Botswana Diamonds announces satisfaction of conditions precedent for Sekaka Diamonds acquisition
Botswana Diamonds announced that all the Conditions Precedent for the acquisition of Sekaka Diamonds have now been satisfied. Sekaka's Prospecting License which holds the KX36 high-grade kimberlite pipe has also been extended for a further two years to 30th September 2022.
The transaction has been approved by Petra's lenders and noteholders as well as by the Botswana Minister of Mineral Resources, Green Technology and Energy Security.
Sekaka was Petra's exploration vehicle in Botswana and holds three Prospecting Licenses in the Central Kalahari Game Reserve ("Kalahari") in Botswana, PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe. The acquisition also includes an extensive database, built up over 15 years of exploration.
KX36 is a 3.5Ha kimberlite pipe, discovered by Sekaka, in the Kalahari. The kimberlite is situated approximately 70 km from Gem Diamonds' Ghaghoo Mine, and 260 km north-west of Botswana's capital Gaborone. Sekaka has undertaken extensive exploration work on KX36, including extensive core and Large Diameter Drilling ('LDD'). There is a historic SAMREC compliant Indicated Resource of 17.9 million tonnes at 35 cpht, and an Inferred Resource of 6.7 million tonnes at 36 cpht, estimated for the pipe by Z-Star in 2016.
As Sekaka owns 100% of KX36, gross and net resources are the same. Sekaka is the operator of KX36. BOD has not independently verified the historic resource estimate. Modelling these grade estimates suggests overall grades of between 57 cpht and 76 cpht. The estimated diamond value from the LDD is $65/ct, with an upside range of between $97/ct and $107/ct, all assuming a +1.15mm Bottom Cut-Off ('BCOS') or +3 DTC diamond sieve.
Sekaka also holds a recently constructed, fit-for-purpose bulk sampling plant on site. The sampling plant includes crushing, scrubbing, dense media separation circuits and x-ray recovery modules within a secured area.
Sekaka's extensive diamond exploration database contains the results of work undertaken since 2005. The data include data in respect of airborne (including the Falcon survey) and ground magnetics (including gravity and Electromagnetics), in addition to heavy mineral sampling. BOD believes that the information contained in the database will provide substantial support to its future kimberlite exploration activities in Botswana. The first deferred consideration cash payment of $150,000 will be payable on or about 20th November 2021, being the first anniversary of completion of the acquisition.
John Teeling, Chairman, Sekaka Diamonds: "We are grateful to the Botswana Authorities for the quick approval of our acquisition of the KX36 discovery, the extension of the licence and the award of two surrounding licences. We are convinced that a review and reworking of the existing database on KX36 will identify areas where the grade and volume can be improved. We have significant work done on this and are ready to go when exploration restrictions are lifted. Kimberlite pipes, like KX36, are rarely if ever found on their own. It is of major importance that we got two adjacent licences where we are now very hopeful to find other kimberlites. The Kalahari Desert is a tough environment but finding something as rare as KX36 containing an estimated indicated resource of 17.9m tons at 35cpht is very rare. The potential far outweighs the challenge."
