UPDATE 2-Kinross sells interests in Diavik, Harry Winston

* Selling stake in diamond mine for $220 mln

* Also selling its 19.9 pct stake in Harry Winston

* Harry Winston shares tumble, Kinross shares gain
(Adds details, analyst comments; figures in U.S. dollars,
unless noted)

By Euan Rocha

TORONTO, July 23 (BestGrowthStock) – Gold miner Kinross (K.TO: ) is
set to rake in a windfall from the sale of its stake in diamond
miner and retailer Harry Winston (HW.TO: ) and its interest in
the Diavik diamond mine in Canada’s far north.

Kinross, which acquired both interests from Harry Winston
for $150 million in March 2009, said on Friday it plans to sell
the stakes in separate deals that could net the company a total
of about $440 million.

“When they did the deal a year and a half ago, Tye looked
around, saw something that was undervalued, saw an opportunity
and took advantage of it. He is now crystallizing the profits,”
said Dundee Securities analyst Paul Burchell, referring to
Kinross Chief Executive Tye Burt.

Burt, who worked as a banker for over 15 years before
moving into management roles in the mining industry, has been
president and CEO of Kinross since 2005. He oversaw the miner’s
roughly C$1 billion takeover of Aurelian Resources in 2008, a
deal that gave it ownership of the big Fruta del Norte gold
discovery in Ecuador.

Burchell believes Kinross will plow the proceeds from the
Diavik and Harry Winston deals back into its new projects and

Kinross owns mines and projects across the Americas that
stretch all the way from Alaska to Chile. It also owns a 75
percent interest in the Kupol gold-silver project in eastern
Russia. The company is currently in the process of developing
its Lobo-Marte and Cerro Casale projects in Chile, along with
Fruta del Norte.


Toronto-based Kinross said it would sell its interest in
the Diavik diamond mine back to Harry Winston for $220

Diavik, Canada’s largest diamond mine, is located in the
Northwest Territories and began operating in 2003. It has
produced more than 50 million carats of rough diamonds.

Diavik is 60 percent-owned by Rio Tinto (RIO.AX: ) (RIO.L: ).
Harry Winston will regain full control of its 40 percent
minority interest, when it closes its deal with Kinross.

Harry Winston is paying Kinross $50 million cash, a note
payable in the amount of $70 million and about 7.1 million
Harry Winston common shares worth about $100 million.

Separately, Kinross said it would sell its 19.9 percent
stake in Harry Winston to a group of financial institutions.
Terms of the deal were not disclosed, but the 15.2 million
shares are worth about C$221 million, based on Thursday’s
closing price.

Harry Winston had sold the stakes in itself and Diavik to
Kinross in an attempt to shore up its balance sheet at a time
when the diamond industry was hard hit by the global economic

Other than the new shares issued to it by Harry Winston,
Kinross will not own any interest in the diamond retailer
following the close of both deals. Kinross will also forfeit
its right to nominate a member to Harry Winston’s board.

The company also said it has no intention at this time of
acquiring any further securities of Harry Winston.

Shares of Harry Winston fell 10.7 percent to $12.49 on the
New York Stock Exchange and were down 11 percent at C$12.96 in
Toronto. Kinross was up nearly 2 percent on both the NYSE and
the Toronto Stock Exchange.

Stock Market Investing

($1=$1.04 Canadian)
(Reporting by Euan Rocha; editing by John Wallace)

UPDATE 2-Kinross sells interests in Diavik, Harry Winston