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TBTT, I have 1105m shares if fully diluted which in addition to your calculation include the 60.5m warrants from 22 Jan 2021 and the 10m options listed in the 2020 annual report. Correct me if I'm wrong.
Tiger, yes that would be my reading of Phase 3 of the Vutomi JV. No timescale is mentioned, so the cash cost and shares would only be distributed if/when BOD are convinced by the drilling / sampling results. Ironically for AIM, it would probably involve a placing that would actually be appreciated by shareholders!!
Tiger you are correct upto 72% on Thorny River.
I was thinking of the XK36 diamond discovery which is excluded from the JV there and remains 100% BOD opened.
Hi Pecten!
Thanks for confirming that.
My guess is that BOD have the right to increase to 72% when they wish, as long as they issue the shares and cash owing to Vutomi. And why bother to do that until you are absolutely certain that you have a major commercial find?
Tiger, BODs current share of the Vutomi JV is definitely 40% - confirmed by JC
Hi Oilman!
I believe Thorny River belongs to the Vutomi JV, but I can't confirm absolutely.
The original Vutomi agreement RNS dates back to 2017. This is from the RNS:
Terms of the Agreement
Pursuant to the terms of the Agreement, Botswana Diamonds has agreed to pay Vutomi a total of £942,000 in cash, of which £581,000 will be used to fund exploration activities. In addition, the Company will issue 100 million ordinary shares of 0.25p each ("Ordinary Shares") to Vutomi shareholders. The Agreement will be executed in three Phases after which the Company will own 72% of Vutomi. The remaining 28% will continue to be held by Vutomi's Black Economic Empowerment ('BEE') partners. The three Phases are summarised below:
Exclusivity and Option Fee
Botswana Diamonds will initially pay Vutomi an exclusivity and option fee of £122,000 within a period of 60 days, with £61,000 being paid in cash and £61,000 being paid in the Company's Ordinary Shares at a price of 1.9p. A further announcement regarding the issue of these Ordinary Shares will be made in due course. Upon completion of this initial 60 day period, Phase 1 of the earn-in will commence.
Phase 1
Phase 1 will last for a further 12 months, during which period the Company will, subject to available funding, have the option to pay Vutomi £215,000 to fund exploration activities to earn an additional 15% of Vutomi. During Phase 1 Vutomi will grant the Company the sole and exclusive right to fund exploration activities in, on and under the Vutomi Prospecting Rights Area in order to prepare a conceptual mining and development plan. The required mining permits are in place.
Phase 2
Phase 2 will last for a further 12 months, during which period the Company will, subject to available funding, have the option to pay Vutomi £366,000 to fund exploration activities to earn an additional 25% of Vutomi.
Phase 3
Phase 3 will commence within 90 days of the successful completion of Phase 2. Pursuant to the Agreement, the Company will have the option to issue the outstanding balance of 96.8m Ordinary Shares, priced at VWAP, to Vutomi and, subject to available funding, settle Vutomi's shareholders loan accounts of approximately £300,000 in cash to earn a further 32% of Vutomi."
There is confirmation in the RNS of 24th Sept 2019 that BOD then owned 40% of the Vutomi JV.
On reflection, as BOD have never issued the 96.8m shares due to Vutomi to move to a 72% share, that is likely where matters stand now. My guess is that if and when BOD are confident they have a commercial find at Thorny River they will go ahead and exercise their option to increase to a 72% share of the JV. (I.e. The decision is in their hands and depends on the drill results).
Since I missed them first time round, I should add the 96.8m shares due to Vutomi to the fully diluted share base, which would now make 782m (current) + 155.2m (warrants) + 96.8m (Vutomi phase 3) = 1034m shares if fully diluted.
Hi Perroverde!
It's 72%, for what it's worth. And, yes, the terms to increase to that percentage are easy (and have probably already been met).
Since this is South Africa, under the new mining charter Botswana Diamonds would need to have a 26% minority BEE shareholder anyway. So it is very convenient that Vutomi qualify for that role.
TBTT as I understand it (but may need to re-read the facts) BOD has the right to buy Vutomi out (or buy a significant majority) based on certain specific revenue targets. The targets are actually not very onerous relative to the typical value of a decent ‘hit’ - i think something like a couple of hundred £k means BOD gets 70%/72% (i need to check the details again but i don’t think I’m far short of the mark). Peanuts in the context of a big strike. Amd don’t forget the importance of the presence of a BEE compliant shareholder, Thorny/Mars is RSA remember!
We should try and get an answer to this question.
The South African assets (including Thorny River) are a joint venture with Vutomi, who James Campbell introduced to BOD on his appointment as CEO.
Vutomi are a qualified Black Economic Empowerment (BEE) shareholder, which solves a lot of problems!
BOD have an earn in agreement on the Vutomi JV, which proceeds in steps from 15% to 40% to a final 72%.
An RNS of 24th Sept 2019 makes it clear that BOD have earnt in 40%. I can't find explicit confirmation that BOD now own 72% of the JV, but I think they must have earnt the right to this share by now.
Is this correct?