Botswana Diamonds (BOD) has concluded an agreement with Vast Resources to develop concessions in the Marange Diamond Fields (MDF) of eastern Zimbabwe.

Initially, BOD and Vast will focus on the MDF. The parties will enter into a separate agreement to pursue the joint development of diamond properties outside of the MDF, for which they will form a 50/50 joint venture (JV).

The companies signed a memorandum of understanding (MOU) to jointly investigate diamond opportunities in Zimbabwe in May this year.

Under an agreement with a community organisation, Vast has access to diamond concessions (Heritage Concession) in the MDF. Covering 15km², the Heritage Concession is adjacent to Vast’s MDF claim.

As part of the deal with Vast, BOD will undertake due diligence on the area before finalising a JV agreement for diamond exploration, mining and marketing.

BOD and Vast will set up a special purpose vehicle (SPV) to undertake development of diamond resources in the MDF. The SPV will be 86.67% owned by Vast, with BOD’s shareholding in the entity set to be around 13.33%.

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Botswana Diamonds chairman John Teeling said: “I am delighted that we have concluded terms with Vast on developing their concessions within the prolific Marange Diamond Fields.

“We look forward to realising the full potential of this prospective area.”

“We look forward to working with them to realise the full potential of this prospective area and others, as they emerge, with Zimbabwe opening up further for business.

“Work on the initial due diligence is far advanced and we look forward to providing further updates to the market in due course.”

Vast will contribute up to $1m in initial funding towards the SPV. The companies will undertake an equity raise to procure any additional funds if required.