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Kimberley Diamonds Ltd (KDL) has announced that its Botswana unit, Lerala Diamond Mines Limited, has signed an offtake agreement for mined materials produced from its site in the country.

The length of this agreement is six months, from September 2016 to February 2017.

In late-September, Lerala Diamond Mines Limited conducted a tender of its diamonds, which was operated by DDA Trading BVBA in Antwerp.

DDA Trading BVBA is an exclusive marketing agent of Lerala.

"The buyer has agreed to acquire all mined diamonds produced at the Lerala Diamond Mine until 28 February 2017."

Following tender, the winning bidder made an offer to sign an offtake agreement for all diamonds during this six-month period.

The buyer has agreed to acquire all mined diamonds produced by Lerala at its Lerala Diamond Mine until 28 February 2017. It would pay prices consistent with KDL and Lerala expectations and recent forecasts.

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KDL and Lerala note this short-term offtake agreement reflects demand and interest in the market for produced diamonds, and supports management’s views of quality of the product, as well as the longer term feasibility of the Lerala Diamond Mine.

DDA Trading BVBA will continue to hold discussions with a number of parties in relation to offtake of Lerala production after February 2017.