Kimberley Diamonds Limited (KDL) says it will auction the diamonds that Capital Diamonds Botswana failed to sell under an agreement the two companies agreed recently. Lerala Diamond Mines Limited, a subsidiary of KDL, last month entered into an offtake sales agreement with Alpha Capital (Pty) Ltd trading as Capital Diamonds Botswana a Botswana based company for the sales of all diamonds produced by Lerala Diamond Mine in a period of 6 months.
According to the ASX listed company, to date Capital Diamonds has failed to make payment for the first parcel of diamonds it had agreed to acquire under the off-take agreement. This is despite numerous written acknowledgements that the payment is due as well as numerous written promises from Capital Diamonds that the payment will be made without any further delay.
“As a result, Lerala served Capital Diamonds with a notice of default in relation to the first parcel of diamonds which required Capital Diamonds to make payment no later than 28 October 2016. No such payment has been received to date and Capital Diamonds is in default in relation to payment for the first parcel of diamonds,” KDL said.
“Lerala now intends to sell the defaulted first parcel through the upcoming DDA tender and commence legal action against Capital Diamonds for damages and false representations.”
It added: “Lerala reserves all rights in relation to the remaining supply of diamonds under the off-take sales agreement with Capital Diamonds.”