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SOMBA K'E/YELLOWKNIFE
Prospective buyers of the Ekati Diamond Mine have come to light, following a report by Bloomberg L.P.

An aerial view of the Ekati Diamond Mine, located about 310 km northeast of Yellowknife. Mining giant BHP Billiton is extending its review of whether or not it will sell its diamond business, possibly until June. - courtesy of BHP Billiton

Harry Winston Diamond Corp., and groups led by New York-based global investment firms Apollo Global Management LLC, and KKR and Co., are said to be in talks with BHP Billiton Ltd. to buy the mine.

In a bid, Apollo has teamed up with Eira Thomas, former chair of Canadian diamond exploration and development company Stornoway Diamond Corp., two unnamed sources told Bloomberg.

The sale of Ekati is estimated to be worth between US$500 million and US$750 million, and could be struck in the next month, according to the sources.

"We mustn't assume sale of the mine is a done deal," stated Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, in an email to Yellowknifer, noting that despite growing speculation surrounding the future of the world-class diamond mine, BHP might still opt to run the mine to closure.

The possibility of extending the mine's life -- currently scheduled to stretch into 2018 -- is an option for potential buyers, Hoefer said, adding the BHP Billiton claim block is a "particularly rich region for kimberlite pipes," with just seven of the 156 diamond-hosting formations discovered on the property presently being mined for diamonds.

"If the mine is sold -- and that is still not a done deal as BHP’s CEO reminds us -- Northerners should hope that whoever buys it will use their creativity to maximize the value from the property and extend its life," he stated.

The companies named as potential buyers have declined comment.

Laura Kiernan, Harry Winston director of investor relations, stated the company has no comment about whether it is looking to grow its diamond business assets -- comprised of a 40 per cent ownership interest in the Ekati-area Diavik Diamond Mine; and its international luxury diamond retail business.

London-based Rio Tinto plc, which owns the remaining 60 per cent interest of Diavik through its wholly-owned, Yellowknife-based subsidiary Diavik Diamond Mines Inc., recently entered an unrelated asset purchase agreement with BHP Billiton.

BHP announced in last month that it had exercised the option to sell its 37 per cent interest in South African operation Richards Bay Minerals, to Rio Tinto, exiting the titanium minerals industry.

"While we have announced we will be exiting the titanium minerals industry, we have not exited the Diamonds industry and have not announced that we will," BHP spokesperson Bronwyn Wilkinson told Yellowknifer in an email. "Our announcement was that our position in the Diamonds industry was under review and that process is ongoing."

The company first announced it is reviewing its diamonds business -- now solely comprised of its 80 per cent interest in Ekati -- last November.

The remaining 20 per cent interest in Ekati is held by Chuck Fipke and Stewart Blusson, the geologists responsible for the discovery of the mine at Lac de Gras, located about 310 km northeast of Yellowknife.

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