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Friday, 19 April 2024

Lesedi La Rona in line for a sale

Business

Lucara Diamond Corp hopes to sell their most prized gem early next year. The Canadian company says this time around they will not go for an auction, opting instead for single bid offer.  


Lesedi La Rona, the second largest diamond ever recovered failed to find a buyer after bidders at the Sotheby’s auction in London failed to beat the minimum price. The bid for the magnificent 1109 carat diamond started at $50 million and ended up at $61 million, which was below the reserved price. Lesedi La Rona was expected to fetch at least $70 million while some analysts had even touted a much higher value over $100 million.


The stone was expected to set yet another record as the most expensive rough diamond ever sold following Lucara’s sale of an 813-carat rough diamond (named the Constellation), the world’s sixth largest, for $63 million in May. The Constellation was extracted alongside another 374 carat gem, a day after the discovery of Lesedi La Rona.


In an interview with Rapaport, the leading print publication for the diamond industry, William Lamb, Lucara's president and CEO stressed that the Lesedi La Rona will not be placed on auction again. The stone is currently undergoing analysis to determine the most valuable way it can be polished. Lucara expects the analysis will be completed midway through the first quarter before it initiates another sales process.


“We have not yet determined the best mechanism for the sales event. It will not be an auction,” Lamb said before adding that the most likely format will be a single bid offer, which may or may not be sealed. Still on the interview, Rapaport reports that Lamb said there was strong interest in the stone and they hope to have disposed of it within six months.


“We have had a significant number of people continue to show interest in the stone,” Lamb reported. Only those diamantaires who have directly requested it will be given the data ahead of an “exclusive sales event.” 

“We do not have a time for when this will occur but the hope is that we will be able to finalize its sale within the first half of 2017,” Lamb said.


Lucara Diamond Cop laid claim to the world second largest diamond to be ever mined in November last year when it unearthed a 1,111carat gem quality, Type IIa diamond. The white Type IIa diamond is considered the purest form of diamond.  The magnificent stone, which originated from the south lobe of Lucara’s Karowe Mine, is the world’s second largest gem quality diamond ever recovered and the largest ever to be recovered through a modern processing facility. The stone was recovered by the newly installed Large Diamond Recovery (“LDR”) XRT machines. The stone measures 65mm x 56mm x 40mmin size and is the largest ever to be recovered in Botswana.


The unearthing of this exceptional gem diamond came more than a century later since the discovery of the world largest diamond; the 3,106-carat Cullinan, found near Pretoria in South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.


Karowe mine has been a rare source of exceptional diamonds with its consistent recovery of large high value diamonds. Although it produces less than 1% of world’s diamonds, the mine is recovering more than 50% of the world’s diamonds larger than 100 carats. In January 2013, it sold a 9.46 carat blue diamond recovered from Karowe mine for $4.515 million. This was later followed by the mining of a 239 carat diamond, which at the time was the largest diamond ever to have been recovered from the highly prolific Orapa kimberlite in over 40 years of production.

This set in motion more discoveries of valuable diamonds, a 257 carat gem stone was unearthed in September 2013 and in May 2014, Lucara had mined 13 diamonds greater than 100 carats, two of which were greater than 200 carats. In the first half of 2015, Lucara’s prized jewel was the 342 gem quality diamond mined from the central and south lobe of Karowe. The diamond was auctioned for $20.55 million.


As the year comes to an end, the Canadian mining company has released operating guidance for 2017 accompanied by strong projections for the last quarter of the year. Lucara Diamond Corp’s revenue for fourth quarter 2016, including the second exceptional stone tender held in November this year, is $6.6 million at an average of $743 per carat. Total revenue for the year end, including the constellation diamond sale, is estimated to be $295 million at an average of $823 per carat.  Revenue excluding the sale of the constellation diamond is estimated at $232 million at an average of $649 per carat.


Lucara Diamond Corp sold 14 exceptional stones at over $2 million per stone, including four stones at over $10 million per stone. In addition, Lucara Diamond Corp sold 20 exceptional stones between $1 to $2 million per stone. The company’s Karowe mine, to date, has yielded 1.8 million carats generating revenue of $1.02 billion at an average price of $566 per carat. The mine also surpassed the 5 million Lost Time Injury Free mark in November.


Lamb commented:  "Achieving sales of $1 billion is a significant milestone for Lucara Diamond Corp and is arecognition of our strong client base and the quality of diamonds recovered from the Karowe mine. “Such a milestone could only have been achieved with the dedication of our employees, who have demonstrated a great commitment to working safely on site as exemplified by the Karowe mine surpassing 5,000,000 Lost Time Injury Free hours. We are pleased that our final sale of the year has shown strong demand for our larger higher quality diamonds and also a sustainable demand for the smaller size diamonds.


“We look forward to continued success in 2017 with the advancement of our exploration and deep drilling programs and the completion of our capital programs to enhance diamond recovery from the high value south lobe."

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Business

LLR transforms from Company to Group reporting

9th April 2024

Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.

The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.

At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.

The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.

“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.

The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.

 

In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.

“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.

Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.

 

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Business

Botswana’s Electricity Generation Dips 26.4%

9th April 2024

The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.

Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.

Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.

Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.

Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.

The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.

The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.

In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.

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Business

MMG acquires Khoemacau in a transaction valued at P23Bn

9th April 2024

MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.

On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.

Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.

In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).

On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.

MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.

On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.

 

The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.

On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.

The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.

Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.

Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.

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