Last checked at (Sharecast News) - Mining company Vast Resources has agreed to acquire Gem Diamonds Botswana, which owns the Ghaghoo diamond mine, through a joint venture with Botswana Diamonds.
Vast Resources said the acquisition will provide it with a 90% interest in "a high quality and previously producing diamond asset", benefiting from "world-class infrastructure" and being capable of generating "material revenues" in the near term.
The AIM-listed firm stated the acquisition of GDB was conditional on the procurement of a bank guarantee in favour of Gem Diamonds and was expected to complete during the latter part of 2021.
Five days after fulfilment of conditions, Vast will part with 50% of Gem Diamonds' $4.0m price tag, with a further 50% to be paid on 23 December.
Vast added that it did not intend to provide funding from new equity raisings and highlighted that it was currently engaged with third-party financiers to support the development of Ghaghoo into production.
Chief executive Andrew Prelea said: "The proposed acquisition of the Ghaghoo Mine in Botswana is a highly compelling opportunity for Vast to deliver diamond production in a relatively short period, benefitting from a fully equipped mine that has $250.0m of investment, infrastructure and a significant resource of quality gems that include large stones and fancy colours.
"Importantly Ghaghoo is substantially de-risked both from an exploration and development perspective, and also from the funding structure that we are advancing with third party financiers."
As of 1030 BST, Vast shares were up 1.59% at 7.11p.
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