LSE-listed Petra Diamonds is selling its exploration assets in Botswana, held through Sekaka Diamonds, to Aim-listed Botswana Diamonds (BOD) for $300 000 and a 5% royalty on future revenues.
The exploration assets include the KX36 diamond discovery, along with two adjacent prospecting licences and a diamond processing plant.
The cash consideration is payable on a deferred basis, with $150 000 payable on August 31, 2021, and the balance on or before August 31, 2022.
BOD also has the option to buy out the royalty for $2-million.
Petra CEO Richard Duffy says the disposal is part of the company's strategy of focusing on driving efficiencies from its producing mines.
The transaction, however, allows it to maintain upside to potential future commercial production.
“KX36 is the most significant diamond discovery in Botswana since Orapa and Jwaneng. KX36, together with its associated prospecting licences, adds scale to the company’s Sunland and Maibwe joint venture properties in the Kalahari.
"BOD will refine resource estimates of KX36 and development options. The Sekaka exploration database adds to BOD's extensive database, improving our diamond exploration programme, particularly in the Kalahari where we are currently focused,” comments BOD MD James Campbell.
“This is an important step forward for BOD. KX36 is a very significant diamond discovery and potentially offers upside potential – as do the two contiguous prospecting licences. You rarely, if ever, find a kimberlite pipe on its own and further exploration may find more kimberlite pipes.
"KX36, located deep in the Kalahari, presents challenges, but the greatest challenge of all is overcome – finding a significantly sized high-grade deposit. We have evaluated options on KX36 and believe we can add value to the discovery,” adds BOD chairperson John Teeling.