Gem Diamonds Sells Ghaghoo Diamond Mine for $4M
Okwa Diamonds will be the new owner of the Botswana mine as Gem Diamonds focuses on its Letšeng mine in Lesotho.
The company recently announced it has entered into a binding share sale agreement with Okwa Diamonds for 100 percent of Gem Diamonds Botswana Proprietary Limited (GDB).
GDB’s primary asset is the Ghaghoo mine, which has been on care and maintenance since March 2017 due to market conditions.
As of Dec. 31, the gross assets of GDB were $3.5 million and the loss attributable to the company for the 12-month period was $3.3 million.
Under the deal, Okwa will pay a total of $4 million in two installments of $2 million each.
The transaction is subject to certain conditions, like relevant regulatory and competition authority approvals in Botswana, but Gem Diamonds said they’re expected to be fulfilled. The deal is slated for completion by the fourth quarter.
Gem Diamonds said it will use the sale proceeds for general corporate purposes.
Botswana-registered Okwa Diamonds is owned by mining and resource development company Vast Resources PLC and Botswana Diamonds PLC, a diamond exploration and project development company. Both are parties in the share sale agreement.
“This sale is in line with our strategic objective to dispose of non-core assets. Gem Diamonds remains focused on optimizing production and efficiency at the Letšeng mine in Lesotho,” said Gem Diamonds CEO Clifford Elphick.
“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.”
Gem Diamonds has tried to sell the Ghaghoo diamond mine a few times, including most recently entering into a purchase agreement with Pro Civil Ltd. in 2019, but the sale did not go through.
Gem Diamonds owns 70 percent of Letšeng, which is known for producing large gem-quality white and fancy color diamonds.
Last August, it uncovered a 442-carat Type II rough diamond at the mine.
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