LSE-listed Gem Diamonds has entered into a binding agreement for the sale of 100% of the share capital of Gem Diamonds Botswana Proprietary, whose primary asset is the Ghaghoo diamond mine.
Pro Civil, a company registered in Botswana, will acquire the company and Ghaghoo which has been on care and maintenance since March 2017, and is wholly owned by Gem Diamonds Botswana (GDB).
GDB reported for the period ended 31 December 2018, loss before tax of BPW 49.5 million (US$4.9 million) and, as at the same date, had gross assets of BWP 42.3 million (US$ 3.9 million).
Under the share sale agreement, Pro Civil will make a once-off upfront payment of $5.4 million for the share capital of GDB. Gem Diamonds will use the sale proceeds for general corporate purposes. In addition, Pro Civil will assume the environmental liability currently associated with GDB.
Subject to regulatory approvals within Botswana, the transaction is expected to be completed in the third quarter of 2019. The Government of Botswana has been consulted throughout the process and is fully conversant with the relevant details of the transaction.
Clifford Elphick, CEO of Gem Diamonds, comments:
“This sale is in line with our strategic objective to dispose of non-core assets. Gem Diamonds remains focused on optimising production and efficiency at the Letšeng mine in Lesotho.”
“On behalf of Gem, we wish the Pro Civil team well for the future, and I would also like to thank the Government of Botswana for its assistance during the sale process.”