Aber Q3 Results Shows Positive Earnings and Prospects

Aber Diamond earned $13.5 million on revenues of $54 million during its third quarter and the end of the first three months of commercial activity. The company lost $.6 million during the same period last year.

“The project has achieved the commercial production milestone well ahead of feasibility study estimates and production ramp-up has proceeded ahead of plan. The diamond product has exceeded expectations for quality, and therefore price, in a market place that eagerly accepts it,” says President and CEO Robert Gannicott.

Aber's net earnings for the nine month period ending October 31, totaled $24.5 million, compared to a net loss of $5.2 million in the prior year's corresponding period. The results for the nine month period include only one quarter of commercial diamond activity.

Year to date earnings include $13.8 million of unrealized foreign exchange gains, $0.7 million of which from the third quarter.

During those nine months since diamonds were first produced, Aber has received 957,000 carats from Diavik, a 40 share of production.

Year to date diamond sales totaling $54 million were realized in the third quarter. Sales revenues of $19.2 million, realized prior to the commencement of commercial production, were credited against deferred mineral property costs.

Aber's rough diamond sales, the company says, are based on a traditional five week cycle comprising of ten annual sales sights held in Antwerp. During the latest quarter, three open market sales sights were conducted through the company's rough diamond sales center in Antwerp.

Aber expects that for the fiscal year ending January 31, 2004, the company will be fully funded for its share of expected costs of the Diavik mine and related diamond processing and sales activity. Sources of funding will consist of cash flow generated from diamond sales during the fiscal year. The company also has available the remaining balance of $15 million under the Project Loan Facility.

The recently issued Diavik Diamond Mine 2004 plan calls for peak capacity of 2 million tones of processed ore to be achieved in calendar 2005.

On November 27 Aber announced that it had signed a letter of intent with the owners of Harry Winston Inc. that contemplates Aber purchasing Harry Winston Inc. in a staged transaction. The transaction is subject to the completion of due diligence, completion of documentation satisfactory to all parties, as well as regulatory approval.

An upbeat Gannicott says “We look forward to the next year with an expanded mine plan in place and a diamond market that continues to display strong demand for the Aber diamond product”.