Aber and Tiffany create unique North American diamond industry alliance
VANCOUVER, July 19 /CNW/ - Aber Resources Ltd. (TSE-ABZ, NASDAQ-ABERF)
and Tiffany & Co. (NYSE-TIF) have created a unique North American diamond
industry alliance through a joint arrangement and an equity investment by
Tiffany in Aber. The agreement governs the sale of a substantial portion of
the value of Aber's 40% share of the anticipated production of the Diavik
Diamond Project in Canada's Northwest Territories.
Tiffany & Co. will purchase 8 million treasury shares of Aber for a total
of Cdn.$104 million ($13 per share). Aber will then have 53,827,883 shares
outstanding, (56,072,883 fully diluted), with Tiffany & Co. holding 14.3% on a
fully diluted basis. Mr. James Fernandez, Executive Vice President and Chief
Financial Officer of Tiffany will be appointed to the Board of Directors of
Aber immediately following the Annual General Meeting on July 30, 1999.
Tiffany & Co. is the world leader in sales of high quality diamond
jewelry. It has a pre-eminent position in the American retail diamond
jewellery market, the dominant diamond market of the world, and has been very
successful in expanding this brand recognition internationally.
Aber Resources Ltd. is the Canadian based 40% owner of the Diavik
Diamonds Project. The 60% owner, and operator, is Diavik Diamond Mines Inc., a
wholly owned subsidiary of Rio Tinto plc of London, England.
With the completion of this transaction, Aber will have Cdn.$214 million
of working capital and anticipates raising the balance of its share of the
capital cost of the project without equity financing. The project is now in
the final phases of government approvals with construction expected to
commence early in 2000 subject to receipt of final permits and approval of the
boards of both Aber and Rio Tinto.
Aber will supply a proportion of all sizes of diamonds in the customary
high qualities demanded by Tiffany. The arrangement channels rough diamond
production directly from the mine to the retailer without affecting the rough
diamond market.
The commercial arrangement will allow both companies to share in the
financial benefits of a segment of the diamond trade not normally accessible
to either a mine producer or a diamond jewellery retailer. |
