Works, also located on diamond row.

"In spring 2008, we went into an arrangement, not an ownership structure, although we were negotiating a potential joint venture with ... Polar Bear Diamonds (Arslanian's sister plant) and Arslanian Cutting Works," said Barnett.

"In the near time ... we had an arrangement whereby we were putting up the capital and the expertise in terms of diamond cutting to operate, manage and pay for the cutting operations at Arslanian Cutting Works."

While that joint-venture never did pan out, Barnett's involvement did result in considerable improvements to the Arslanian plant - a strategy he said will enable him to make a success of the Laurelton plant.

"We upgraded the quality of the manufacturing at the (Arslanian) factory quite a bit, but at the end of the day, we were unable to come to an agreement with the owners of those factories and we therefore terminated our relationship with them."

With the possibility of a stake in Arslanian now off the table, Barnett turned his mind to other opportunities.

The Laurelton Diamonds plant, owned and operated by Tiffany and Co., closed in February, slashing 25 jobs from Yellowknife's struggling secondary diamond industry.

"Some time later, we found out that it was available for purchase. We negotiated with Tiffany and Co. and in fact did close the purchase," said Barnett.

"We would like to resume (operations) potentially as early as the first quarter of next year," he continued.

"However, it's all dependent on getting arrangements worked out with the mining companies and the government."

Asked if the plant would employ the same number of people as before, Barnett said "We would like, on a starting basis, to start up somewhere in that level of personnel (25 workers), but if things can work out the way we'd like them to work out, we would hope to expand the employment substantially in the future."