TIDMBOD
RNS Number : 1748P
Botswana Diamonds PLC
16 February 2021
16(th) February 2021
Botswana Diamonds PLC
("Botswana Diamonds" or the "Company")
Cooperation agreement to fast-track Botswana diamond
exploration
Botswana Diamonds ("BOD" or the "Company"), the AIM and BSE
listed diamond explorer, is pleased to announce that it has today
entered into a cooperation agreement to fund exploration of its
prospecting licence assets in Botswana with Diamexstrat Botswana
Pty Ltd ("DESB"), which in turn has an alliance agreement with
Burgundy Diamond Mines Limited ("Burgundy" ASX: BDM). BOD's
prospecting assets comprise the recently acquired Sekaka Diamonds
Exploration Pty Ltd ('Sekaka') database and Prospecting Licenses ,
as well as the Prospecting Licences held by BOD's subsidiary,
Sunland Minerals Pty Ltd ("Sunland Minerals").
Cooperation Agreement highlights;
- DESB (and its partner, Burgundy) can earn up to a 70% interest
in BOD's Botswana Sunland Minerals and Sekaka's Prospecting
Licences
- BOD can earn a 15% interest in Prospecting Licences held by
DESB (and partners) on the first US$1.5m spent on exploration by
DESB where BOD's database assists in the discovery of a primary
kimberlite
- On 3(rd) party Prospecting Licences where targets are
identified in BOD's database, a joint earn-in will be negotiated at
the time
- For new Botswana Prospecting Licences, DESB (and its partner, Burgundy) can earn up to 70%
James Campbell, Managing Director, commented: " I am delighted
to partner with Diamexstrat (and in turn its partner, Burgundy) to
progress our extensive and highly prospective exploration assets in
Botswana which comprises Sekaka Diamonds (acquired last year) and
with our own drill-ready prospects in Sunland Minerals. I look
forward to working with the Diamexstrat and Burgundy teams made-up
of complimentary highly experienced and leading experts in the
field of diamond exploration and project development".
John Teeling, Chairman, commented: " Botswana is one of the
world's best addresses for diamond exploration. The combination of
a fresh approach and advanced technology, supported by a recovering
diamond market, presents us with significant opportunities. I am
delighted to announce this partnership with experienced
Diamexstrat, and its ASX listed-partner, Burgundy, which expands
and deepens our exploration work. This is a comprehensive
agreement. On our ground, DESB (and partners) will get 51% of each
licence by discovering a diamondiferous kimberlite rising, to 70%
by completing a bankable feasibility study. Where our database is
used to find targets on ground held by the partners, there is a
free carry for BOD of 15% on the first US$1.5m spent on
exploration. Where the data is used to identify targets on third
party licences or on fresh ground, we will jointly negotiate earn
in agreements. On new licences, BOD will hold 75% falling to 30% on
delivery of a bankable feasibility study by DESB".
Cooperation Agreement
The cooperation agreement (the "Agreement") has four sections,
each with different conditions, relating to discoveries on:
-- Prospecting Licences held by BOD or any subsidiary of BOD.
-- Prospecting Licences held by DESB or any subsidiary of DESB.
-- Areas where Prospecting Licences for diamonds are held by third parties.
-- Areas where new Prospecting Licences are applied for.
Under the Agreement, the parties have agreed to utilise BOD's
diamond exploration database, which it acquired in 2020 as part of
the acquisition of Sekaka Diamonds Exploration Pty Ltd ("Sekaka").
The database contains the results of work undertaken by Sekaka'
former owner, Petra Diamonds, since 2005, and includes data in
respect of airborne (including the Falcon survey) and ground
magnetics (including gravity and EM), in addition to heavy mineral
sampling.
Prospecting Licences held by BOD or its subsidiaries
DESB has six months to conduct an initial review of BOD's
database , in order to identify exploration targets within any of
BOD's existing Sunland and Sekaka Prospecting Licences (excluding
the KX36 Kimberlite held by Sekaka) (the "Designated PL"). DESB
will be entitled to earn a 50% interest in a Designated PL by
meeting the annual minimum Exploration Expenditure commitment on
the Designated PL and in addition either discovering a kimberlite
through the intersection of kimberlite in any drill holes or a
potential secondary diamondiferous alluvial deposit through the
intersection of gravels in a drill hole or pit.
DESB shall be entitled to earn an additional 1%, to hold 51% in
any Designated PL, by proving the primary kimberlite or alluvial
deposit to be diamondiferous through funding the required
micro-diamond analysis or bulk sampling. DESB will also be entitled
to earn a further 19%, to hold 70% in the Designated PL, by
subsequently funding and delivering a bankable feasibility study.
Any Prospecting Licence not selected by DESB at the end of the
six-month period will remain wholly-owned by BOD.
Prospecting Licences held by DESB or any subsidiary of DESB
Where it is agreed that geological data present in the database
that was not previously available to DESB has assisted in the
discovery of a kimberlite or a secondary alluvial deposit within
the Exploration Area BOD shall be granted a 15% free carry for the
initial approved US$1.5 million of Exploration Expenditure by DESB
on the discovery. Once the Exploration Expenditure has been
incurred, each party will contribute funding in accordance with its
interest or be diluted pro-rata.
Any area where Prospecting Licences for diamonds are held by
third parties
The Parties will jointly negotiate an Earn In arrangement with
any third party holding more than 50% in any Prospecting
Licence.
Any areas where new licences are applied for
For any new ground BOD will initially hold 75% falling to 30%
upon completion of a bankable feasibility study.
About Diamexstrat
Diamexstrat is a privately owned company focused on diamond
exploration in Botswana chaired by Gerard de la Vallee Poussin and
with Barry Bayly as the Chief Executive Officer. Both Gerard and
Barry are well known to BOD and have extensive experience in the
exploration for diamondiferous kimberlites in Africa.
Further AIM disclosures
Sunland Minerals holds 12 active Prospecting Licences in the
Gope/CKGR (Kalahari) area. As at 30 June 2020, the audited carrying
value of BOD's Sunland Minerals assets amounted to GBP1.1 million
and Sunland's loss before tax amounted to GBP43,101. In the year
ended 30 June 2020, Sunland's Exploration Expenditure, mainly
comprising licence fees and the costs of maintaining the licence in
good standing, together with agreed fixed costs and expenses,
amounted to GBP65,760.
On 30 November 2020, Botswana Diamonds completed the acquisition
of Sekaka which holds three Prospecting Licences in the Central
Kalahari Game Reserve in Botswana, PL169/2019, PL058/2007 and
PL224/2007, which includes the KX36 kimberlite pipe. The
acquisition also included an extensive database. The consideration
comprised a cash payment of US$300,000 and a 5% royalty on future
revenues. The first deferred consideration cash payment of
US$150,000 will be payable on 27 November 2021, being the first
anniversary of completion of the acquisition and the balance on or
before 27 November 2022. In Sekaka's audited annual financial
statements for the year ended 30 June 2019, Sekaka reported a loss
before taxation of Pula 16,875,179 (equivalent to approximately
GBP1.16 million, which included a non-cash foreign exchange loss of
Pula 11,688,432 (equivalent to approximately GBP0.8 million) on the
carrying value of the historic intercompany debt which was
extinguished on acquisition. As at 30 June 2019, Sekaka had audited
total assets of Pula 6,565,700 (equivalent to approximately
GBP425k).
This release has been approved by James Campbell, Managing
Director of Botswana Diamonds plc, a qualified geologist
(Pr.Sci.Nat), a Member of the Geological Society of South Africa, a
Fellow of the Southern African Institute of Mining and Metallurgy,
a Fellow of the Institute of Materials, Metals and Mining (UK) and
with over 35-years' experience in the diamond sector.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014. The person who arranged
for the release of this announcement on behalf of the Company was
James Campbell, Director
A copy of this announcement is available on the Company's
website, at www.botswanadiamonds.co.uk
Enquiries:
Botswana Diamonds PLC
John Teeling, Chairman +353 1 833 2833
James Campbell, Managing Director +27 83 457 3724
Jim Finn, Director +353 1 833 2833
Beaumont Cornish - Nominated Adviser
Michael Cornish
Roland Cornish +44 (0) 020 7628 3396
Beaumont Cornish Limited - Broker
Roland Cornish
Felicity Geidt +44 (0) 207 628 3396
First Equity Limited - Joint Broker
Jason Robertson +44 (0) 207 374 2212
Blytheweigh - PR +44 (0) 207 138 3206
Megan Ray +44 (0) 207 138 3553
Rachael Brooks +44 (0) 207 138 3206
Said Izagaren +44 (0) 207 138 3206
Naomi Holmes +44 (0) 207 138 3206
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Ross Murphy +353 (0) 1 661 4055
www.botswanadiamonds.co.uk
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