Botswana Diamonds PLC, an exploration company listed on Botswana Stock Exchange (BSE) and London Stock Exchange Alternative Investment Market (AIM) has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana.
Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines. In a statement released by Botswana Diamonds on Monday the acquisition is coupled with two adjacent Prospecting Licences and a diamond processing plant.
Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe. Further more Sekaka holds a recently constructed, fit-for-purpose bulk sampling plant on site. The sampling plant includes crushing, scrubbing, dense media separation circuits and x-ray recovery modules within a secured area.
The acquisition by BOD includes an extensive database, built up over 15 years of exploration. This deal according to information published by BOD comprises a cash payment of US$300,000 and a 5% royalty on future revenues. The cash consideration is payable on a deferred basis with US$150,000 payable on 31 August 2021 and the balance on or before 31 August 2022.
Statement from Botswana Diamonds states reveals the company intends to fund the cash consideration through an issue of new ordinary shares at such time. In addition, Petra is entitled to a 5% 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. However BOD has the option to buy-out the royalty for a cash payment of US$2 million.
This watershed transaction earmarked to resource the take off of Botswana ‘s next diamonds story is however subject to customary regulatory approvals which include approval by the Botswana Minister of Mineral Resources, Green Technology and Energy Security under Section 23 of the Mines and Minerals Act as well as approval from Botswana’s Competition Authority approval in Botswana.
The transaction is also subject to approval by Petra’s lenders and note holders. The long-stop date for fulfillment of the Conditions Precedent is 31 August 2020, which may be extended by mutual agreement of the two parties. The KX36 discovery is a 3.5Ha Kimberlite pipe, discovered by Sekaka, in the Kalahari. The Kimberlite is situated approximately 70 km from Gem Diamonds’ Ghaghoo Mine, and 260 km north-west of Botswana’s capital Gaborone.
Ghaghoo Mine was recently acquired from Gem Diamonds by a Batswana owned firm Pro Civils. Sekaka has undertaken extensive exploration work on KX36, including extensive core and Large Diameter Drilling .There is a historic SAMREC compliant Indicated Resource of 17.9 million tonnes at 35 cpht, and an Inferred Resource of 6.7 million tonnes at 36 cpht, estimated for the pipe by Z-Star in 2016.
As Sekaka owns 100% of KX36, gross and net resources are the same. Sekaka is the operator of KX36. BOD has not independently verified the historic resource estimate. Modelling these grade estimates suggests overall grades of between 57 cpht and 76 cpht. The estimated diamond value from the LDD is $65/ct, with an upside range of between $97/ct and $107/ct, all assuming a +1.15mm Bottom Cut-Off or +3 DTC diamond sieve.
BOD says it plans to conduct a new exploration programme focused on the KX36 pipe and intends to spend approximately US$100,000 per annum in each of the next three years. Commenting on the acquisition, James Campbell, Managing Director of Botswana Diamond PLC said KX36 is the most significant diamond discovery in Botswana since Orapa and Jwaneng.
He noted that KX36, together with its associated Prospecting Licenses, adds 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.
John Teeling, BOD Chairman also added “This is an important step forward for BOD. KX36 is a very significant diamond discovery and potentially offers upside potential – as do the two contiguous prospecting licences. You rarely, if ever, find a kimberlite pipe on its own and further exploration may find more kimberlite pipes.”
“KX36, located deep in the Kalahari, presents challenges, but the greatest challenge of all is overcome – finding a significantly sized high-grade deposit. We have evaluated options on KX36 and believe we can add value to the discovery,” he said.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.