Petra Diamonds has executed a non-binding MoU to sell 50% of the entity that holds Petra’s shareholding in Williamson Diamonds (WDL), along with a pro rata portion of shareholder loans owed by WDL, to Caspian or its nominee (Caspian) for a total consideration of US$15 million.
Caspian is the long-term technical services contractor at the Williamson Mine in Tanzania.
WDL is the operator of the Williamson Mine. WDL is currently 25% owned by the Government of Tanzania and 75% owned by Petra, with Petra having acquired its majority interest in WDL in 2009. However, further to the Framework Agreement with the Government of Tanzania announced on 13 December 2021, which provides for a capital restructuring of the WDL entity, Petra’s effective interest is due to decrease to 63% and the Government of Tanzania’s to increase to 37%.
Richard Duffy, Chief Executive of Petra, commented:
“We are very pleased to be partnering with Caspian, who bring considerable local and mining experience. This will assist us in optimising the orebody for the benefit of all of Williamson’s stakeholders, both in the short term as we continue to ramp-up operations and in the longer term to fully realise the mine’s potential in an improved economic environment.
“Our new arrangement with Caspian, following the Framework Agreement signed with the Government of Tanzania on 13 December, puts Williamson on a very solid basis for the future. The reduction in Petra’s equity interest in to WDL, from 75% to 31.5% while still retaining control, both reduces Petra’s exposure in line with our stated objectives outlined in our Preliminary Results while maintaining a share of the upside that we believe exists following the signing of the Framework Agreement with the Government who continue as partners.”
Rostam Azizi, Chairman of Caspian, commented:
“Caspian is a wholly Tanzanian owned company. It is also Tanzania’s largest mining contractor with over 30 years mining related experience. We have been the contractor of choice to most mines in Tanzania and have maintained long and successful relationships with companies such as Petra, De Beers, Barrick and AngloGold Ashanti. In addition, we also own the largest fleet of mining equipment in Tanzania. As a company, we are committed to adopting and adhering to the latest internationally recognised standards throughout all aspects of our business.
“We have been contracting at the Williamson Mine, the largest kimberlite diamond mine in the world by surface area for close to 20 years and as such we are particularly pleased to enter into this next phase of our involvement at the mine as co-owners. We recognise its viability in providing sustainable employment and a significant contribution to the Tanzanian economy.”