London-listed Botswana Diamonds has exercised its pre-emptive right to acquire the outstanding third-party interests in Vutomi Mining and Razorbill Properties 12, giving it control of the Thorny River project in South Africa.
Vutomi and Razorbill are currently owned by Botswana Diamonds MD James Campbell and other Vutomi directors.
Botswana Diamonds will issue 56.99-million shares, valued at about £627 000, as purchase consideration for the third-party interests.
On completion of the acquisition, Botswana Diamonds intends to sell 26% of Vutomi for a deferred consideration of $316 333 to the company’s local South African empowerment partner, Baroville Trade and Investments 02. The consideration will be funded by a loan from Botswana Diamonds.
“We are very positive on the production opportunities for the Thorny River properties owned by Vutomi. An outside company made an offer for Vutomi. Rather than accept the offer, we exercised our pre-emptive right to acquire the outstanding shares.
"The unsolicited outside offer reinforced our belief that there is something worthwhile in Thorny River. We acted to preserve shareholder value," says Botswana Diamonds chairperson John Teeling.
"Since working on Thorny River 30 years ago, we recognised potential for discoveries on a kimberlite system spanning 20 km. Recent drilling vindicated this view and indicates potential for additional nearby discoveries.
“Following a third-party offer for Vutomi, Botswana Diamonds has exercised its pre-emption rights. This transaction streamlines exploration activities and involves the local community as supportive stakeholders in this development,” comments Campbell.