Bermuda-based and Perth-listed diamond exploration company Petra Diamonds Ltd will acquire mining assets from De Beers Consolidated Mines Ltd used in the Koffiefontein mine in a deal worth $14.9 million.
Bermuda-based and Perth-listed diamond exploration company Petra Diamonds Ltd will acquire mining assets from De Beers Consolidated Mines Ltd used in the Koffiefontein mine in a deal worth $14.9 million.
The full text of a company announcement is pasted below
Petra Diamonds Ltd, the AIM-quoted and ASX-listed diamond group, announces that it and its wholly owned subsidiary, Blue Diamond Mines Pty Ltd, have entered into a conditional agreement with De Beers Consolidated Mines Ltd to acquire the mining and associated capital assets previously used by De Beers in the operation of the Koffiefontein diamond mine situated in the Free State province of South Africa.
BDM has also applied to the South African Department of Minerals and Energy for a mining right in respect of Koffiefontein; De Beers ceased mining at Koffiefontein when its old order mining right expired in February 2006. In accordance with South African mining legislation, BDM is not permitted to commence mining until the new mining right is issued; Petra expects this to be issued shortly and BDM will then use the assets acquired from De Beers to operate Koffiefontein.
The consideration for the Assets is R81.9 million (£5.98 million, A$14.93 million); this consideration is to be settled by BDM assuming De Beers` rehabilitation obligations at Koffiefontein, which amount to R80 million (£5.84 million), plus the payment in cash by BDM to De Beers of R1.9 million (£138,700). There is no further consideration with regards to the Assets.
Completion of the Agreement is conditional upon the following key conditions:
When the conditions above have all been met, which is expected to be in early 2007, Petra will commence production from Koffiefontein. BDM has been, with permission from the DME, conducting care and maintenance activities for the last few months in order to maintain the condition of the cave to ensure the efficient commencement of mining activities on receipt of the mining right.
Given the nature of the proposed transaction, the Company has provided such disclosure, as it is able, in accordance with Schedule 4 of the AIM Rules as a Substantial Transaction. A further announcement will follow in due course which will include a resource statement for the Koffiefontein mine, currently under licence review, as described above.
An exchange rate of R1:£0.073 has been used for the purposes of this announcement.
