Vancouver — Canada’s first and only diamond mine continued to crank out the precious stones over a 16-month period that ended May 31, driving 29%-owner Dia Met Minerals (DMM-T) to a profit of $62.21 million (or $2.01 per share).
The Kelowna-based company, which is in the midst of being taken over by BHP-Billiton (BHP-N), changed its fiscal year-end from Jan. 31 to May 31, resulting in the 16-month reporting period.
Ekati produced 3.6 million carats during the period, selling them at an average price of US$165 per carat, and strong global demand for the stones propelled Dia Met’s revenues to $163.7 million.
The company continued to pay down its debt obligations, which totalled $106.88 million at the end of May. This was down from $204.7 million on Jan. 31, 2000. Since August of last year, Dia Met has applied 90% of its share of cash flow to repaying its debt and 10% to the funding of corporate activities.
Situated 300 km northeast of Yellowknife, Ekati is operated and 51%-owned by BHP Diamonds, a subsidiary of BHP. The remaining 20% is split between geologists Charles Fipke and Stewart Blusson.
In July, BHP offered to increase its stake in Ekati to 80% through a US$585-million bid for Dia Met. The major has acquired 98.6% of Dia Met’s Class A subordinate voting shares and 88.7% of its Class B multiple voting shares.
All the conditions of BHP’s $21-per-share offer have been met, including a minimum acceptance of 75% of both classes of shares.
BHP has received all the necessary approvals. Final clearance from the Belgian competition authorities came in mid-June. The company is exercising its statutory right to acquire all of the remaining Class A shares.
Shares of Dia Met will be de-listed from the American Stock Exchange but will keep their listing on the Toronto Stock Exchange.
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