GDB property to sale for US$5.4m
Ghaghoo
diamond mine
The
primary asset in Botswana
Gem
Diamonds Limited has entered into a binding agreement with Pro Civil (Pty) Ltd
for the sale of 100% of the share capital of Gem Diamonds Botswana Proprietary
Limited (GDB). Pro Civil is a company registered in Botswana.
GDB's
primary asset is the Ghaghoo diamond mine in Botswana which has been on care
and maintenance since March 2017, and which is wholly owned by GDB. GDB reported for the period ended 31
December 2018, loss before tax of BPW 49.5 million (US$ 4.9 million) and, as at
the same date, had gross assets of BWP 42.3 million (US$ 3.9 million).
Under
the share sale agreement, Pro Civil will make a once-off upfront payment of
US$5.4m for the share capital of GDB.
Gem Diamonds will use the sale proceeds for general corporate
purposes. In addition, Pro Civil will
assume 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 2019.
The Government of Botswana has been consulted throughout the process and
is fully conversant with the relevant details of the transaction.
Clifford
Elphick, Chief Executive Officer of Gem Diamonds, commented, “This sale is in
line with our strategic objective to dispose of non-core assets. Gem Diamonds remains focused on optimising
production and efficiency at the Letšeng mine in Lesotho. On behalf of Gem, we wish the Pro Civil team
well for the future, and I would also like to thank the Government of Botswana
for its assistance during the sale process.”
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