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Petra Buys 'Kimberley Underground' From De Beers For $11M
Sep 16, 2007 4:37 AM
By Avi Krawitz
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RAPAPORT... Petra Diamonds Limited agreed to buy the Kimberley Underground Mines from De Beers Consolidated Mines for ZAR 78.5 million ($10.9 million,) the companies announced September 14, 2007. The acquisition is conditional upon regulatory approvals in South Africa.
The sale includes the Wesselton, Du Toitspan, and Bultfontein mines, which make up the underground working parts of the Kimberley Mines and “not all of De Beers Kimberley Mines,” De Beers spokesperson Tom Tweedy stressed in an email.
“The Kimberley Mines continue as an integral part of the De Beers portfolio, producing 1,944,899 carats of the 14,568,861 carats produced by De Beers in South Africa in 2006,” Tweedy noted.
The agreement gives Petra a 74 percent stake in Kimberley Underground, and the miner's Black Economic Empowerment (BEE) partner Sedibeng Mining (Pty) Ltd holds the remaining 26 percent. Under the agreement, De Beers has guaranteed the full environmental rehabilitation liability of the mine at a cost of ZAR 63.5 million ($8.9 million,) while Petra will pay the remaining amount of ZAR 15 million ($2.1 million) in cash.
Based upon historical figures Petra expects sales from the mines to reach in excess of 100,000 carats per year at an average $160 per carat once full production recommences.
De Beers closed the Kimberley Underground operation in 2005 and made its divestment strategy in this property public in February 2007 as part of a plan to sell-off some underperforming properties.
Petra bought Koffiefontein mine from De Beers in November 2006 and is reported to be bidding for the Cullinan Mine which De Beers has put on tender as part of the strategic review.
Petra, meanwhile, said it expects the Kimberley Underground mine to have a remaining life of “at least 12 years.”
“Alongside Petra’s highly prospective Angolan exploration assets the acquisition of Kimberley Underground is an important addition to Petra’s substantial base of producing assets in South Africa,” said Adonis Pouroulis, chairman of Petra.
Pouroulis added that Petra’s South African assets – including its Kimberley Underground, Koffiefontein and fissure mines -- will contribute a combined annual production of around 400,000 carats in two years.
Mining at kimberley Underground can only commence once Petra receives mining rights and associated approvals from the South African Department of Minerals and Energy.
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Tags:
De Beers, Petra Diamonds, Production, South Africa
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