Petra plans to apply the proceeds of the sale to general working capital purposes
Petra Diamonds Limited announces that it has entered into an agreement to dispose of its exploration assets in Botswana via the sale of 100% of its holding in Sekaka Diamonds Exploration (Pty) Limited (previously known as Petra Diamonds Botswana (Pty) Limited) (“Sekaka Diamonds”) to Botswana Diamonds PLC (“Botswana Diamonds”) for a total consideration of US$300,000 and a 5% royalty on future diamond revenues should any of the prospects within the exploration licences be brought into production.
The assets of Sekaka Diamonds include the Company’s three existing Prospecting Licenses in Botswana, which includes the KX36 project, a 3.5 hectare kimberlite that was a new discovery by Petra in 2010, as well as a bulk sampling plant. These assets have been classified as ‘Assets held for sale’ since 30 June 2018 following a decision by the Board to dispose of its Botswana exploration assets; the transaction is not a result of the recent sales process announced on 26 June 2020.
The purchase price of US$300,000 will be payable in two equal instalments of US$150,000 each, on or before 31 August 2021 and 31 August 2022 respectively. Petra is also entitled to a 5% royalty on the sale of diamonds commercially produced from any kimberlite which falls within the licence areas covered in the sale. Botswana Diamonds has the option to buy-out the royalty for a cash payment of US$2 million.
The sale is subject to a number of regulatory approvals, including Ministerial consent in Botswana, approval from Petra’s lenders and noteholders and, to the extent required, approval from the Botswana Competition Commission. The long-stop date for fulfilment of the Conditions Precedent is 31 August 2020, which may be extended by mutual agreement of the two parties.
Richard Duffy, Chief Executive of Petra, commented:
“This disposal forms part of our strategy to focus on driving 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. We wish Botswana Diamonds well with their exciting exploration programme in Botswana and look forward to following their progress.”
Petra plans to apply the proceeds of the sale to general working capital purposes.
Source: Company Press Release