Shares in Petra Diamonds (LON:PDL) sparkled as the company and its partner bought De Beers’ oldest working diamond mine for US$7.2mln.
Petra and Ekapa Mining will pay around US$3.6mln each for the Kimberley mines in South Africa. Shares in Petra rose 11.9% to 71.8p.
The Kimberley operations produced 720,000 carats of diamonds last year and are expected to produce 700,000cts over the next three years, with annual revenue of US$65mln.
Petra will take a 49.9% stake while Ekapa, which will run the site, will own the rest.
Johan Dippenaar, chief executive of Petra, said: “We are delighted to have formed this consortium with Ekapa Mining in the acquisition of an interest in the Kimberley Mines, and we look forward to working with them to build upon their proven capabilities in tailing re-treatment operations in Kimberley, as well as their strong local relationships.”
It follows a pattern for Petra, which has bought up other De Beers spin-offs including the Finsch, Koffiefontein and Cullinan projects.
It was seen as the most logical outcome, after De Beers, which has had control of the site for 127 years, said in May that the Kimberley operations were up for sale.
Broker SP Angel said: “The impact of this acquisition is not expected to come through until 2017 but should then start providing a small additional revenue stream.”
It follows yesterday’s news that lenders had agreed to waive some of its debt covenants, to help the company expand programs at both the Cullinan and Finsch sites.