DBCM to Sell Kimberley Underground Mines to Petra

De Beers Consolidated Mines (DBCM) will sell its Kimberley underground mines to Petra Diamonds for R78.5 million ($10.96 million), the sides announced. Petra will operate the mines with its BEE joint venture partner, Sedibeng Mining.

According to the agreement, Petra will acquire the mining and associated assets of the Wesselton, Du Toitspan and Bultfontein mines, which together form the Kimberley Underground mines.

It will run the mines on “a care and maintenance basis” on behalf of DBCM until the required mining authorizations are granted.

Petra expects annual sales from the mine to exceed 100,000 carats at an average of $160 per carat once full production is recommenced, generating a gross annual revenue of about $16 million. It estimates that the mine will have an economic life of at least 12 years.

In February, De Beers announced it was seeking offers for its underground mines as well as selected tailing mineral resources in and around Kimberley, and for Cullinan Diamond Mine.

“The proposed sales form part of DBCM’s drive to position itself for future growth by focusing its resources on those mines that fit the company’s strategy to ensure sustainable growth for DBCM beyond 2014. DBCM remains on track to finalize the remaining transactions by the end of this year,” the company said in a release.