Vancouver co in $30m deal to restart Botswana diamond mine
Tango Mining (CVE:TGV) has announced a deal with California-based lender Vanderbilt Commercial Lending for a US$30 million loan commitment to fund the acquisition and provide the capital required to restart the BK11 kimberlite diamond mine in Botswana.
Southern Africa-focused Tango says the BK11 mine was a diamond-bearing, champagne-glass shaped kimberlite pipe with a surface area of 8.7 ha, located in the Orapa/Letlhakane kimberlite district, which was one of the world’s most prolific diamond producing areas.
According to Tango's October 2015 preliminary economic assessment BK11 was expected to yield about 569 610 carats over a seven year mine life. Gross revenues from the operation was forecast at $188 million with an after‐tax discounted net present value of $40 million for an expected after tax internal rate of return of 43% when using an 8% discount rate.
Vancouver-based Tango also announced that it had entered into an agreement with Botswana's Firestone to acquire Firestone’s right in the processing facility, and interest and title in the mineral rights comprising the BK11 mine for $8 million. The deal is subject to Tango paying the balance of the consideration of $7.65 million to Firestone by April 8 and funding ongoing maintenance at BK11.
Tango also announced the sale of its past-producing Oena diamond project in the Northern Cape province of South Africa last week.
Tango's operating business is the 51%-owned Kwena Group which has four thermal coal, metallurgical and processing plant and engineering contracts that process 6.5 Mt per annum for clients in South Africa. The Vanderbilt will have a first lien position on the BK11 Mine and on Tango's interest in the Kwena Group.