Ghaghoo Mine sale hits obstacle
Mbongeni Mguni | Wednesday February 2, 2022 20:08
Okwa Diamonds, owned 10% by Botswana Diamonds (BOD) with the balance held by VAST Resources, announced its plans to take over Ghaghoo last August from Gem Diamonds.
The operation, which was the country’s first underground diamond mine, was placed under care and maintenance in February 2017 due to depressed diamond prices. At least 250 workers had their contracts terminated as a result.
This week, Botswana Diamonds’ directors announced that their partners at VAST had informed the boards of both BOD and Gem Diamonds that they do not intend to proceed with the transaction. No reason for the pullout was provided. Under the original deal, VAST was responsible for funding Okwa with the first $15 million (P173.1 million) of funding required for carrying out due diligence and acquiring Gem Diamonds Botswana, which is Ghaghoo’s operator.
VAST was also responsible for funding to place the mine back into production. BOD directors said alternative potential partners to replace VAST in Okwa had been identified and confirmation had been provided to Gem Diamonds of the commitment to conclude the transaction as soon as possible.
First discovered in 1981, the diamond resource at Ghaghoo was first mined in 2014, with the production of about 92,000 carats in 2015.