Thursday July 13, 11:23 am Eastern Time
De Beers chairman defends bid for Winspear
(UPDATE: Updates with further comments, detail on Snap Lake, shares)
By Ben Hirschler
LONDON, July 13 (Reuters) - De Beers Chairman Nicky Oppenheimer on Thursday defended the diamond giant's bid for Canadian miner Winspear Diamonds Ltd (Toronto:WSP.TO - news) and dismissed an upbeat valuation produced by the Vancouver-based firm.
``We think our bid is a fair and reasonable price,'' he told a news conference, adding that sharply increased valuations cited by Winspear should be seen in the context of the low share price before De Beers made its approach.
Winspear shares were trading around C$2.2 prior to De Beers's rare hostile bid of C$259 million ($175 million), or C$4.25 per share, on June 26.
Winspear, which is fiercely contesting the bid, on Tuesday published an independent study showing its diamond project in Canada's North to be much richer than earlier believed.
The Canadian company said the scoping study showed mineable tonnage at its rich Snap Lake diamond project in the Northwest Territories to be 39.5 million tonnes at 1.70 carats per tonne, compared with an earlier 12.6 million tonnes at 1.75 carats.
It said revenue from the project would be C$11.5 billion, up from a previously projected C$3.8 billion.
De Beers has so far been unsuccessful in finding a significant diamond discovery in Canada and Snap Lake -- which would be its first major producing asset outside Africa -- would give it the foothold it wants in the country.
Canada is expected to produce about 10 percent of the world's diamonds by 2010.
Oppenheimer said diamond mining remained central to the De Beers business, despite a radical new marketing strategy unveiled this week which shifts the group's focus from controlling supply to boosting demand.
In a an increasingly competitive world, De Beers would be on the look-out for other possible acquisitions, he added.
``At the moment we are not thinking seriously about taking over anyone else. But De Beers is in the diamond business so if other opportunities should arise we would certainly look at them,'' he told a news conference.
Winspear shares were down 10 Canadian cents at C$4.57 in Toronto on Thursday, while De Beers was at 177.40 rand, up 1.40, on the Johannesburg Stock Exchange.
PHIL |
