Sale of Gem Diamonds Mine Falls Through Again

RAPAPORT... Gem Diamonds' sale of its Ghaghoo mine in Botswana has broken down for the third time in five years.Okwa Diamonds, owned by Vast Resources and Botswana Diamonds, struck a deal with Gem Diamonds last year to purchase the deposit for $4 million. That sale was dependent on Botswana Diamonds securing a funding partner after Vast dropped out, which it failed to do by the May 10 deadline, Gem Diamonds said Wednesday."Botswana Diamonds has not been able to meet this deadline, and the agreement therefore lapsed...in accordance with its terms," the company noted. Gem Diamonds first tried to sell Ghaghoo in August 2017, but those talks fell though. Plans to sell the site to Botswana-based Pro Civil - announced in June 2019 - were nixed after the deal failed to meet some of the conditions, the company noted.The miner opened Ghaghoo in 2014 but put it on care and maintenance after the average price for its rough slid from $210 to $142 per carat between early 2015 and late 2016.Gem Diamonds is still hopeful it can negotiate a new deal with Botswana Diamonds, but it is considering other possibilities for offloading the mine as well."We are considering options for the Ghaghoo diamond mine, which may include reengaging with Botswana Diamonds on substantially the same terms as contained in the agreement in the event [it] is able to successfully conclude funding arrangements," Gem Diamonds added. "We have been reassured by Botswana Diamonds that they remain committed to securing a funding partner and to completing a transaction, and Gem Diamonds will continue to engage with Botswana Diamonds in this regard."Image: The Ghaghoo mine. (Gem Diamonds)