Aber Q2 Net Earnings More then Quadruple

Aber's sales and earnings from rough diamond sales and high-end retailer Harry Winston jumped dramatically during the second quarter, recording sales of $84.5 million compared to $52.3 million in the preceding quarter and net earnings of $12.3 million compared to $2.8 million for the first quarter.

Aber's rough diamonds are from its 40 percent share in the Canadian Diavik diamond mine. It also has a 51 percent interest in Harry Winston, which operates six retail salons around the world.

Its share of diamonds recovered from the Diavik mine were 0.9 million carats for the quarter ended June 30, and 1.5 million carats for the first half of the year.

Sales for the quarter totaled $84.5 million, which includes sales of $28.2 million from Harry Winston for the quarter. This compares to sales of $52.3 million in the preceding quarter, which included sales of $10.1 million from Harry Winston for the month of April, and $15.1 million in the comparable quarter of the prior year.

The rise in sales resulted from leaping rough diamond prices and the first inclusion of a full quarter of sales from Harry Winston (compared to only one month of sales during the first quarter of this year).

Harry Winston's U.S. salon sales increased across a range of products with jewelry sales above $100,000 being particularly strong due to the continued strength in the U.S. luxury retail market. New salon openings in Las Vegas and Taipei are scheduled for the third quarter of this year.

Harry Winston believes that numerous factors including expanding global wealth and increased retail spending have contributed to significant opportunities in the luxury retail jewelry market. Harry Winston's growth strategy includes building on its existing brand equity through a new marketing campaign, geographical expansion, product development and enhancing the salon environment.

Cash operating costs from the Diavik Mine decreased during the quarter to $19 per carat compared to $24 per carat during the first quarter of 2004.

Production from the Diavik Mine continues to exceed the levels previously forecast, the company said, due to increased processing rates and predicted grade recovery. An annualized rate of ore processing above 2.0 million tons per year was achieved on a consistent basis in the quarter.

The low grade mud-rich unit surrounding A154 South pipe continues to have a dilutive effect on recovered grade, but is diminishing over successively lower bench levels. After adjustment for the dilutive effects of the mud, and factors for metallurgical recovery, recovered grade reconciles against the mine plan grade forecast.

Operations within the A154 pit and process plant will continue to focus on the A154 South pipe through the third quarter. The grade dilution associated with the low-grade mud-rich unit surrounding the A154 South ore body is expected to continue into the third quarter as mining advances through the 320m bench level, beyond which the mud unit is not observed.