Ghaghoo Mine sale flops
Mbongeni Mguni | Thursday May 12, 2022 10:50
Ghaghoo, 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.
Okwa Diamonds, an entity owned 10% by Botswana Diamonds with the balance held by VAST Resources, had announced its plans to take over Ghaghoo last August from Gem Diamonds. However, in February, 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.
Under the original deal, VAST was responsible for funding Okwa with the first $15 million (P184 million) of funding required for carrying out due diligence and acquiring Gem Diamonds Botswana, which is Ghaghoo’s operator. VAST was also to be responsible for funding to place the mine back into production.
This week, BOD directors said despite “intensive and advanced” ongoing discussions with interested parties, no agreement had been secured for a new joint venture partner.
As a result, the share sale agreement with Gem Diamonds had lapsed.
The directors said they had indicated their willingness to re-engage on substantially the same terms as the agreement if BOD and a new partner can finalise an agreement.