TSX Venture-listed Tango Mining (CVE:TGV) is acquiring a project in an area in Botswana highly prospective for diamonds for the knock-down price of just US$8mln – some US$2.7mln less than its book value.
A past producer, the project is located in the southern African country’s Orapa District, one of the largest diamond producing areas in the world and home to Debswana’s Letlhakane and Damtshaa operations and Karowe, operated by Lucara Diamond Corp.
BK11 is host to a 9.6 hectare kimberlite containing an estimated 29mln tonnes of ore at 44 carats a tonne, or 1.2mln carats in total.
Before being put on care and maintenance in February 2012, more than US$45mln was spent on pit development, a processing plant and infrastructure.
Tango is currently preparing a comprehensive development strategy to reactivate the past producing open pit.
BK11 expands significantly the company’s diamond portfolio, which currently consists of the Oena alluvial deposit in South Africa.
Chairman Terry Tucker told investors: "Our acquisition of the BK11 mine is another major milestone for Tango following its acquisition of the African Star Minerals Group in October of last year.
“The acquisition will build on our existing portfolio of mining properties and mining service contracts in South Africa.
“Together with our Oena Project, our producing alluvial diamond property located in South Africa, the BK11 mine acquisition will ensure Tango's presence as a diamond producer in a region renowned for its ability to maintain low cost and high yield diamond producing mines."
The mining licence was awarded five years ago.
The deal relies on getting government consent and Tango raising the cash needed for the transaction.
The company also owns coal assets in South Africa and a gold deposit in Nicaragua.