Rockwell Diamonds has completed negotiations with its black economic-empowerment (BEE) partner, Africa Vanguard Resources (AVR) that will see it taking over the firm’s Jasper Mine.
The Jasper Mine property was contiguous to Rockwell's Saxendrift Mine and had the potential to extend the life of the later with limited new investment, it said.
The company said it had entered into an arrangement with AVR, to permit it to purchase a 26 percent interest in the company under the Black Economic Empowerment (BEE) legislative provisions.
“Management at Rockwell has been in recent ongoing discussions with AVR regarding the replacement of the vendor funding provided by Rockwell to AVR relating to the acquisition by AVR of 26 percent of HC Van Wyk Diamond Group and Saxendrift Mine in 2008, the Rockwell subsidiaries which hold the Company's Northern Cape operations and projects,” it said in a statement.
As part of the agreements, AVR paid an amount of $2.9 million with the balance of $7.9 million still being owed to Rockwell.
The restructured agreement included a payment to AVR by Rockwell of $1.9 million, in the form of shares listed on the JSE.
The completion of these transactions is subject to various conditions precedent, including the completion by Rockwell of a due diligence investigation, regulatory approvals and obtaining approval from the Department of Mining Resources with respect to certain parts of the transaction.
The deal also presented Rockwell with the opportunity to enter into a new BEE partnership that aligned well with the company’s aims, while retaining AVR as a shareholder.
"This is another step in our journey to create an intermediate value driven diamond business. Our ongoing engagement with several potential BEE partners who share our vision and strategic objectives give us confidence that we will be able to forge a partnership that will add value to our business going forward," said Rockwell chief executive James Campbell.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
