Adelaide-based Tychean Resources will acquire a 74% stake in the South Africa-based Blom Diamonds, according to reports in the Australian media. Reports peg the value of the deal at US$ 4.1 million based on achievement of certain targets over the next three years. They noted that the deal involves the issue of 68.45 million Tychean shares to Blom, who will also be MD of Tychean when the deal is finalised in approximately 90 days.

Blom Diamonds comprises Blom Diamond Cutting Works and Ernest Blom Diamonds, and engages in the trading, beneficiation, cutting and polishing of diamonds, a statement by Tychean said. It is headed by Ernest Blom, who is currently the President of the WFDB.

This will be the Australian miner’s first foray into the diamond industry, though it has already invested in gold mining projects.

Tychean Resources has been reported as saying that the acquisition will help it emerge as a “vertically integrated diamond-focussed company”, which will distinguish it from other pure mining companies.

In a statement to the ASX, the Company has been quoted as saying, “Consequently, Tychean will have the necessary experience to combine the full value chain of diamond exploration, production, trading, beneficiation, cutting and polishing, in turn creating a vertically integrated investment vehicle.”

The company believes that the value add as a result of the acquisition of a diamond cutting and polishing enterprise would be between 20 to 30%.play time