Market watchers say an expected introduction price of 7p (71 thebe) a share puts Botswana Diamonds at just over £7m with no new money being raised.
African Diamonds Plc (AFD) de-listed from the BSE at the close of business on December 22, 2010 following a successful acquisition by Lucara Diamonds Corporation. BSE officials however say African Diamonds had not yet communicated their intention to list on the bourse. “They have not notified us yet, I guess [if] they have communicated with the bourse they will have a primary listing. They are only going to have a secondary listing here,” said a BSE official.
TSX Venture Exchange-quoted Lucara Diamond Corp offered 0.8 of one of its shares plus one share in Botswana Diamonds for each African Diamonds share at the end of 2010. That valued African Diamonds at just over £51m, including the £7m accounted for by Botswana Diamonds. Botswana Diamonds holds exploration licences in Botswana, a 35.42 percent stake in a company with exploration interests in the Democratic Republic of Congo, a small shareholding in AIM-quoted Stellar Diamonds and around $2m in cash. There are plans to invest in Zimbabwe and Cameroon. The listing is part of Lucara Diamond’s agreement to takeover African Diamonds (AFD) and FinCap has been nominated adviser and broker.
Under the deal, Lucara gained full control of Botswana’s AK6 mine, while Botswana Diamonds was set up to hold all of AFD’s other assets. In addition, AFD shareholders will gain a 26.57 stake in Lucara. “I am pleased that the shareholders have resoundingly voted in support of the sale of African Diamonds to Lucara,” Teeling said.
Meanwhile, Lucara announced this week that the AK6 diamond development project will be in full production by early 2012 and is expected to yield 400, 000 carats of high-quality rough diamonds in its first year. The company announced this week that the execution of the diamond mine project is on target and on budget with commissioning scheduled to start in the fourth quarter of 2011. In a statement, William Lamb, president and CEO of Lucara said the fact that the AK6 project would start production by year-end is “an exciting development in the evolution of Lucara as a mid-tier producer of high quality diamonds”.
“This year will be a challenging but rewarding one for all involved with the AK6 project,” Lamb added. He said that the earthworks contractor has re-mobilised to site after the holiday break and activities are ramping up in support of the civils programme, which is scheduled to commence by the end of January. Off-site, the upgrade of the mine access road is progressing well.
“The bulk power-line contract is out to tender and the contract is scheduled to be awarded in March such that grid power will be available in July in time for early commissioning tasks. “Recruitment of key operational staff is underway; negotiations are being completed with the mining operations contractor; and requests for tender for the plant operations contract will be issued mid-January,” read the statement from Lucara. The company added that engineering, at 40 percent complete, continues to progress in support of the major contract awards and the construction schedule.