Thursday, July 14, 2011

Harry Winston reports second-quarter production up from year ago

Harry Winston Diamond Corp. (TSX:HW) said Thursday that second-quarter diamond production at its Diavik mine was up from a year ago, helped by an increase in the grade of the ore processed.

The diamond miner and retailer said it produced 1.79 million carats of diamonds from 500,000 tonnes of ore processed in the second quarter of 2011.

The results represented an 11 per cent increase in the number of carats produced and a four per cent increase in ore processed compared with the same period a year ago.

Harry Winston noted the Company will hold three rough diamond sales in its second quarter which ends July 31 and said that sales in both May and June saw price increases.

Diavik produced 3.14 million carats from 1 million tonnes of ore processed in the first six months of 2011.

Harry Winston said it expects the mine to produce 6.9 million carats this year as production in the second half of the year is forecast to be higher than the first half of the year.

Desjardins analyst John Hughes, who reiterated his $12-price target and "sell" rating on the stock, called the production results positive for the company.

"We maintain our view that Harry Winston remains expensive," Hughes wrote in a note to clients.

Harry Winston holds a 40 per cent stake in the Diavik mine as well as retail stores around the world.

Shares in the company were down 19 cents at $16.17 on the Toronto Stock Exchange on Thursday morning.

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