The liquidated Ghaghoo Diamond inthe Central Kalahari Game Reserve (CKGR) is about to come back to commercial glory, the mine which is currently under care and maintenance has new owners.
Botswana Diamonds plc (BOD) announced today that Okwa Diamonds Pty Ltd, its joint venture with Vast Resources plc (VAST) has conditionally agreed to acquire Gem Diamonds Botswana Pty Ltd (GDB), a wholly owned subsidiary of Gem Diamonds Ltd (Gem Diamonds), for a cash consideration of US$4 million(over P45 million).
GDB’s primary asset is the fully permitted Ghaghoo diamond mine in central Botswana which is currently under care and maintenance.
BOD has an initial free carried interest of 10% in Okwa Diamonds Pty Ltd (Okwa) for the first US$15 million of expenditure by Okwa, which is being funded by VAST (including the acquisition cash consideration).
Thereafter, BOD will not be diluted below 2.5% of Okwa. BOD can also earn up to a further 20% interest in Okwa through funding 20% of expenditure.
Under the terms of the joint venture with VAST, BOD will be the operator of the Ghaghoo mine until such time as an agreed management team is in place.
The acquisition of GDB is conditional, inter alia, on relevant regulatory and competition authority approvals in Botswana and is expected to complete during the latter part of 2021.
Ghaghoo is a 10.8 Ha kimberlite pipe in central Botswana, 300km north-west of Gaborone which is currently on care and maintenance.
The kimberlite pipe has a reported SAMREC compliant Indicated Resource of 79.3 million tonnes at an average grade of 19.5 cpht and diamond value of $242/ct (2014 data).
Diamond assortment includes high-value fancy-coloured diamonds, such as orange and blue stones.
Conditional acquisition by joint venture, Okwa, of a fully permitted diamond mine including mine infrastructure, fit-for-purpose processing plant and camp, for US$4m( P45 million) to be funded by VAST.
Ghaghoo is currently under care and maintenance the intention is to return the mine back into being a commercially successful diamond-producing asset.
Botswana Diamonds has an initial 10% carried interest in Okwa and has been appointed as the operator.
James Campbell, Managing Director, commented: “Working with our joint venture partner VAST, we have completed thorough due diligence on Ghaghoo. We believe there are significant opportunities to improve Ghaghoo’s operating and financial performance through both the application of new and optimisation of existing technologies along with a strongly recovering diamond market. Gem Diamonds’ advanced underground mine development and the surface infrastructure already in place, means a return to production is potentially possible with an overall objective to target a return to name plate capacity of 1.25 million tonnes yearly.”
John Teeling, Chairman, commented: “Our joint venture enables us to acquire an interest in an advanced mining project at minimal initial cost. Ghaghoo is one of the largest available diamond resources, and is contiguous with our KX36 project which should potentially create synergies between operations. Ghaghoo and KX36 are both located in the Central Kalahari, which is our core area of focus in Botswana. VAST are funding the acquisition cost and initial development capital, and our initial 10% free carry. BOD is the operator for the project and has marketing rights equivalent to our shareholding in Okwa. This is a very good development for BOD.”