Tahera Diamond (TAH-T) has struck a deal with Tiffany & Co. that will see the New York-based jeweller buy and market all the production from the former’s planned Jericho diamond mine in Nunavut Territory, 420 km north of Yellowknife, NWT.
Tiffany will also lend Tahera $35 million of the $73 million needed to build the mine, which is expected to come online later next year and produce about 4.7 million carats over nine years.
Overall, the mine will process 5.53 million tonnes of kimberlite, or 680,000 tonnes annually, at an average diluted grade of 0.85 carat per tonne.
Investors warmed to the news, pushing Tahera’s stock up 2.5, or 7.3%, to 37 on a volume of 6.5 million shares, or six times the usual trading volume.
On the Big Board, Tiffany shed US13 to settle at US$30.99.
Tiffany is already deeply invested in Canada’s diamond-mining industry through its offtake agreement with Aber Diamond (ABZ-T), whereby Tiffany has agreed to buy at least US$50 million worth of diamonds annually from Aber for 10 years (or about a quarter of Aber’s attributable production).
Aber owns a 40% interest in the Diavik diamond mine in the Northwest Territories and markets its share of diamond production independently of Rio Tinto (RTP-N), the operator and 60% majority owner of that mine.
This spring, Aber spent US$85 million buying a 51% stake in the renowned retail diamond jeweler Harry Winston.
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