[miningmx.com] — PETRA Diamonds said it had completed buying the Kimberley Underground diamond mine from De Beers Consolidated Mines (DBCM), some two-and-a-half years after the companies agreed to the transaction.
“The transaction has taken longer than originally anticipated to complete due to
complexities related to the new order mining right, which have now been completely
resolved,” Petra said in a statement.
The purchase consideration of R78.5m has been settled by Petra assuming De Beers’ rehabilitation obligations with regards to Kimberley Underground of R63.5m and the payment in cash by Petra to De Beers of R15m.
Kimberley Underground comprises Bultfontein, Dutoitspan and Wesselton, three
historic diamond mines which were at the heart of the diamond rush in the Kimberley
region of South Africa in the late 1800s.
Petra has been operating Kimberley Underground under care and maintenance since September 2007, during which time it has built up substantial ore stockpiles totalling approximately 500,000 tonnes estimated to contain 90,000 carats.
Processing and diamond recoveries will now commence.
Kimberley Underground is expected to produce 100,000 carats in the financial year
to June 2011, rising to 180,000 carats per year thereafter following commissioning of a second production plant by June 2011.
Petra said all the capital expenditure required for the rehabilitation of the underground operations and the construction of the new plant at joint shaft has
already been spent and capitalised.
The operation is therefore expected to be profitable and cash generative from
“We have been looking forward to commencing diamond recoveries at these mines
for some time and are expecting strong operating results,” said Petra CEO, Johan Dippenaar.
“The substantial additional output of high value diamonds will significantly add to
group revenues and further assist Petra towards its goal to more than treble group
production by 2019,” he said.