Mining Segment

Diavik Background
Located in Canadas Northwest Territories
300 km north of Yellowknife
1991 Land staked
1992 Diavik JV formed with Rio Tinto
1994 A21, A154S, A154N and A418 pipes
discovered
1997 Pre-feasibility study

2001 Construction starts in January

2002 A154 dike complete
2003 Production started. The Company
received its first shipment of diamonds
in January

2010 Underground production started

2012 One million tonnes of ore produced
from underground mining

Exploration Potential
More than 240,000 hectares
(2,400 square kilometres) on the
remaining joint venture holdings
Harry Winston has staked
226,000 acres (915 square
kilometres) southwest of the
existing mine site

Diavik Claim Known Kimberlite Pipes

Regional Known Kimberlite Pipes
Drill Hole Kimberlite Intersection

Open Pit Mining

Revenue Drivers
Ore

Grade

Price

How much ore is there?

How many diamonds?

What are they worth?

Shape of ore body

Grade carats per tonne

Type of kimberlite

Size distribution coarseness

Each ore type has different

diamonds
Price depends upon many factors
Size of the stone

Can it be mined economically?

Can you recover them?

Economic factors

Process plant factors

Location
Mining method

Sieve size cut-off (i.e., reject

anything less than 1mm)

Recovery

Recovery methods
(grease tables, X-ray, etc.)

Distribution and sales

Breakage

Shape of the stone

Colour
Clarity
Whats the market like?

Ore and Grade Estimates A 418

A-418 Sample drill holes

Samples by Elevation
2010

Ore and Grade Estimates

2011

A-418
Proven
Reserve
190m

190m

A-418
Probable
Reserve
30m
0m

A-418
Inferred
Resource
Exploratory

2009

-180m
-240m

Size Distribution (A154S)

Price Estimates
Size Distribution
Log Normal theory
Log Norm Image

Price per Size

Chart with line of stones vs. log price, Columns of Value vs. log price

Existing Pipes

How confident are you that you know the tonnage and grade?
How are you going to mine it economically?

Improving Economic confidence (mining

plan, marketing costs, etc.)

Reserves and Resources

PROVEN

RESERVES

PROBABLE

Tonnes

Grade

Mining

Tonnes

Grade

Mining

A154S

High

High

High

High

Medium

High

A154N

High

High

High

High

Medium

High

A418

High

High

High

High

Medium

High

RESOURCE

MEASURED
Tonnes
Grade
Mining

INDICATED
Tonnes
Grade
Mining

INFERRED
Tonnes
Grade
Mining

A154S

Medium

Limited

Medium

A154N

Medium

Drilled

Medium

A418

Medium

Limited

Medium

Limited

Limited

Limited

A21

High

High

Planning

Medium

Medium

Limited

Improving Geological knowledge and confidence

11

Diavik Diamond Mine Reserve and Resource Statement Update1

Total reserves increased from 52.9M carats at Dec. 31, 2010 to 58.9M carats at Dec. 31,
2011

0.9M tonnes of ore was added to the reserve base

The grade increased from 2.9 carats per tonne at Dec. 31, 2010 to 3.1 carats per tonne
at Dec. 31, 2011
Approximately 20% of the new reserves added at Dec. 31, 2011 was an upgrade of existing
resources, but majority is new material at depth
An ambitious deep drilling and sampling program in 2011 focused on A-154 North and A-418
resulted in a significant addition of new reserves
The majority of the increase came from the A-418 kimberlite pipe
Processing of the A-154 North samples is planned for 2012 with results expected to be
incorporated in the Dec. 31, 2012 reserve and resource statement
1

On a calendar year basis for 100% of the Diavik Diamond Mine

12

Diavik Diamond Mine Reserves and Resources Statement

PROVEN RESERVES
Mt
ct/t
M ct

PROBABLE RESERVES
Mt
ct/t
M ct

A154S
A154N
A418
TOTAL
Open Pit (A-418)
Underground

1.6
3.1
0.7

4.0
2.3
4.0

6.3
7.1
2.8

1.4
4.9
7.3

3.4
2.2
3.8

4.7
10.7
27.4

2.9
8.0
8.0

3.7
2.2
3.8

10.9
17.8
30.2

0.7
4.7

4.0
2.8

2.8
13.3

0.6
12.9

3.8
3.1

2.3
40.5

1.3
17.6

3.9
3.1

5.0
53.8

Total Reserves

5.4

3.0

16.1

13.5

3.2

42.8

18.9

3.1

58.9

MEASURED

PROVEN and PROBABLE

Mt
ct/t
M ct

INDICATED

INFERRED

Mt

ct/t

M ct

Mt

ct/t

M ct

Mt

ct/t

M ct

A154S

0.04

3.5

0.1

A154N

2.2

2.4

5.3

A418

0.3

2.7

0.8

A21

3.6

2.8

10.0

0.4

2.6

1.0

0.8

3.0

2.3

Total Resource

3.6

2.8

10.0

0.4

2.6

1.0

3.3

2.6

8.5

Note: Totals may not add up due to rounding. As of December 31, 2011. The values shown are for 100% of the Diavik Mine.

13

Diamond Recovery
Process Plant Diagram

Potential Issues
Breakage
Diamonds in oversized
Diamonds in undersized
Diamonds missed by

X-ray
Grease tables

14

Forecasting Production

15

Revenue Estimate - Factors

Factors

Impact

Theoretical Example

Grade increase

Carats +
Value per tonne +
Price per carat =

From 2.5 to 3 cts / tonne

Carats up 20%
Price same
Revenue increase 20%

Smalls recovery improved

Grade & Carats +

Value per tonne +
Price per carat

Small diamond project

Carats increase 15%
Price decrease 10%
Revenue up 3.5%

Bottom Sieve decreased

Carats +
Value per tonne +
Price per Carat

From 1.6mm to 1mm cut-off

Carats increase 15%
Price decrease 10%
Revenue increase 3.5%

Breakage reduction

Carats =
Price per carat +
Value per tonne +

25% breakage avoided

Carats same but coarser mix
Price increase 5%
Revenue increase 5%

Average Price per Carat (US$) by Ore Type

2011 & 2012 MODELLED SALES PRICES1
(in US dollars)

2011
March

April

May

June

July

A-154 South

$140

$160

$165

$180

A-154 North

$180

$205

$215

A-418 A
Type Ore

$130

$150

A-418 B
Type Ore

$90

Reprocessed
Plant Rejects
(RPR)

Dec

2012
Feb

Mar

$200

$165

$160

$160

$230

$260

$215

$205

$205

$150

$165

$185

$150

$145

$145

$105

$105

$110

$120

$100

$100

$100

$65

$55

$55

$55

Approximate rough diamond price per carat based on the Companys rough diamond sales prices and the current recovery profile at the
Diavik processing plant.
1

17

Diavik Diamond Ore Mix and Average Price

100%

$200

90%

$190

80%

$180

70%

$170

60%

$160
A21

50%

$150

40%

$140

A418
A154N
A154S

30%

$130

20%

$120

10%

$110

0%

$100

18

Diavik Diamond Mine Summary

Canadas largest diamond mine located in the Northwest Territories, 220km south of Arctic Circle

Nearly 59 million carats1 of diamond reserves in the current kimberlite pipes being mined, 11 million
carats of measured and indicated resources and 8.5 million carats of additional inferred resources2

All major capital expenditure projects completed for existing mine reserves including development of
the underground operation

The development for the A-21 pipe would require major CAPEX contributions to build the dike and
capital equipment

Exploration initiatives on both Diavik property and Harry Winston property

To grow rough business, potentially add sources of rough diamond supply

Strong free-cash flow generation outside of development of A-21 CAPEX contributions

16.1 million carats of proven reserves and 42.8 million carats of probable reserves as at Dec. 31, 2011 for 58.9 million carats of total proven and probable
reserves. (Reserves are 100% of Diavik Mine, in which the Company has a 40% interest.)
2 10 million carats of measured resources, 1 million carats of indicated resources, and 8.5 million carats of inferred resources as at Dec. 31, 2011 for a total of nearly
19.5 million carats of additional indicated and inferred resources (100% basis). This includes A-21 plus additional inferred resources for the three active pipes.

Diamond Experts with Exceptional Reputation in Northwest Territories

20

21

Diavik Underground

22

Underground Mining Methods

23

Underground Mining Methods

Cemented
Rock Fill

24

Underground Mining Methods Sublevel Retreat (SLR)

25

Underground Mining Methods A418 Sub-level Retreat (SLR)

Simple mining method
no fill required

Potential for increased

production rate
Significant cost saving

26

154 S Sublevel Retreat April 2012

27

154 S Sublevel Retreat 2012 April 2012

28

Analyst Day Agenda and Outline:

2:15 Welcome and Introduction by Bob Gannicott
2:20 Remarks The Honourable John Prato
2:25 Diamond Background Bob Gannicott
Overview of Harry Winston Business and Strategy Bob Gannicott
2:40 The Diamond Market in Depth Richard Chetwode and Jim Pounds
3:10 Diamond Mining Segment Ray Simpson and Mats Heimersson
3:40 20 minute break with tea-time refreshments
4:00 Overview and Strategy of Luxury Brand Business Frdric de Narp
4:40 Financial Review Cyrille Baudet
5:05 Q&A Session hosted by Bob Gannicott
5:35 Closing remarks Bob Gannicott
5:45 Departures for Salon
6:00 Salon cocktail
7:30 Cocktail party ends