Deadline for BK11 Mine sale extended again
Staff Writer | Wednesday August 31, 2016 15:35
In a statement released yesterday, Firestone said Tango Mining now has until the revised date of September 9, 2016 to settle all the conditions under the Conditional Sale Agreement (CSA).
Firestone said the agreement to extend the due date allows Tango to finalise its proposed $30-million loan commitment with California-based financial lender Vanderbilt Commercial to finance the acquisition of the operations and provide the capital to restart the mothballed BK11 kimberlite diamond operations.
“All other material terms of the amended CSA remain the same and, accordingly, if the conditions of the CSA are not satisfied or waived by the revised drop dead date, the disposal will not complete,” the Lesotho-based diamond development company said in an update to shareholders.
An October amendment of the initial July agreement allowed an extension of the deadline from September 30, 2015, to April 8, 2016, which had been extended thereafter to August 29, by which time Tango was required to raise the $7.65-million balance it still owed, in addition to the ongoing, cumulative care-and-maintenance programme costs at the Botswana operations.
The BK11 mine is a diamond-bearing, champagne glass-shaped kimberlite pipe with a surface area of 8.7 hectares. The pipe is located in the Orapa/Letlhakane kimberlite district, which is one of the world’s most prolific diamond producing areas.
Production from the seven years of open-pit mining is forecast to yield approximately 569,610 recovered carats with the aggregate life of mine gross revenues from the BK11 mine being $188 million and an expected post tax discounted net present value of $40 million.
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 demand for the precious stones.
The British-company suspended operations at BK11 in 2012, leaving 143 workers jobless.