Botswana Diamonds (BOD) , together with associate Vutomi, announced on Tuesday that it had signed a mining contract and processing agreement with Eurafrican Diamond Corporation “EDC” to address a portion of the Marsfontein farm.
A long-term premier diamond miner and processor, EDC is currently mining the Schuller kimberlite pipe and diamond-bearing gravels around Petra’s Cullinan Diamond Mine.
The agreement gives EDC a contract to target identified deposits at the mining permit - essentially, to mine and process the diamond-bearing gravels and residual stockpiles at the site.
Under the contract, Vutomi, of which Botswana owns a 40% interest in, will receive 25% of the pre-tax revenue from larger or high value “special stones,'' meaning any stone weighing 10.8 carats or more, or those valued at more than $8,000 per carat, as well as 15% from the standard “run of mine” stones.
Commenting on the signed contract, John Teeling, Chairman of Botswana Diamonds, said that "partnering with Eurafrican Diamond Corporation paves the way for commercial production to restart on Marsfontein and Thorny River.
EDC has a rich history of successful diamond mining and processing and has excellent technical and financial support. Furthermore, EDC and Vutomi projects complement one another, providing a strong project pipeline".
Shares in Botswana Diamonds increased to over 10% following the news.
Most notably, EDC receives its technical support from Baxter Brown, a figure whose academic papers helped shape geology -- significantly, he also discovered the Baken and Oena Diamond Mines in South Africa as well as helping discover the Argyle Diamond Mine in Australia.
The contract mining and processing agreement allows for the continued contractual bulk sampling on the Thorny River project, as well as first refusal rights, between EDC and Vutomi, on all their South African diamond exploration and development projects.
As announced on 12th September 2019, the Environmental Authorisation has already been granted for the Marsfontein project.
The company further explained that they anticipate the remaining regulatory grants shortly.
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