TORONTO (miningweekly.com) – Harry Winston Diamond Corp, which owns 40% of Canada’s Diavik mine, said on Thursday the operation produced 1.9-million carats in the third quarter – an 8% increase from the same period last year, owing to increased volumes and higher grades.

The Toronto-based company said it held two partial rough sales in the three months up to October 31, reiterating that it was holding back on major sales because of market volatility and buyers looking for discounts.

The full-year production target for Diavik, of which Rio Tinto owns the other 60%, remains 6.9-million carats, as Harry Winston expects output to dip slightly to 1.8-million carats in the final quarter of 2011.

The mine, which is transitioning from open pit to underground operations, processed 3% more ore during the three months to September 30.

Harry Winston said earlier this week that consumer demand for its diamond jewellery remained strong, in spite of wobbly market conditions and fears the world will slip into another recession.

The TSX- and NYSE-quoted firm said it had $112-million of rough diamond inventory, using June prices, and it was not in a hurry to offload this, with $75-million remaining in its mining debt facility.

Accordingly, Harry Winston was deferring significant rough diamond sales into the fourth quarter, and “possibly subsequent periods”.

Shares in the company were flat at C $12.27 in early Toronto trading.