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Currency

Unless otherwise specified, all dollar references are to United States dollars. On June 9, 2004, one Canadian dollar was worth approximately $0.74 in U.S. currency, based on the noon buying rate in New York City for cable transfers in Canadian dollars, as certified for customs purposes by the Federal Reserve Bank of New York.

Effective August 1, 2003, the US dollar became the functional and reporting currency of Aber Diamond Corporation ("Aber" or the "Company"). Aber's financial reporting is presented in US dollars, with conversion of previously published figures to US dollars. The ongoing impact of this change is that Canadian dollar exposure in self-sustaining subsidiary financial positions is recorded as a cumulative translation adjustment, a component of equity. Previously, gains and losses on US dollar exposure would have been included in the statement of earnings. Currently, Aber's currency exposure is substantially to the Canadian dollar.

Diavik Diamond Mine

The Diavik Joint Venture (the "Joint Venture") is an unincorporated joint venture between Diavik Diamond Mines Inc. (60%) and Aber Diamond Mines Ltd. (40%). Diavik Diamond Mines Inc. ("DDMI") is the operator of the Diavik Diamond Mine (the "Diavik Mine" or "Diavik"), known as the "Diavik Project" prior to commencement of commercial production. Both companies are headquartered in Yellowknife, Canada. DDMI is a wholly owned subsidiary of Rio Tinto plc ("Rio Tinto") of London, England, and Aber Diamond Mines Ltd. is a wholly owned subsidiary of Aber Diamond Corporation of Toronto, Canada.

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Forward Looking Statements

Included in this Annual Information Form are "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995. When used in this Annual Information Form, words such as "estimate", "intend", "expect", "anticipate", "projected" and similar expressions are intended to identify forward-looking statements  which are, by their very nature, not guarantees of Aber's future operational or financial performance, and are subject to risks and uncertainties.

All forward-looking statements are based on Aber's current beliefs as well as assumptions made by and information currently available to the Company and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market forces and commitments. This forward-looking information mainly concerns Aber's plans for its diamond initiatives and is based on the conclusions of management. With respect to Aber's future revenues from its marketing activities, differences may result from developments in world diamond markets, diamond valuations, risks relating to the Company's entry into luxury diamond and jewelry retailing through the acquisition of a 51% interest in Harry Winston Inc. and other factors. With respect to the Diavik Mine (known as the Diavik Project prior to the commencement of commercial production), differences may result from additional drilling, sampling, diamond valuations, engineering and construction timetables and problems, unanticipated problems with mine operations and production, revision to mining plans and other operational decisions taken by Aber's Joint Venture partner, DDMI, fluctuations in energy, labour and other input costs, financial arrangements, local, regional or national political developments in Canada, fluctuations in the Canadian dollar relative to the US dollar, and other factors. With respect to other projects, actual events may differ from current expectations due to exploration results, new exploration opportunities, changing budget priorities of Aber or its Joint Venture partner and other factors.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Information Form. Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this Annual Information Form, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information concerning factors that may cause actual results to materially differ from those in such forward-looking statements is contained in the Company's filings with Canadian and United States securities regulatory authorities.

Item 1:    Corporate Structure

Name and Incorporation

Aber Resources Ltd. was formed on April 19, 1994 under the Company Act (British Columbia) by the amalgamation of a predecessor company (also called Aber Resources Ltd., which had been incorporated on July 8, 1980) with Commonwealth Gold Corporation ("Commonwealth Gold"). On August 3, 2000, the company name, Aber Resources Ltd., was changed to Aber Diamond Corporation. On July 12, 2002, Aber Diamond Corporation was continued under the Canada Business Corporations Act. In this Annual Information Form, unless the context otherwise dictates, a reference to "Aber" or the "Company" refers to Aber Diamond Corporation and, where appropriate, its predecessor corporations and its subsidiaries.

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Intercorporate Relationships As at June 9, 2004 Aber Diamond Corporation's corporate structure was as follows:

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Item 2:    General Development of the Business

Three Year History

Aber repaid a portion of its Project Loan Facility subsequent to the completion of its fiscal 2004 year ending January 31, 2004. The repayment was from cash collateral, cash reserves and from proceeds of amended financing arrangements comprising of a $100.0 million senior secured term facility and a $75.0 million senior secured revolving credit facility, concluded in March 2004. The amended facilities have underlying interest rates that, at the option of the Company, are either LIBOR plus a spread of 1.50% to 2.625%, or US Base Rate plus a spread of 0.50% to 1.625%. The financing arrangements were concluded with certain members of the Project Loan Facility lending syndicate led by the Canadian Imperial Bank of Commerce and The Bank of Nova Scotia. Aber announced on January 29, 2002, the closing of the original $230 million Diavik Project loan facility (the "Loan Facility") to fulfill its Diavik Project funding requirements. The Loan Facility was underwritten on November 2, 2001 by a lead bank group made up of Bank of Montreal, Canadian Imperial Bank of Commerce, Deutsche Bank AG, Export Development Canada and Royal Bank of Canada. The Bank of Tokyo-Mitsubishi joined the lead bank group prior to closing. The Loan Facility was successfully syndicated in January 2002, with the overall banking group totaling 15 lenders.

On February 3, 2004, the Company completed its offering of 1,500,000 common shares at a price of $37.20 (CDN $49.75) per share for gross proceeds to the Company of $55.8 million or CDN $74.6 (net proceeds of $53.6 million, or CDN $71.6 million). The common shares were purchased by a syndicate of underwriters for distribution to the public. The total number of common shares outstanding subsequent to this offering totalled 57,433,232.

During Aber's 2004 fiscal year, the Diavik Mine had achieved the required levels of production and sales, substantial physical project completion, and a sustained level of mining and diamond processing activity to be considered in commercial production. Production continued to ramp up through the year, and Aber had received 1.5 million carats from the Diavik Mine, being its 40% share of total production by year end.

The resulting sales totalled $114.8 million, which included sales of $19.2 million realized prior to the commencement of commercial production and credited against deferred mineral property costs during the first half of the year. Accordingly, revenues for the year, recorded in the income statement, totalled $95.6 million and gave rise to net earnings for the year ended January 31, 2004, of $27.7 million or $0.50 per share ($0.49 per share on a diluted basis), compared to a net loss of $3.9 million or $0.07 per share ($0.07 per share on a diluted basis) in the prior year. Aber's move to profitability was primarily a result of the realization of profits from two quarters of diamond sales subsequent to the commencement of commercial production that occurred at the beginning of the third quarter. In the prior year, the Company's focus was on development of Diavik, with its primary source of income being interest income on cash holdings.

In November 2003, discussions with the owners of Harry Winston Inc. had progressed to the stage where a letter of intent was signed between Aber and the other parties regarding the staged acquisition by Aber of Harry Winston Inc., one of the world's leading luxury jewellery and watch retailers. On April 2, 2004 Aber announced the successful completion of the transaction resulting in the acquisition of a 51% controlling interest in Harry Winston Inc. for $85 million of which $20 million was in the form of additional working capital. Aber paid $40 million on closing of the transaction with the balance to be paid over a one year period following closing.    Founded in 1932, Harry Winston is one of the world's most prestigious diamond jewelers, known as "Jeweller to the Stars", and one of a handful of American luxury goods brands. The Harry Winston brand name is synonymous with the most famous gemstones and jewelry designs in the world, including the Hope Diamond, the Jonker Diamond, the Taylor-Burton Diamond, the Star of Sierra Leone and the Star of Independence. Headquartered on Fifth Avenue in New York, and with 2003 calendar year sales of approximately $130 million, the company maintains six salons in some of the most desirable shopping real estate locations around the world: New York City, Beverly Hills, Paris, Geneva, Tokyo and Osaka. On April 19, 2004 Aber announced the addition of Thomas J. O'Neill as the new CEO of Harry Winston Inc., as well as President of Aber, with Robert Gannicott remaining as CEO of Aber.

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Also in November 2003, Aber announced that DDMI had presented an updated mine plan to the Joint Venture partners. The plan called for increased through-put from 1.5 million tonnes of ore to 1.7 million tonnes resulting in diamond production of 8.2 million carats for calendar 2004. The plan called for peak capacity of 2.0 million tonnes of processed ore to be achieved in calendar 2005. The enhanced production schedule required increased capital expenditures including the purchase of haulage trucks and an expansion of the processed kimberlite containment structure. Associated capital expenditures during calendar 2004 were projected to be C$38 million. The production increase from the A-154 pit advanced the need for the development of the A-418 pit and its water containment dyke, and the development of an underground mine plan capable of bringing the underground resource tonnage in A-154 North kimberlite pipe into reserve status. Outlined in the plan was a total C$140 million of capital expenditure for calendar years 2006 and 2007 for the construction of the A-418 dyke. Additional capital expenditure totaling C$25 million was assigned for calendar years 2005 and 2006 to the development of a production scale underground decline to access the lower levels of the A-154 South and A-418 pipes with the objective of assessing the feasibility of various underground mining methods. In March 2004, Aber announced a revision to the 2004 production forecast. An ongoing programme of delineation drilling of the A-154 South kimberlite pipe identified a shell of low-grade kimberlite mud surrounding the ore body and persisting to approximately the 320 metre bench level in the open pit. On the basis of a processing rate of 1.7 million tonnes for 2004, the projected diamond production, based on the March 2004 revised forecast, is expected to be in the mid to upper range of 7 to 8 million carats.

In July 2003, Aber reported that a sample of 11,771 carats of diamonds were recovered from the low grade upper section of the A-154 North kimberlite pipe and valued by WWW International Diamond Consultants Ltd. at a price of $82 per carat. The overall resource grade of the A-154 North pipe, estimated from the large diameter drilling campaign undertaken during the pre-feasibility work, is 2.4 carats per tonne with a total of 27.5 million carats being contained within 11.5 million tonnes. Aber's Bankable Feasibility Study of May 2000 incorporates only 4.5 million carats of A-154 North into reserves, contained within 1.3 million tonnes of probable ore at a grade of 3.5 carats per tonne. This was calculated on the basis of a price estimate of $33 per carat derived from a parcel of only 157 carats of diamonds. The A-154 North bulk sample valuation result is a component in the ongoing work to assess the feasibility of bringing the underground resource tonnage of A-154 North to reserve status.

During the 2002 calendar year, Diavik completed its construction phase and moved into full scale commissioning of the mine, process plant and all support facilities, ahead of schedule and comfortably within budget.

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The four-kilometre-long dike enclosing the area of the first two orebodies to be mined, A-154 South and A-154 North, was completed in mid summer of calendar 2002. This substantial civil engineering project accounted for almost half of Diavik's capital cost and was the principal project completion risk item. The water behind the dike and overlying the orebodies was removed during the third quarter of the 2002 calendar year, with water discharge quality being controlled by processing in a water treatment facility as required. The pre-stripping of the lake bottom and glacial sediments overlying the open pit mining area was started in the third quarter of calendar 2002 and the first diamond bearing kimberlite was exposed in November 2002.

The access to mineralized kimberlite allowed early pre-commissioning of the processing plant to proceed during late November and December 2002 with the first parcel of 106,320.76 carats of diamonds being reviewed by the Canadian Government Diamond Valuer in late January 2003 at the Project Production Splitting Facility in Yellowknife. Aber's 40% share of these diamonds was sorted in Toronto during February 2003 and sold during March 2003 to Tiffany & Co., with whom Aber has a long-term sales contract, and to the Antwerp market. The average price received was $96.22 per carat, which compares favourably to the $79 per carat predicted by the May 2000 Bankable Feasibility Study. Approximately half of this improvement is attributable to improved diamond quality compared to the Feasibility Study projections, with the other half being due to an under recovery of small, low value diamonds. During the ongoing process plant commissioning, improvements were being made to the small diamond recovery circuit with the objective of delivering 99% of contained value in full production.

Early production from the Diavik Mine was from above the formal ore reserve blocks. The material processed to the end of January 31, 2003 consisted of fine-grained kimberlite ash, mixed with relic lake bottom sediments from the shallow lake that overlay the site of the kimberlite eruption that took place some 53 million years ago. Despite the intervening time period, this material never consolidated into lithified rock. It had the character of loose sand and was not recovered during the core drilling phase of the orebody delineation, and, as such, was outside the initial reserve estimate. During the initial stages of the mine commissioning process, the feed delivered to the process plant continued to be an unpredictable mixture of kimberlite ash and some ore reserve kimberlite mixed with glacial and lake bottom sediments. Although this had the effect of delaying the full-scale production of diamonds at reserve grades, it resulted in recovery of additional diamonds beyond the ore reserve estimates.

During Aber's 2003 fiscal year, the Company completed the purchase of real property (land and building) in Toronto, Ontario for a portion of its operations, for a purchase price of C$23.6 million, including all costs of acquisition. In connection with this, the Company assumed an existing first mortgage in the amount of C$11.1 million.

In December 2000, Diavik Diamond Mines Inc., the operator of the Diavik Mine, completed a detailed construction program for 2001 and 2002, with the objective of advancing commercial production into early 2003. In October 2001, the 3.9 kilometre-long rock berm surrounding the A-154 South and North kimberlite pipes, the principal construction risk of Diavik's development, was completed.

In February 2001, Aber sold its 32.24% interest in the Snap Lake project to the majority interest holder and project operator, De Beers Canada Mining Inc., for $114 million (C$173 million), providing Aber with essential additional equity funds to fulfill its Diavik Project funding requirements.

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Item 3:    Description of the Business

General

With the commencement of operations at Diavik and the constant stream of diamonds to Aber, the Company is positioned as a diamond marketing company supplying a Canadian product to the global diamond market. The Company's primary attention is focused on maximizing the value of its share of diamond production. Exploration and development interests remain with Diavik.

The Company's most significant asset is a 40% interest in the Diavik group of mineral claims. DDMI is the operator of the Diavik Joint Venture and holds the remaining 60% interest.

Commercial production at Diavik, defined by the attainment of certain production and sales performance measures related to the Diavik Mine including physical project completion, a sustained level of mining and diamond processing activity and sales channel readiness was achieved by August 1, 2003. Therefore, the financial statements of the Company for the year ended January 31, 2004 reflect six months of commercial activity relating to Diavik.

The core value of the production from the Diavik Mine is in large, white gems. High (white) colours are characteristic throughout the production in all qualities, including the cheaper ranges of diamonds. Every diamond mine, to some extent, produces a broad range of diamond qualities. Although larger, white diamonds form the core of the value of the production from Diavik, on a volume basis, white diamonds in lower qualities predominate. A substantial volume of brown diamonds in all sizes is also present.

Sales and Marketing

March 2004 marked the anniversary of Aber's first year of rough diamond sales. The Company sells its diamonds by means of two sales channels: (i) directly to Tiffany & Co. ("Tiffany"), and (ii) to the Antwerp open market, through a wholly owned subsidiary, Aber International N.V. (previously known as Aber Overseas N.V.). The Company formed a strategic alliance with Tiffany, a world leader in retail sales of high quality diamond jewelry, in July 1999. The Aber-Tiffany agreement involved a C$104 million private placement of Aber equity and a 10-year diamond purchase agreement providing for a minimum purchase by Tiffany of $50.0 million per year, commencing at the beginning of commercial production from the Diavik Project. As of June 9, 2004 Tiffany owned 8,000,000 common shares of Aber, representing approximately 13.9% of the issued and outstanding common shares of Aber. Sales to Tiffany represented approximately 11% of diamond sales for Aber in the last fiscal year.

In January 2002, Overseas Diamonds N.V., a leading Antwerp diamantaire and diamond manufacturer, and Aber formed Aber Overseas N.V., formerly known as CanaDiam N.V., to market a portion of Aber's share of the diamond production from the Diavik Mine. Aber Overseas N.V. was owned 51% by Aber and 49% by Overseas Diamonds. During the quarter ended April 30, 2003, Aber concluded an arrangement whereby Aber Overseas N.V. was restructured such that it became a 100% owned subsidiary of the Company. Coincident with the acquisition of the remaining 49%, Aber Overseas N.V. was renamed Aber International N.V. ("Aber International"). Aber International is currently positioned to act as a rough diamond dealer, supplying a wide range of product priced and assorted with flexibility, reflecting current market conditions to a clientele located in the major diamond centres of Belgium, India, and Israel.

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Aber International has developed a base of approximately 30 clients derived from all the world's major cutting centres, and as the Company's chosen customers they all share Aber's vision of a dynamic and growing market for diamonds. Their skills not only include excellence in the craft of cutting and polishing diamonds but also a proven expertise in marketing and distributing polished diamonds.

The majority of Aber's clients are based in India and Israel and are diamond manufacturers rather than dealers. Many have significant jewelry manufacturing interests. Aber's clients are attracted to the high (white) colour range that has become the market signature of the Diavik Mine production. These high colour diamonds are not only suited to the traditional taste of the US diamond jewelry market, the world's largest, but are also attractive to the domestic Indian jewelry market which continued to grow at rapid pace during calendar 2003.

Competitive Conditions  The Diamond Market

The Rough Market

Sales of Diavik Mine production entered the rough diamond market in calendar 2003, a year which was very much influenced by the Supplier of Choice ("SOC") strategy of De Beers' Diamond Trading Company ("DTC"). This strategy aims to stimulate demand through increased marketing by companies in the downstream portions of the diamond industry. To accomplish this end, De Beers have channeled rough diamonds towards a smaller list of clients whom De Beers believes have demonstrated market making abilities. At the end of the year, the DTC client list was reduced from 105 clients to 84. By the same time, De Beers had completed their process, begun in 2000, of selling down their rough diamond stockpile to working inventory levels. With BHP-Billiton and Rio Tinto continuing their strategy of selling the bulk of their production to a restricted client base there has been a reduction in the availability of rough diamonds in the market. Therefore, rough diamond demand in calendar 2003 remained resilient despite a polished market that languished due to economic uncertainties and ongoing military conflicts. This attractive rough diamond demand climate, as well as the technical characteristics of the Diavik Mine production, has allowed both Aber and Rio Tinto to assume unlimited market demand in sales projections for Diavik Mine product, under a range of reasonable production scenarios.

The Polished Market

The polished market in calendar 2003 saw growth in volume and, ultimately, a corresponding growth in pricing. During 2001/2002, the additional rough diamond produced by De Beers' destocking process was taken up into an expanded manufacturing base on lengthened credit terms. By 2003, the resulting polished had found its way through the diamond pipeline. Accordingly, by early 2004 the now expanded market was experiencing a shortfall in polished supply, with resultant increased prices, especially in the larger whiter goods.

This supply shortfall came at the same time as renewed economic growth in the key polished diamond markets, such as the US, and at a time when De Beers' demand-side oriented SOC strategy began to have impact. These factors resulted in a 7% growth in global retail sales of diamond jewelry, helped in a significant way by a 22% spurt in India. US sales figures showed a healthy 6.5% growth. The SOC strategy has led the market to become increasingly focused on strong product ideas and effective marketing.

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The calendar year 2003 also saw the emergence of the domestic Indian and Chinese retail markets as unique growth opportunities for the future. The developing culture in China for diamond wedding bands supports continued optimism for the future growth of women's diamond jewelry in this expanding market.

Throughout the world, greater investment by the trade in marketing and branding is driving demand for diamond jewelry and helping diamonds to gain a larger share of the luxury goods sector. This is a development recognized and fostered by De Beers as they enter the downstream retail sector themselves through the De Beers L.V. joint venture with partner LVMH Moet Hennessy Louis Vuitton. It is a development also recognized by Aber, and is a key rationale for Aber's entry into the retail sector through the staged acquisition of Harry Winston.

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