Petra Diamonds sells 100 percent stake in Sekaka Diamonds to Botswana Diamonds
The proceeds of the $300,000 sales will go towards repaying Petra Diamonds' $650 million debt.
London-listed Petra Diamonds is selling its exploration assets in Botswana for $300,000 and a 5 percent royalty on future revenues should any of the prospects within the exploration licences be brought into production.
The company said in a statement that it had entered into an agreement to dispose of its exploration assets in Botswana via the sale of 100 percent of its holding in Sekaka Diamonds Exploration to Botswana Diamonds.
The proceeds of the sale will go towards repaying its $650 million debt.
Petra Diamonds CEO Richard Duffy said that the sale was in line with the company’s strategy. “This disposal forms part of our strategy to focus on diving efficiencies from our high quality producing mines, but allows us to maintain upside to potential future commercial production from the Botswana assets, particularly from the KX36 deposit.”
Also commenting on the transaction, Botswana Diamonds MD James Campbell said that KX36, together with its associated prospecting licences, added scale to the company’s Sunland and Maibwe JV properties in the Kalahari.
“Botswana Diamonds will refine resource estimates of KX36, and development options. The Sekaka exploration database adds to Botswana Diamonds’ extensive database, improving our diamond exploration programme, particularly in the Kalahari, where we are currently focused,” he said, adding that Botswana Diamonds planned to conduct a new exploration programme focused on the KX36 pipe and intended to spend around $100000 a year in each of the next three years.
The financial terms of the transaction comprise a deferred cash payment of $300,000, of which $150,000 is payable on or before the end of August next year. The company said the balance in cash would be payable on or before 31 August 2022.
James said Botswana Diamonds intended to fund the cash consideration through an issue of new ordinary shares at such time. “In addition, Petra is entitled to a 5 percent royalty on the sale of diamonds that are commercially produced from KX36. The royalty is also payable on diamonds from any kimberlite discovered from Sekaka’s data. Botswana Diamonds has the option to buy-out the royalty for a cash payment of $2m.”
He said the transaction was subject to customary regulatory approvals - which would include the Botswana Ministry of Mineral Resources and the local competition authority – as well as Petra lenders and noteholders.