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RAPAPORT... Tawana Resources sold its interest in the Kareevlei diamond project in South Africa and the Flinders Island diamond project in Australia for about $384,000 (AUD 430,000) as the explorer divested from the diamond business to focus on core mining assets.
Diamond Resources Pty. Ltd., a subsidiary of Tawana Resources in South Africa, entered into an option agreement with BlueRock Diamonds on April 23 and a supplementary agreement on August 3, giving BlueRock Diamonds the option to purchase Kareevlei's mining rights and equipment for $384,000 (ZAR 4 million). BlueRock Diamonds agreed to pay Tawana $288,000 (ZAR 3 million) within 10 business days of successful admission to London's Alternative Investment Market (AIM), taking ownership of all project-related equipment and infrastructure, including landholder, security, insurance and lease payments.
BlueRock has the right to conduct trial mining on contractor basis by way of bulk sampling while the rights are transferred. Meanwhile, Tawana is entitled to a 1 percent royalty on gross revenue after payment of government royalty on all sales of diamonds recovered during this period. Once mining rights are transferred, BlueRock Diamonds will pay about $96,000 (ZAR 1 million) to Tawana and close the deal.
Tawana sold its 80 percent stake in the Flinders Island diamond project to Kalyan Resources Pty. Ltd. for $1 plus a 2.5 percent gross revenue royalty in the event of discovery and commercial production of diamonds.
Len Kolff, the managing director of Tawana Resources, said, “With the disposal of these assets, the company will streamline its portfolio of assets while reducing overhead and providing additional working capital. The company further wishes the purchasers of its diamond interests every success in their future endeavors.”
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