Tuesday, July 5, 2022

African Diamonds, ex-directors in court

African Diamonds landed in a bitter legal suit Friday as former directors of the company claim that they are entitled to three percent of royalty on production from the AK 6 diamond discovery.

Mark Scowcroft and Leon Daniels gave up their interest in AK6ÔÇöwhen they sold Kukama Mining & Exploration Proprietary Limited in 2002– an area that used to be controlled by De Beers.
“We believe that the claim is without merit, African Diamonds intends to vigorously defend the claim,” the company said on Friday.

The case will be heard in Lobatse where African Diamonds contested its case against De Beers in 2008.

AK6 is 15 kilometers south-east of the Letlhakane VillageÔÇönear the world’s biggest diamond mine of Orapa.

The area boasts of four operational mines being, Damtshaa, Letlhakane, Orapa and BK 11 mine ÔÇô the first three being operated by Debswana Diamond Company while the fourth one is the Firestone flagship.

The resource discovered by a young De Beers geologist, Mark Scowcroft, contains the rare nitrogen free gemstone deposits found in 45- carat Hope diamond in the Smithsonian in New York and Cullinan diamonds which are part of the Crown Jewels.

Recently, African Diamond pleaded with its shareholders to support a “compelling” share swap by Lucara bid aimed at enriching its shareholders.

Under the proposed bid, the value of the transaction will be $ 82 million Canadian (P 528 million) which will see African Diamonds shareholders logging into the Lucara shareholding and at the same time having shares in the regional exploration company.

“The logic of this deal is compelling. Marrying African Diamonds and Lucara will create Canadian $240 million emerging diamond producer controlling 2 new kimberlite diamond mines. The new company, with strong financial backing, will be perfectly poised to exploit an expected gap in diamond supply,” chairman of African Diamonds, John Teeling, said.

Under the proposed deal shareholders will hold an indirect stake in AK6 ÔÇô the 26.57 percent holding in Lucara is close to the stake in AK6 held prior to the De Beers takeout, they get 26.57 percent of the Lucara interest in the high diamond value Mothae mine in Lesotho. Further, he said the current shareholders of African Diamonds will get total control of Botswana Exploration, which will be an AIM/Botswana listed vehicle, holding all of the current African Diamonds exploration interests.

Botswana Exploration, which is a new company, said it is in a good cash standing with exploration opportunities in Botswana and advanced licence applications in Zimbabwe and Cameroon.
The company is expected to apply for listing, both on Botswana Stock Exchange and in London upon the completion of the share swap deal.


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