London, England — MININGREVIEW.COM — 25 September 2008 – African Diamonds plc – the AIM and Botswana Stock Exchange-listed diamond explorer and emerging producer – says it expects to complete negotiations on a mining licence for its AK6 discovery in Botswana by the end of the month.
Reuters reports from here that African Diamonds’ partner De Beers had attempted to stall the development over a row with Botswana’s government about the marketing of the mine’s production. It had applied for a retention licence, against the advice of African Diamonds, which then launched legal proceedings against De Beers and the joint venture’s operating company Boteti.
The news agency quoted a statement from African Diamonds which said that Botswana’s director of mines had thrown out the retention licence application, because a mining licence application had still been pending. The company also said it had been notified by De Beers that the marketing dispute had been resolved.
“This is hugely positive for African Diamonds,” said analyst Des Kilalea at house broker RBC Capital Markets. “The prospect of a delay in bringing AK06 into production and a court action against De Beers had weighed on the share price and led to a marked reduction in our valuation and target price, he added.
African Diamonds chairman John Teeling said the company was satisfied with the new marketing agreement, and was optimistic a licence would be awarded following “strong encouragement” from the Botswana government.
“Final details are now being worked out to enable agreement on the terms of a mining licence to be completed by 30 September,” he said in a statement. “Our court case is on hold.”