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Petra, Ekapa Buy De Beers Last Kimberley Mine for $7.2M
Dec 1, 2015 7:30 AM
By Rapaport News
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RAPAPORT... UK miner Petra Diamonds Ltd and South Africa’s Ekapa Mining
have bought the Kimberley Mines from De Beers for $7.2
million (ZAR 102 million), acquiring assets in an area famously known as the
heart of the African nation’s early diamond rush of the 1860s.
Ekapa Minerals, a special acquisition vehicle in which Petra
owns a 49.9 percent stake and Ekapa Mining the rest, has purchased a “number”
of the so-called tailings dumps located at Kimberley in the Northern Cape
Province of South Africa from De Beers Consolidated Mines Proprietary Ltd (DBCM), Petra said in a
statement December 1.
The “dumps” have a potential to produce 2.8 million carats, with a
further possibility of treating other deposits that contain an estimated 4.4
million carats. The mines are expected to generate about 700,000 carats per annum
in the first three years, which translates into a revenue of about $65 million in
12 months with calculations based on an approximate price of $95 per carat.
Kimberley Exit
De Beers sold the Kimberley Underground Mines to Petra for $10.9
million in 2007. The latest sale marks the mining giant’s exit from Kimberley.
“The most compelling aspect of
this transaction is the extension of the mining and processing of Kimberley's
tailings mineral resources far into the future,” Jahn Hohne, the chief
executive officer (CEO) of Ekapa Mining, said in the statement.
The mineral resources at Kimberley contain about 11 carats per hundred tonnes for the first three years of
operations following the deal, tapering to an estimated 6 carats per hundred
tonnes after this period. The mines will
probably be cashflow positive in the first year of business activity subsequent
to the sale, with Ekapa Minerals financing the total initial working capital of
about $14 million.
A treatment plant, which has a capacity of 6
million tonnes per year and is capable of processing a range of ore sources, and
all other assets and liabilities of the Kimberley Mines are also a part of the sale. The operations of Ekapa Minerals – a consortium
vehicle controlled by historically disadvantaged South Africans – will mainly be in the hands of Ekapa Mining, according to the
statement.
“Ekapa Minerals will be operated and managed by the
people of Kimberley and to the benefit of the area,” Hohne said.
DBCM chairman Barend Petersen said in a separate statement: "Throughout this process, our objective has been to sustain operations, protect jobs and grow empowered participation in South Africa’s diamond industry. A rigorous, independently advised process enabled De Beers to select a consortium with not only the right mining and financial credentials, but also a commitment to meet future social and labor plans, and environmental obligations."
The sale followed a competitive process that attracted more than 70 expressions of interest, De Beers added.
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Tags:
De Beers, Kimberley mines, mining, Petra Diamonds, Rapaport News, South Africa, tailings
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