Following outside interest in acquiring Vutomi Mining, the South African associate company of Botswana Diamonds, the board of Botswana has exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi Mining and Razorbill Properties 12.
Vutomi holds the mineral rights to the Thorny River Diamond Project as well as other exploration assets.
The consideration for Vutomi comprises 56,989,330 new ordinary shares in the Company which, at the closing mid-market price on 28th September 2021 of 1.10p per share, is valued at £627k.
The Company has agreed that immediately on completion of the Acquisition, the Company will sell 26% of Vutomi for a deferred consideration of US$316,333 to the Company’s local South African Empowerment partner, Baroville Trade and Investments 02, in order to comply with South African requirements on empowerment ownership, which will be funded by a loan from Botswana Diamonds. On completion, the Company will own 76% of Vutomi.
The acquisition of Vutomi is conditional on, inter alia, customary regulatory and competition authority approvals in South Africa, including MPRDA Section 11 approval for the transaction, which are expected to complete during the first half of 2022.
Vutomi and Razorbill are currently owned by, among others, James Campbell and the other directors of Vutomi. These shareholders are related parties as defined by the AIM Rules and accordingly, the transaction has been treated as a related party transaction pursuant to AIM Rule 13.
James Campbell, Managing Director, commented:
“Since working on Thorny River thirty years ago, we recognised potential for discoveries on a kimberlite system spanning 20km. Recent drilling vindicated this view and indicates potential for additional nearby discoveries.”
“Following a third party offer for Vutomi, Botswana Diamonds has exercised its pre-emption rights. This transaction streamlines exploration activities and involves the local community as supportive stakeholders in this development.”
John Teeling, Chairman, commented:
“We are very positive on the production opportunities for the Thorny River properties owned by Vutomi. An outside company made an offer for Vutomi. Rather than accept the offer we exercised our pre-emptive right to acquire the outstanding shares. In turn we then sold sufficient shares to a local South African group to ensure compliance with black empowerment regulations. The unsolicited outside offer reinforced our belief that there is something worthwhile in Thorny River. We acted to preserve shareholder value”.