Helped by Tax Break, Aber Q1 Profits Leap 76%

Aber Diamond Corporation, 40 percent owner of the Diavik mine and 52.83 percent owner of Harry Winston, recorded net earnings of $23.9 million for the quarter ended April 30, 2006. Sales from the mining and retail segments for the first quarter were 1 percent and 20 percent higher respectively compared to the comparable quarter of the prior year.

The company recorded sales for the quarter ended April 30, 2006, of $119.3 million compared to $110.1 million for the comparable quarter of the prior year. Rough diamond sales totaled $69.3 million and sales from Harry Winston totaled $50 million.

This compares to sales of $125.9 million in the prior quarter (rough diamond sales of $62.5 million and sales from Harry Winston of $63.4 million) and sales of $110.1 million in the comparable quarter of the prior year (rough diamond sales of $68.5 million and sales from Harry Winston of $41.6 million).

Earnings from operations for the mining and retail segments were $25.8 million and $2.4 million respectively for the first quarter compared to $26.8 million and $0.8 million respectively for the comparable quarter of the prior year.

Net earnings for the quarter ended April 30, 2006 were $23.9 million as compared to net earnings of $13.6 million for the comparable quarter of the prior year. Included in net earnings for the current quarter is a tax recovery of $10.4 million resulting from a 2.5 percent decrease in the Northwest Territories income tax rate.

Harry Winston performed well during a seasonally slow period, growing global sales over the comparable period of the prior year by 20 percent. Comparable store sales were stronger than the prior year in the US and Japan, and were supplemented by sales from new stores in Bal Harbour, Honolulu and Tokyo. A new flagship Harry Winston salon is scheduled to open in London on Old Bond Street in July.

Aber's share of diamonds recovered from the Diavik Mine was approximately 0.7 million carats for the three months ended March 31, 2006, consistent with the comparable quarter in 2005.

Forecasted rough diamond production for the current year remains at 8.5 million carats, despite the early closure of the Winter Road. Aber is expecting to hold three rough diamond sales in the second quarter, followed by two rough diamond sales in the third quarter, and three in the final quarter of the fiscal year. Following the success of the marketing office in India, Aber is looking to expand its rough diamond global sales network by establishing a new branch in Israel.

Commenting on Aber's results, Chairman and CEO Robert Gannicott stated, "Growth in sales and margins at Harry Winston, combined with sustained operational performance at the Diavik Mine and a lowered Northwest Territories tax rate, have contributed strong results to the bottom line. We look forward to expanded rough diamond production as we enter our strongest seasonal operations period while the synergies between our two business segments continue to improve."