AIM listed Firestone Diamonds says it has agreed to extend the option period granted to Amulet Diamond Corporation to purchase Firestone’s BK11 asset until 31 December 2018.
Amulet, is a Canadian special purpose vehicle (spv) formed for the purpose of the disposal by a group of private investors led by Gareth Penny and Diacore Diamond Group (PTY) Limited, a multinational diamond company with diversified interests in the diamond industry.
“Amulet has made steady progress towards completing the bulk sampling plant but due to unforeseen equipment delivery delays, Amulet requested an extension to the option period which has been granted by Firestone,” said the company in an update.
BK11 is a diamond asset in Botswana, currently on care and maintenance. Amulet is funding the construction and operation of a bulk sampling plant at the BK11 mine during the option period to further assess the deposit.
Amulet was to acquire an option, effective from 1 June 2017 for a period of up to 14 months, Firestone’s wholly owned subsidiary Firestone Diamonds (Botswana) (PTY) Limited and its 90% interest in Monak Ventures (PTY) Limited (together the “Botswana Companies”), which hold Firestone’s interests in Botswana, for a total consideration of US$5.1 million in cash.
Pursuant to the Option Agreement, US$0.1 million is payable immediately with the balance, being US$5.0 million, to be placed in escrow no later than 10 days following the exercise of the Option.
“In addition, Amulet will, during the Option Period and, in the event it exercises the Option, from the time it exercises the Option up and until completion of the Disposal, pay the ongoing cost of BK11’s care and maintenance programme up to a maximum of US$30,000 per month. The Company will also be entitled to retain 10% of the proceeds from diamonds sold from the bulk sampling programme (after royalties and agreed expenses) during this period,” said Firestone at the time.