(Alliance News) - Petra Diamonds Ltd on Wednesday said it has agreed to sell its entire stake in Williamson Diamonds Ltd to Pink Diamonds Investments Ltd for up to USD16 million.
Shares in Petra Diamonds climbed 13% to 29.52 pence in London on Wednesday morning.
The South Africa and Tanzania-focused diamond miner said the consideration is payable by Pink Diamonds from Williamson Diamonds' distributable cash.
It said 20% of distributable cash generated annually is payable to Petra until the consideration is fully paid.
Petra said there can be no certainty that any or all of the deferred consideration will be paid to it.
The company expects completion in the first quarter of 2025, subject to regulatory and lender approvals, including from the Tanzanian Mining Commission and the Tanzanian Fair Competition Commission.
Petra said any net proceeds from the deal will be used for general corporate purposes.
It said it has decided that it is in the best interests of Petra, as well as Williamson Diamonds and its stakeholders, for it to come under consolidated ownership.
Petra Diamonds Chief Executive Richard Duffy said: "We believe that Pink Diamonds, who are affiliated to Taifa, the long-term technical services contractor at the Williamson Mine, will have the technical and financial capability to conduct operations in a responsible manner for all stakeholders. We look forward to working closely with the Mining Commission, the Fair Competition Commission, employees, community representatives and other key stakeholders in completing the sale as soon as possible."
By Michael Hennessey, Alliance News reporter
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