www.afdiamonds.com
African Diamonds was established to develop diamond mines in Botswana and West Africa. The target is to have a producing mine within three years. Having a balanced portfolio of projects will help reach the objective. The current portfolio of the Company consists of:
JV in Botswana with Lucara to fast track the development of our licences to our goal of large gem stone quality diamond mine;
late stage exploration projects which are known to contain diamonds or diamond indicator minerals; and
early stage high potential concessions, both alluvial and hardrock.
African Diamonds recommends Lucara takeover offer
African Diamonds (LON:AFD) has recommended a takeover offer from Lucara Diamonds Corp (TSX-V:LUC) which values the company at C$82 million, approximately £51 million.
The deal effectively sees Lucara buying AFD’s stake in the AK6 diamond deposit. In return AFD shareholders will receive a 26.57% stake in the Canadian company.
"The logic of this deal is compelling,” AFD chairman John Teeling said.
Lucara is a well-funded Diamond mining company, and an associate of the Lundin Group (TSX:LUN). The company’s primary asset is a 75% stake in the Mothae Diamond Mine in Lesotho.
AFD and Lucara are currently joint venture partners in the AK6 diamond development project, after Lucara bought De Beers' stake in the project earlier this year. AFD owns 40% of AK6, as well as a portfolio of exploration projects in Botswana.
The exploration assets will be spun-out into a new AIM-listed company, which will be called Botswana Exploration.
Under the terms of the deal AFD shareholders will receive 0.8 Lucara shares and 1 Botswana Exploration shares for each share held.
“Marrying AFD and Lucara will create a C$240 million emerging diamond producer controlling two new kimberlite diamond mines”, Teeling said.
“AFD shareholders win in three ways, they will hold an indirect stake in AK6 ... they get 26.57% of the Lucara interest in the high diamond value Mothae mine ... and they will get 100% of Botswana Exploration.”
On completion Botswana Exploration will join AIM and the Botswana Stock Exchange.
AFD values the Botswana Exploration assets at 7p per share.
With the backing of Lundin, Lucara will push ahead with the development of both the AK6 and Mothae diamond mines.
“The new company, with strong financial backing, will be perfectly poised to exploit an expected gap in diamond supply.”
“The track record of the Lundin Group, the backers of Lucara, in building shareholder value is outstanding.”
“The objective of the Lundin Group is to use Lucara to build a mid tier diamond producer. The board of AFD endorse and support this strategy.”
AFD shareholders will vote on the proposal at a meeting on 31 October, 75% of the voting rights are required to approve the deal.
