Petra Diamonds has agreed to promote its Botswanan exploration property to Botswana Diamonds for $300,000 and a 5% royalty on future revenues, the diamond miner, which is within the technique of restructuring, mentioned on Monday.
The acquisition value shall be payable in two equal instalments on or earlier than August 31, 2021 and August 31, 2022, Petra mentioned. Botswana Diamonds has the choice to purchase out the royalty for $2 million in money.
Petra’s fully-owned subsidiary Sekaka Diamonds Exploration (Pty) Restricted, which Botswana Diamonds would take over, holds three prospecting licences.
Petra, which has been planning to promote Sekaka since June 2018, mentioned the deal is separate to the gross sales course of introduced final month as a part of its restructuring.
“The primary tranche of the acquisition consideration isn’t anticipated to be acquired till August 2021, making the sale too long-dated to assist with Petra’s instant money movement challenges,” mentioned BMO analyst Edward Sterck.
The sale nonetheless requires approval from the Botswana Competitors Fee, ministerial consent in Botswana, and approval from Petra’s lenders and debtholders.