LSE-listed Gem Diamonds has entered into a binding agreement with Pro Civil for the sale of 100% of the share capital of Gem Diamonds Botswana (GDB), which holds the Ghaghoo diamond mine, which has been on care and maintenance since March 2017.
Under the share sale agreement, Pro Civil will make a one-off upfront payment of $5.4-million for the share capital of GDB. Gem Diamonds will use the sale proceeds for general corporate purposes.
Pro Civil will also be assuming the environmental liability currently associated with GDB.
Subject to regulatory approvals within Botswana, the transaction is expected to be completed in the third quarter of this year.
Gem Diamonds CEO Clifford Elphick says the sale is in line with the company’s strategic objective to dispose of noncore assets.
He adds that Gem remains focused on optimising production and efficiency at its Letšeng mine, in Lesotho.