Firestone Diamonds has signed an agreement for the potential sale of its Botswana operations, which include its interest in the BK11 mine to Amulet Diamond for $5.1m.
Amulet is a Canadian special purpose vehicle formed for the purpose of the acquisition by a group of private investors led by Gareth Penny and Diacore Diamond Group.
Under the conditional option agreement, Amulet will have an option to acquire Firestone's wholly owned subsidiary Firestone Diamonds (Botswana) and its 90% interest in Monak Ventures.
Completion of the acquisition is subject to satisfaction of certain conditions, which include approval from the Botswana Competition Authority, and securing Botswanan ministerial approval for transfer of the controlling interest in Monak to Amulet.
The approvals have to be obtained within 12 months of the date of the option being exercised.
In addition, Amulet will fund the construction and operation of a bulk sample plant and will carry out a bulk sample programme at the BK 11 mine during the option period to further assess the deposit.
During this period, Amulet will also pay the ongoing cost of BK11's care and maintenance programme up to a maximum of $30,000 a month.
Meanwhile, Firestone will retain 10% of the proceeds from diamonds sold from the bulk sampling programme during this period.
With regard to the Botswana companies, Firestone has reported the aggregate net assets as at 30 June 2016 and the aggregate loss for the year ended 30 June 2016 as $4.1m and $2m respectively.
Image: 39 carat light yellow mark markable. Photo: courtesy of Firestone Diamonds.