(IDEX Online) - Botswana Diamonds has acquired the 50% share previously held by Alrosa in their Sunland joint venture and now holds 100% of the equity in Sunland Minerals.
The company's 100% ownership allows for a new investor to enter as a new joint venture partner, the miner said, adding that advanced negotiations are underway with potential partner.
Work could begin in the first half 2019 focusing on targets identified in 2018.
"A potential new investor, itself a large diamond producer with new ideas and keen to find new kimberlites in Botswana, is close to acquiring 50% of Sunland. Naturally, such new investment into Sunland could not be formalized until Botswana Diamonds took title to the Sunland shares. This is now done.
The company anticipates the new partner stepping into the exploration shoes of Alrosa and, once the deal is finalized, work could begin in the first half of 2019 focusing on targets which have already been identified. The new partner has a strong exploration team in place.
"Changes took place at board / top management level in Alrosa in 2016 and 2017. This caused a change in emphasis. Early stage exploration joint ventures lost priority, as corporate strategy changed direction towards production and marketing. Accordingly, operatorship of the Sunland JV transferred to Botswana Diamonds in early 2018 as previously announced. Subsequently Alrosa did not contribute additional funds to 2018 exploration. Given the exploration potential already identified in the Gope region of the Kalahari, Botswana Diamonds conducted focused work to protect the licenses. In accordance with the new central policy, Alrosa transferred its interest in the Sunland JV to Botswana Diamonds, and assisted the company in the search for new partners."
"The Sunland JV was established in 2014 to test existing Alrosa exploration technology on Botswana Diamonds' large data base. The logic being that new technology and new approaches to exploration could identify new targets - ideally large diamond-bearing kimberlites under the Kalahari sands. Unfortunately grassroots exploration is a slow process requiring painstaking evaluation, refinement and selection of targets. This was ongoing in the joint venture, and progress has been made. The work done by Botswana Diamonds' geologists in 2018 built on pioneering work by Alrosa before the operatorship was transferred to the company," Botswana Diamonds commented.
Botswana Diamonds Chairman John Teeling said, "Alrosa has been an excellent partner over the past four years. They brought a fresh approach and new technology to exploration in the Kalahari. The work done by Sunland was and is of a high standard. We had no instant success, you rarely do in exploration, but progress had been made toward the target of a commercial discovery. For reasons unconnected with this acreage, new Alrosa management prioritized marketing over early stage exploration. This happened before, in a previous company, with the Karowe discovery. We successfully replaced a partner, which then developed the Karowe mine. I believe energy is more important than scale in driving innovative exploration.
"Although no guarantees can be given at this stage, we are at an advanced stage of discussions with a significant diamond producer who has in place an experienced exploration team. If talks are finalized I would hope that some of the targets on Sunland ground in the Kalahari, identified in 2018, will be drilled in 2019. I look forward to providing our shareholders with further updates regarding the new partner in due course."