Canada's Newest Luxury: Diamonds, The Ultimate Luxury Product

The Luxury Marketing Council - Upcoming Evening Event
The Canadian Luxury Series – Part Two

Canada's Newest Luxury: Diamonds, the Ultimate Luxury Product

Panelists
• Eira Thomas, Chief Executive Officer, Stornoway Diamond Corp., Vancouver
• James K. Gowans, President & Chief Executive Officer, DeBeers Canada Inc., Toronto
• James N. Fernandez, Executive Vice President & Chief Financial Officer, Tiffany & Company, New York

Generously hosted in recognition of diamond exploration in Saskatchewan and with special thanks to Emily Rafferty, President & Nina Diefenbach, Vice President for Development and Membership, The Metropolitan Museum of Art

The Luxury Marketing Council, in collaboration with the Consulate General of Canada in New York, is delighted to present the second in a series on Canadian luxury.

Diamond sales continue to climb worldwide. With the world’s most populous countries fueling the trend, our panel of industry experts will share with you personal insights about the marketing of this ultimate luxury product, the latest trends they perceive in the market, and what they’ve learned about the luxury customer in the process.

SOME OF THE MARKETING ISSUES WE'LL BE EXPLORING WITH OUR PANEL OF GLOBAL EXPERTS:

-How is the global market changing both from standpoint of supply and consumer interest in diamonds? Is there a glut or shortage?

-Have diamonds become a commodity? Do certain places produce more valuable/ marketable diamonds?

-Who, on the retail side, is doing the most interesting things to promote diamonds and use diamonds in fashion and jewelry? What are the latest aesthetic trends? Does what is found in the ground influence this and if so, how?

-What is the impact of the recent fascination with colored diamonds and the increasing use of other precious gems in fine jewelry? Is this a threat or not?

-How is the connection between supply and retail changing and what are the implications for marketers and retailers?

-How hot are diamonds? What are their latest uses in retail and fashion?

-The impact of consolidation (mining acquiring retail, etc.) and the trends in this area

-Manufacture and craft - is the quality still there? As family-run, design-and-designer-driven, luxury businesses succumb to luxury consortia driven by quarter-to-quarter profits and, some say, by 'the impact of hype' over the 'impact of the hand' – ultimately speeding the demise of traditional craftsmanship and quality.

CANADIAN DIAMONDS – A GLOBAL FORCE

In the 1990s, Canadian geologists shattered the silence of the cloistered world of diamantaires with news of major discoveries of gem-quality diamonds in vast arctic wilderness of the Northwest Territories (NWT). One of them was then 24 year old Eira Thomas, "the only woman in the world who wears diamonds from a mine she discovered” - that being the Diavik mine. Featured in the premier issue of Condé Nast's Portfolio and in Forbes magazine the prior month, Eira Thomas has emerged as one of the most highly-regarded experts on diamonds from the geological/supply perspective, and is in great demand as a speaker at industry conferences.

With three mines in operation, Canada was already one the top sources of rough diamonds in the world in value terms. In October 2007, Canada's fourth diamond mine, the Snap Lake mine in the NWT, commenced production as Canada's first completely underground diamond mine. Owned and operated by DeBeers Canada Inc., which anticipates the start-up of their Victor Mine in Ontario in 2008, it is certainly not the last that will come on-stream during the tenure of president and CEO Jim Gowans. While luxury marketers may ponder whether DeBeers has conjured -- or merely democratized – a worldwide demand for diamonds, no discussion on diamonds would be complete without their perspective.

Diamond discoveries in Canada not only brought new players to the table, but also swept away the old rules of the game in the process. Canada's Aber Diamond Corporation put revenues from its share of the rough diamonds from the Diavik mine to purchase Fifth Avenue jeweler Harry Winston, a brand name that is synonymous with diamonds. Guided by Jim Fernandez, Tiffany & Company has netted hundreds of millions in profits from strategic investments in Canada's nascent diamond industry and has more recently forged an unprecedented agreement for Tiffany & Company to market or purchase the entire output of the Jericho mine in Canada's Nunavut Territory. From its trademark blue boxes to its blue chip clientele, Tiffany & Company has built a reputation on trust and quality that has taken them from the domestic to international luxury markets, a reputation they carry with them to other links in the distribution chain.

We do hope you can join us on November 8th. Our panel discussion will be preceded by a reception in the Patrons Lounge featuring a selection of beverages and hors d'oeuvres.

The Canadian Luxury Series: In the coming months this series will continue to spotlight some of the stars of Canadian Luxury, such as Canada's men's clothing industry, as best exemplified by Canadian makers’ dominant position in North American men's suits. The series will conclude with an exploration of Canada itself, a vast and varied destination for luxury, adventure, corporate, and incentive travel.

About Our Panelists

Eira Thomas

Ms. Thomas, 38, is a respected Canadian geologist who brings extensive experience to her role as CEO of Stornoway. She served as a geologist with Aber Resources Ltd. (now Harry Winston Diamond Corp) from 1992 to 1997, leading the field exploration team that discovered the Diavik Diamond Project pipes in the Northwest Territories in 1994 and 1995. She was promoted to Vice-President Exploration for Aber in 1997, a post she held for two years, and served on the Board of Directors from 1998 to 2006. Diavik was Canada’s second diamond mine when it went into production in 2003. Last year it produced 9.8 million carats.

A recipient of Canada’s prestigious “Top 40 Under 40” award for the year 2004, Ms. Thomas, in addition to Stornoway, is also a director of a number of other public companies and organizations, including Suncor Energy, Strongbow Exploration Inc., Fortress Minerals Corp., the Northwest Territories Chamber of Mines and the Prospectors and Developers Association of Canada. Previously, Ms. Thomas held the positions of President of Navigator Exploration Corporation and CEO and Director of Stornoway Ventures Limited.

Stornoway Diamond Corporation was formed in July 2003 through a merger between Stornoway Ventures and Northern Empire Minerals, creating the strongest Canadian owned diamond exploration company. The Company recently merged with Contact Diamond and Ashton Mining of Canada and presently has interests in over 13 million acres of prospective diamond properties situated in northern Canada and Botswana. The team has been involved in over 150 new kimberlite discoveries and six new diamond districts in Canada; including the Renard Project, currently conducting a 10,000 tonne bulk sample.

Ms. Thomas’s father, D. Grenville Thomas, a mining Engineer, Chairman of Strongbow Exploration Inc., co-founder and a former director of Aber Diamond Corporation, moved to Canada from Wales and introduced her to exploration for minerals at the age of eight. During the summer holidays, Eira and her sister would accompany their father on exploration camps at Thor Lake, 50 kilometres southeast of Yellowknife.

Ms. Thomas graduated from the University of Toronto with a Bachelor of Science in Geology in 1990.

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James K. Gowans

Jim joined the DeBeers family of Companies in March 2006. While Jim recently joined the De Beers Canada senior leadership team, he is no stranger to mining and mining operations.
Prior to joining the company, he was Senior Vice President and Chief Operating Officer with PT Inco Indonesia, overseeing the Operations of this company on the island of Sulawesi, Indonesia, and the implementation of an aggressive growth strategy. He brings over thirty years of practical management experience, touching on most aspects of the mining industry, including exploration, major projects, operations and human resources.

Jim earned his Bachelor of Applied Science in Mineral Engineering (Mining and Mineral Processing) from the University of British Columbia in 1974. From there, he joined Cominco (now Teck Cominco) and advanced through various technical and managerial positions, including being the youngest Superintendent in the company’s history – as Mill Superintendent at Con Operations in Yellowknife, through to Operations Manager, Potash Operations in Vanscoy, Saskatchewan. He was also the Project Engineer for the Polaris Mine Project in Canada’s High Arctic and Manager, Engineering for the Red Dog Project in Alaska.

Looking for new challenges, he then moved on to Placer Dome in 1993 where he was involved in global strategic planning. He was made Vice President, Design and Research, responsible for projects design and the Research Centre where he spearheaded the drive to certify their research lab to the ISO 9002 standard. After a stint as Vice President, Human Resources, overseeing talent management globally, Jim was promoted to Executive Vice President, Canada, taking on their complete portfolio of Canadian Operations until late 2001.

Jim looks forward to leading DeBeers Canada through the transition to full production and the exploration of new kimberlite deposits in Canada

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James N. Fernandez

James N. Fernandez is Executive Vice President and Chief Financial Officer of Tiffany & Co., the internationally renowned jeweler. In this role, he has overall responsibility for all financial functions as well as Investor Relations, Information Technology, Distribution, Manufacturing, and Tiffany’s Diamond and Gemstone Division.

Mr. Fernandez joined Tiffany in 1983 as Manager of Accounting and assumed responsibility for Financial Planning in 1986. He became Vice President of Planning in 1988, and was promoted to the position of Senior Vice President of Finance and Chief Financial Officer in 1989. Mr. Fernandez was promoted to Executive Vice President and Chief Financial Officer in January of 1998, at which time distribution was added to his overall responsibilities.

Prior to joining Tiffany & Co., Mr. Fernandez held several positions at Avon Products, Inc. including Manager of Corporate Internal Auditing, responsible for Avon's domestic audit groups.

Mr. Fernandez graduated from Pace University in 1978, where he received a B.B.A. in accounting. He received a M.B.A. in corporate finance from Fordham University in 1982. He is a C.P.A. and is a member of the American Institute of Certified Public Accountants, Financial Executives International and the Institute of Management Accountants. Mr. Fernandez has served on the Board of Directors of The Dunn & Bradstreet Corporation since 2004. He also serves on the Advisory Boards of JP Morgan Chase, FM Global and Fordham University’s business schools.

About Diamond Exploration in Saskatchewan

Saskatchewan is today thought to have the largest potential for diamond mining of any place in the world according to the non-profit Saskatchewan Eco Network. Most of the exploration is focused on the Fort à la Corne area, about 50 miles east of the city of Prince Albert in the center of the province.

According to trade publisher Rapaport Diamond Report, "The [Fort à la Corne] claim covers 63 of the over 71 kimberlites found in the area, which together form one of the largest diamondiferous kimberlite clusters in the world. The kimberlites appear to be large and tend to have broad champagne glass forms lying under 100 meters of glacial cover." First discovered in 1989, these very large kimberlite fields, some with huge surface areas of over 600 acres, are comparable to the largest kimberlite pipes found in Africa.

The Fort à la Corne kimberlites have distinct advantages over those being mined in more remote regions of Canada by virtue of being situated nearer to existing infrastructure, supplies, services and utilities including electrical power, phones and natural gas. Saskatchewan's kimberlite fields may represent the next major sources of long-term supply of rough diamonds in Canada, with mines that will produce for decades.