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BHP sued over deal to sell Ekati stake to Harry Winston

Rough Diamonds from various areas of the Ekati diamond mine.

BHP Billiton

A joint-venture partner is suing BHP Billiton over its plan to sell its stake in the Ekati diamond mine and surrounding exploration properties to Harry Winston Diamond Corp.

C. Fipke Holdings Ltd. (Fipco) has accused BHP Billiton of not complying with its pre-emptive rights to buy the assets under the joint-venture agreement and alleged Harry Winston was complicit.

Fipco also alleges Harry Winston's financing arrangements for the acquisition have interfered with Fipco's ability to arrange its own financing.

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It is seeking a court order blocking the sale unless and until BHP Billiton provides Fipco with revised offers.

Harry Winston said the company and BHP Billiton believe the claim is "entirely without merit, and intend to vigorously defend the action in order to proceed with the purchase and sale of the Ekati Mine."

The company said the various groups have agreed to have to case heard on an expedited basis with a goal of a final ruling no later than April 15.

The Ekati Mine deal consists of the Core Zone, which includes the mine and other permitted kimberlite pipes, as well as the Buffer Zone, an adjacent area that also has kimberlite pipes and may be developed.

Harry Winston has agreed to pay BHP Billiton $400 million for its 80 per cent interest in the Core Zone and $100 million for its 58.8 per cent interest in the Buffer Zone.

Fipco owns a 10 per cent interest in each of the Core Zone and Buffer Zone.

Stewart Blusson also holds a 10 per cent interest in the Core Zone and Buffer Zone, while Archon Minerals Ltd. holds a 31.2 per cent interest in the Buffer Zone.

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Harry Winston said neither have issued a claim against BHP Billiton or the company and said they do not plan to do so.

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