Dec 02, 2015

De Beers Consolidated Mines Enters Into Agreement to Sell Kimberley Mines

De Beers Consolidated Mines (DBCM) announced yesterday that it has entered into an agreement to sell Kimberley Mines (including the tailings mineral resources (TMR)) as a going concern to Ekapa Minerals (Pty) Limited (Ekapa Minerals) , described as an investor consortium. “The consortium comprises Ekapa Mining (Pty) (Ekapa Mining) (50.1%) and Petra Diamonds Limited (Petra) (49.9%), which both have proven track records in diamond mining in Kimberley; Ekapa Mining as a medium sized TMR processing business, and Petra Diamonds in the underground workings of the Kimberley Underground Mines,” De Beers said in its statement announcing the proposed sale.

Phillip Barton, CEO of DBCM, commented: “I am hugely appreciative and grateful for the commitment of our employees over many years and wish to thank them for their dedication. Although the decision to sell the Mine has not been easy, it was the right thing to do to give it a future.”

The transaction is expected to be finalised  after due process is completed  in Q1 2016.

In a statement simultaneously released by Petra Diamonds Limited, the Company said that  the acquisition was agreed upon for a  consideration of ZAR102 million (ca. US$ 7.2 million); and that this amount “will be funded by Ekapa Mining and Petra according to their percentage interests in the consortium, with Petra’s share being ZAR 50.9 million (ca. US$ 3.6 million)”.

 

Further, Petra Diamonds said:  “Ekapa Minerals expects to produce circa 700,000 ctpa in the first three years of operation of the Kimberley Mines, with revenue of ca. ZAR920 million (ca. US$ 65 million) per annum, based on an assumed diamond price of ca. US$95 per carat.”

 

The new owners expect the Kimberley Mines operation to be cashflow positive in the first year of operation itself after the transaction pf sale is completed. The initial working capital of ZAR 200 million (ca. US$ 14 million) will be financed 100% by Ekapa Minerals on a standalone basis. Ekapa Mining will also be the lead operator of the Kimberley Mines business and will be managed by Jahn Hohne, a highly respected and successful operator of tailings in the Kimberley area, Petra Diamonds indicated.

 

“We are delighted to have formed this consortium with Ekapa Mining in the acquisition of an interest in the Kimberley Mines, and we look forward to working with them to build upon their proven capabilities in tailings retreatment operations in Kimberley, as well as their strong local relationships,” commented Johan Dippenaar, Petra’s CEO.

 

Jahn Hohne, the CEO of Ekapa Mining said: “The most compelling aspect of this Transaction is the extension of the mining and processing of Kimberley’s TMRs far into the future.  Ekapa Minerals will be operated and managed in Kimberley by the people of Kimberley and to the benefit of the area. ”