Gem Diamonds Selling Ghagoo Mine and Operations for $4 Million
August 23, 21
(IDEX Online) - Gem Diamonds Limited is selling Gem Diamonds Botswana Proprietary Limited (GDB) to Okwa Diamonds (Pty) Ltd. GDB's main asset is the Ghaghoo diamond mine in Botswana.
The mine has been on care and maintenance since March 2017, and is wholly owned by GDB. As of 31 December 2020, the gross assets of GDB were US$3.5 million and the loss attributable to GDB for the 12-month period ended 31 December 2020 was US$3.3 million. The Purchaser will take over all assets and assume all liabilities of GDB.
Okwa is owned by Vast Resources PLC, a mining and resource development company listed on London's AIM, and by Botswana Diamonds PLC, a diamond exploration and project development company listed on AIM and the Botswana Stock Exchange.
Vast Resources PLC and Botswana Diamonds PLC are both parties to the share sale agreement and guarantee the obligations of Okwa Diamonds.
The completion of the transaction is subject to certain Suspensive Conditions including relevant regulatory and competition authority approvals within Botswana. It is expected that these will be fulfilled, and the transaction completed in Q4 2021, Gem Diamonds said in a statement.
Under the share sale agreement, the purchaser will pay US$4 million, payable in two instalments of US$2 million each, the first of which is payable 5 (five) days after the date on which the last Suspensive Condition has been fulfilled or waived. The second payment is payable on or before 23 December 2021, provided the first payment has been made prior thereto. In the event the last Suspensive Condition is fulfilled or waived after 23 December 2021 the full amount of US$4 million will be payable 5 (five) days after such fulfilment or waiver. Gem Diamonds will use the sale proceeds for general corporate purposes.
Clifford Elphick, Chief Executive Officer of Gem Diamonds, commented: "This sale is in line with our strategic objective to dispose of non-core assets. Gem Diamonds remains focused on optimising production and efficiency at the Letšeng mine in Lesotho. On behalf of Gem, we wish the Okwa Diamonds team well for the future, and I would also like to thank the government of Botswana for its assistance during the sale process."