Botswana Diamonds (LON:BOD) said on Wednesday it had exercised pre-emptive right to acquire the outstanding third-party interests in its South African unit and parts of the Thorny River project, which gives the company control of the asset.
The company will issue 56.99 million shares, valued at about £627,000 (about $844,000), as purchase consideration for the third-party interests in Vutomi Mining, its South African associate that holds the mineral rights for Thorny, and Razorbill Properties 12.
“We are very positive on the production opportunities for the Thorny River properties owned by Vutomi,” chairperson John Teeling said in the statement. “An outside company made an offer for Vutomi. Rather than accept the offer, we exercised our pre-emptive right to acquire the outstanding shares (…) We acted to preserve shareholder value.”
On completion of the acquisition, Botswana Diamonds intends to sell 26% of Vutomi for a deferred consideration of $316,333 to the company’s local South African empowerment partner, Baroville Trade and Investments 02.
“Since working on Thorny River 30 years ago, we recognized potential for discoveries on a kimberlite system spanning 20km. Recent drilling vindicated this view and indicates potential for additional nearby discoveries,” managing director James Campbell said.
The Thorny River project is in South Africa’s northern Limpopo province and the volume of its main deposit has been modelled at between 1.2 and 2 million tonnes.