Crown Diamonds has announced the $US12 million acquisition of the Helam Diamond mine near Johannesburg in South Africa.
The acquisition, which will be put to a shareholder vote in Perth on August 9, will propel the Subiaco-based company to the status of top tier diamond producer.
Helam is the third diamond mine acquisition for Crown.
Crown will be entitled to all production and revenue streams from Helam, effective from July 1 this year. The acquisition is expected to boost Crown’s annual production from 54,000 this year to 170,000 carats in 2005.
The acquisition of the Helam mine will be funded through the issue of 3.7 million shares in Crown at an issue price of $A0.18 cents per Crown share, a cash payment of $US4.5 million by December 31 2004 with the balance of $US3.2 million payable over a three-year period for a share in profits in the Helam Mine.
At least half of the newly issued shares will be held in escrow for at least 18 months.