Contango Holdings Lubu Coalfields

Botswana Diamonds and VAST Resources have agreed the terms of a new agreement in respect of their proposed joint venture in the Chiadzwa / Marange area of Zimbabwe.

Botswana Diamonds concluded an agreement with Vast for the development of Vast’s Heritage concessions in the Marange Diamond Fields, and that a separate agreement would cover the joint development of diamond properties outside of the Marange Diamond Fields.

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Vast subsequently entered into a joint venture agreement with Chiadzwa Mineral Resources, a Zimbabwe company owned by the Chiadzwa Community Development Trust, in relation to an area of diamond prospectivity known as the Chiadzwa Community Diamond Concession within the Marange Diamond Fields, and established a new company, Katanga Mining, for the purpose of the operating the Chiadzwa Community JV.

Katanga intends to conclude a joint venture agreement with Zimbabwe Consolidated Diamond Company for the purposes of exploring and mining at the Chiadzwa Community Diamond Concession and marketing the diamonds derived from the operation.

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Due to these changes in the area likely to be licenced by Vast Resources, BOD and Vast have today entered into the New Agreement which replaces the Heritage Concession Agreement.

The principal terms of the new agreement are as follows:

  • A new company (“Newco”) has been formed to hold the interests of Vast in the Chiadzwa Community JV and Katanga
  • When the detailed agreement between Katanga and ZCDC becomes effective, Botswana Diamonds will be issued with new shares representing 2.5% of Newco
  • In consideration for the issue of the Newco shares, BOD has agreed to provide for 5 years its management know-how at no charge to Vast and Newco for exploration, mining, processing and marketing in relation to the Chiadzwa Community Diamond Concession
  • Vast will provide all capital requirements for the project commencement on a loan account to Newco, up to a maximum of US$10 million

If Botswana Diamonds wishes to sell or dispose of its interest in Newco, the New Agreement grants Vast the right to acquire its interest in Newco at fair value.

John Teeling, chairman Botswana Diamonds, comments:

“Zimbabwe is opening up to investment. The country is rich in resources and has significant diamond potential. Vast Resources is at an advanced stage in finalising an agreement with the Central Authorities on a package of ground in the Chiadzwa / Marange area.

“This is a revised package from that on which Botswana Diamonds and Vast Resources had previously agreed to cooperate. In the light of this development, our previous agreement with Vast has been revised on new terms acceptable to the board.

“We look forward to the diamond agreement being concluded and to work starting on what is highly prospective ground. Botswana Diamonds is also studying additional opportunities in Zimbabwe.”