Industry News by Nemesis

Firestone Diamonds To Sell Botswana Assets To Diacore & Ex-De Beers CEO

June 1, 2017

Firestone Diamonds, an international diamond mining company with operations focused in Lesotho, has entered into a conditional option agreement to potentially sell off its Botswana operations, with the main asset being its interest in the BK11 mine, to Amulet Diamond Corporation for a reported US$5.1 million in cash.


Amulet is a Canadian special purpose vehicle formed by a group of private investors led by former De Beers CEO Gareth Penny and Diacore Diamond Group Limited, a multinational diamond company with diversified interests in the diamond industry.


Diacore provides rough and polished diamonds to customers around the world, and specializes in manufacturing high-end colored and exceptional diamonds as well as unique jewelry. The company has manufacturing facilities in Botswana, South Africa, Namibia and New York. 


Under the terms of the agreement, Amulet will acquire an option, effective from 1 June 2017 for a period of up to 14 months, to acquire Firestone's wholly owned subsidiary Firestone Diamonds (Botswana) Limited and its 90 percent interest in Monak Ventures Limited, which hold Firestone's interests in Botswana. 


If Amulet exercises the option, $100 000 will be immediately payable, with the balance placed in escrow within ten days. The transaction still needs approval from the Botswana Competition Authority and from the Botswana government for the transfer of the controlling interest in Monak to Amulet.


Amulet will fund the construction and operation of a bulk sample plant and carry out of a bulk sample program at the BK11 mine during the option period to further assess the deposit. Firestone will be entitled to 10% of the proceeds, after royalties and agreed expenses, from the diamonds sold from the bulk sampling programme during this period. In addition, Amulet will contribute up to $30,000 a month towards BK11's care and maintenance costs.


Diacore most recently manufactured the 59.60-carat Pink Star diamond, which fetched $71.2 million at a Sotheby’s auction last month, and lists creations to its name such as the 203.04 carat, flawless, pear-shaped De Beers Millennium Star, the 27.64 carat, fancy vivid blue Heart of Eternity, the 100.01 carat pear-shape Star of the Season, the largest heart shape 200.07 carat, internally flawless La Luna and the 14 carat, pear shaped Blue Empress. 


Penny was CEO of De Beers for five years, leaving in 2010, and is currently the non-executive chairman of Russian metal miner Norilsk Nickel, and chairman of Pangolin Diamonds Corp.


Photo: Diacore


Source: The Diamond Loupe

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