BK11 mine disposal nears completion
Isaac Pinielo | Thursday October 29, 2015 18:00
In 2014, Firestone commenced a disposal process for all its assets in Botswana including the BK11 mine for a total cash consideration of $8 million (P83.9 million).
Early this month, Tango formally requested an extension of time regarding the second tranche of the deposit that was payable in September of $0.3 million (P3.1 million).
Firestone non-executive chairman, Lucio Genovese stated: “We are in discussion with Tango and still anticipate the agreement will be finalised in early 2016 following conclusion of this process, the company will be focused solely on its flagship asset, the Liqhobong Diamond Mine”. Firestone holds a 90 percent stake in the BK11, a low-grade high-value mine, currently under care and maintenance. BK11’s mining licence is currently held by Monak Ventures, whose shareholders include Paul Paledi, Tshekedi Khama, Tim Wilkes and Polite Kutjwe.
Firestone exclusively provides certain technical and financial services and also leases certain mining equipment to Monak Ventures.
Before the closure of the disposal, Tango had also agreed to pay the ongoing cost of BK11’s care and maintenance programme, which runs up to a maximum of $40,000 per month.
When it shutdown the mine in 2012, Firestone retained 15 workers to provide care and maintenance services.
In addition to the BK11 mine, the remaining assets in the Botswana operations sale package include a five-tonne per hour (tph) bulk sampling plant, a 25tph pilot plant; a self-contained diamond recovery grease plant.
As at December 31, 2014, the net assets for the Botswana companies were $10.7 million and for the year ended June 30, 2014, the Botswana companies incurred a loss of $0.7 million before foreign exchange losses on conversion from local currencies.
The BK11 mining licence was granted in July 2010. Approximately 11.5 million tonnes of kimberlite was planned to be mined, resulting in a total production of approximately a million carats over a 10-year mine life. Firestone began mining operations at BK11 in the third quarter of 2010.
In February 2012, BK11 began to experience technical problems in respect to the BK11 Treatment Plant’s ability to successfully liberate diamonds due to the absence of secondary and tertiary crushing circuits.
Firestone de-listed from the Botswana Stock Exchange in 2013, citing operational challenges and weak market demand for the precious stones. The British-company suspended operations at BK11 in 2012, leaving 143 workers jobless.