Minority partner backs down in Harry Winston mine battle

Harry Winston Diamond Corp said on Monday that a lawsuit filed by a minority partner in the Ekati diamond mine in Canada's Northwest Territories has been dropped, clearing the way for Harry Winston to take over the mine from Australia's BHP Billiton Ltd.

Harry Winston's $500 million deal to take control of Ekati from partner BHP, announced in November, hit a snag last month when another partner, C. Fipke Holdings Ltd, which has a right of first refusal, filed a claim alleging that BHP had failed to comply with the joint venture agreement.

Fipke has formally discontinued the action and all of the partners in Ekati have now waived their rights of first refusal with respect to the agreement, Harry Winston said.

The deal, which must still meet regulatory approvals, includes the current operating mine along with a "buffer zone" with development potential. The mine is located just south of the Arctic Circle.

Harry Winston said last month it will sell its jewelry arm to Switzerland's Swatch in a $1 billion deal that leaves the Canadian company free to concentrate on its mining business.

Shares of Harry Winston were up 0.82 percent at C$14.82 on Monday morning on the Toronto Stock Exchange.