Kimberley Diamonds Limited has completed the acquisition of Mantle Diamonds Limited, including Mantle’s wholly owned Lerala Diamond Mine in Botswana, which is currently on care and maintenance.
Under the terms of the acquisition, the shareholders in Mantle will receive 13,566,317 new ordinary KDL shares to be issued on 24 February 2014. Mantle’s majority shareholders, being funds managed or advised by Pacific Road Capital Management Pty Ltd (“Funds”) will now have an overall stake of 10.29% in KDL.
For a period of 12 months from 24 February 2014, each of the Funds holding KDL shares on their own behalf issued to them on 24 February 2014 cannot, without KDL’s prior written consent:
(i) undertake an on-market disposal of those KDL shares; or (ii) undertake an off-market disposal of those KDL shares for a sale price per share that is greater than a 7.5% discount to the closing price for KDL shares on the business day prior to the disposal.
In addition to the Lerala Diamond Project in Botswana, KDL acquires interests in the Tenby and Commonwealth exploration projects in known diamond producing areas in Canada’s Northwest Territories. The licences in these two projects are managed by Diavik Diamond Mines under a joint venture agreement and KDL’s interest in these areas is free carried during the exploration phase, which is ongoing.
The Tenby and Commonwealth project areas are located within 5km of the Diavik diamond mine (Rio Tinto) and within 25km of the Ekati diamond mine (Dominion).
“The Lerala Diamond Mine provides Kimberley with an excellent near-term development opportunity beyond our flagship Ellendale Diamond Project and our recently acquired Argyle Smoke Creek Alluvial Diamond Project,” Executive Chairman of Kimberley Diamonds Limited Alex Alexander said.
“Lerala has great potential and we are planning to bring the mine back into production this year. Rough diamond prices are on the rise and KDL is well positioned to capitalise on this. This acquisition is in line with our growth strategy of becoming a diversified diamond producer and we will continue to look for further acquisition opportunities.”
Lerala is situated in north-east Botswana, 34km north of the Martin’s Drift Border Post with South Africa, and comprises five diamondiferous kimberlite pipes totalling 6.66ha in size.
The kimberlites were discovered by De Beers in the early 1990s and subjected to limited mining by DiamonEx Ltd in 2008. Most recently, Mantle operated the mine between February and July 2012, producing 73,403 carats from 0.26 Mt at 28.2 cpht.
The mine and processing plant was placed on care and maintenance in July 2012.
Kimberley intends to recommence production at Lerala in 2014. A 230 tph processing and recovery plant situated on site will be modified to reach 1.9 Mtpa of ore throughput.
Lerala has a 15 year fully-permitted mining licence covering an area of 21.86km2. Lerala will target a production rate of approximately 400,000 carats per annum (cpa)
Kimberley Diamonds Limited owns and operates the Ellendale Diamond Mine in Western Australia. The mine supplies approximately half of the world’s rare fancy yellow diamonds and currently produces about 120,000 carats of diamonds per year.
