Firestone Diamonds PLC Option Agreement in respect of Botswana operations (0283G)
24 May 2017 - 4:00PM
UK Regulatory
TIDMFDI
RNS Number : 0283G
Firestone Diamonds PLC
24 May 2017
24 May 2017
Firestone Diamonds plc
("Firestone", the "Group" or the "Company") (AIM: FDI)
Option Agreement in respect of Botswana operations
Firestone Diamonds plc, the AIM-quoted diamond company, is
pleased to announce that it has entered into a conditional option
agreement (the "Option Agreement") for the potential disposal of
its Botswana operations, which include its interest in the BK11
mine, to Amulet Diamond Corporation ("Amulet") for a total
potential consideration of US$5.1 million in cash (the
"Disposal").
Further information on the Disposal
Pursuant to the Option Agreement, Amulet, a Canadian special
purpose vehicle formed for the purpose of the Disposal by a group
of private investors led by Gareth Penny and Diacore Diamond Group
(PTY) Limited, a multinational diamond company with diversified
interests in the diamond industry, will acquire an option,
effective from 1 June 2017 for a period of up to 14 months (the
"Option Period"), to acquire Firestone's wholly owned subsidiary
Firestone Diamonds (Botswana) (PTY) Limited ("Firestone Botswana")
and its 90 per cent. interest in Monak Ventures (PTY) Limited
("Monak") (together the "Botswana Companies"), which hold
Firestone's interests in Botswana, for a total consideration of
US$5.1 million in cash (the "Option"). Pursuant to the Option
Agreement, US$0.1 million is payable immediately with the balance,
being US$5.0 million, to be placed in escrow no later than 10 days
following the exercise of the Option.
If Amulet exercises the Option during the Option Period,
completion of the Disposal is subject to, inter alia, satisfaction
of the following conditions within 12 months of the date of the
exercise of the Option:
-- the parties gaining approval from the Botswana Competition Authority; and
-- the parties obtaining Botswanan ministerial approval for the
transfer of the controlling interest in Monak to Amulet.
Furthermore Amulet will fund the construction and operation of a
bulk sample plant and the carrying out of a bulk sample programme
at the BK 11 mine during the Option Period to further assess the
deposit. In addition, Amulet will, during the Option Period and, in
the event it exercises the Option, from the time it exercises the
Option up and until completion of the Disposal, pay the ongoing
cost of BK11's care and maintenance programme up to a maximum of
US$30,000 per month. The Company will also be entitled to retain
10% of the proceeds from diamonds sold from the bulk sampling
programme (after royalties and agreed expenses) during this
period.
As at 30 June 2016, the aggregate net assets for the Botswana
Companies was US$4.1 million and for the year ended 30 June 2016,
the Botswana Companies achieved an aggregate loss of US$2.0 million
before foreign exchange losses on conversion from local
currencies.
The proceeds of the Disposal will be used by the Company for
general working capital purposes.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
For more information contact
+44 (0)20 8741
Firestone Diamonds plc 7810
Stuart Brown
+44 (0)20 7409
Strand Hanson Limited (Nomad) 3494
Stuart Faulkner
Richard Tulloch
James Dance
Macquarie Capital (Europe) +44 (0)20 3037
Limited (Joint Broker) 2000
Raj Khatri
Nick Stamp
Mirabaud Securities LLP
(Joint Broker)
+44(0) 20 3167
Rory Scott 7220
+44(0) 20 3167
Ed Haig-Thomas 7222
Tavistock (Public and Investor +44 (0)20 7920
Relations) 3150
+44 (0)7788 554
Jos Simson 035
Emily Fenton
Background information on Firestone
Firestone is an international diamond mining company with
operations focused in Lesotho. Firestone is currently in the
process of commencing production at the Liqhobong Diamond Mine in
Lesotho.
Lesotho is emerging as one of Africa's significant new diamond
producers, hosting Gem Diamonds' Letseng Mine, Firestone's
Liqhobong Mine and Namakwa Diamonds' Kao Mine.
For more information please visit:
www.firestonediamonds.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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