Gem Diamonds sells Ghaghoo diamond mine

Gem Diamonds announced it has sold all of its share capital in Gem Diamonds Botswana Proprietary Limited (GDB) to Pro Civil, a company registered in Botswana.

GDB's chief is the Ghaghoo diamond mine in Botswana which has been on care and maintenance since March 2017, and which is wholly owned by GDB. GDB reported a loss of US$ 4.9 million in 2018. Its assets were valued at US$ 3.9 million.

Under the share sale agreement, Pro Civil will make a once-off upfront payment of US$5.4m for the share capital of GDB.  Gem Diamonds reported that it will use the sale proceeds for general corporate purposes. Pro Civil will assume the environmental liability currently associated with GDB.

Subject to regulatory approvals within Botswana, the transaction is expected to be completed in the third quarter of 2019. The Government of Botswana has been consulted throughout the process and is fully conversant with the relevant details of the transaction.

"This sale is in line with our strategic objective to dispose of non-core assets.  Gem Diamonds remains focused on optimizing production and efficiency at the Letseng mine in Lesotho. On behalf of Gem, we wish the Pro Civil team well for the future, and I would also like to thank the Government of Botswana for its assistance during the sale process," Clifford Elphick, Chief Executive Officer of Gem Diamonds, said in a statement.

Gem Diamonds is a global diamond producer of high value diamonds. The Company owns 70 percent of the Letseng mine in Lesotho. The Letseng mine is famous for the production of large, top color, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.