Botswana Diamonds PLC (LON: BOD) and Vast Resources PLC (LON: VAST) have announced a deal to replace the Heritage concession agreement between the two firms.
Botswana Diamonds PLC is a diamond exploration and project development company that holds exploration licenses in Botswana and South Africa.
Vast Resources is focussed on the rapid transformation from exploration company to mining company and delivering multiple revenue streams.
This will be driven by the advancement of its two primary value drivers, the Baita Plai Polymetallic Mine in Romania, and the Chiadzwa Community Concession in Zimbabwe, into near term production.
As a result of the announcement, both firms saw their shares in red.
Shares of Botswana Diamonds fell 1.7% to trade at 0.81p, whilst Vast Resources slipped 3.52% to 0.32p. 29/11/19 13:43BST.
In October 2018, Botswana Diamonds concluded an agreement with Vast to develop Vast’s Heritage concessions in Zimbabwe’s Marange diamond fields. At that time, it was decided that a separate agreement would be reached covering joint development of diamond properties outside the Marange fields.
After this, Vast entered a joint venture with Chiadzwa Mineral Resources Private Ltd which covered the Chiadzwa Community diamond concession, also located in the Marange fields.
A new company, Katanga Mining Private Ltd (TSE: KAT), was created in order to operate the Chiadzwa joint venture. Katanga is intended to conclude a joint venture agreement with Zimbabwe Consolidated Diamond Co for the exploration and mining of the Chiadzwa concession and the marketing of diamonds from the operation.
The new agreement outlines the formation of a new company which holds the interest of Vast Resources,the Chiadzwa Community joint venture and Katanga.
Additionally, the agreement expresses the intent to issue new shares representing 2.5% of the newly formed company to Botswana Diamonds once the detailed agreement between Katanga and Zimbabwe Consolidated Diamond Co becomes effective.
Botswana Diamonds Chair John Teeling said: “Zimbabwe is opening up to investment. The country is rich in resources and has significant diamond potential. Vast Resources is at an advanced stage in finalising an agreement with the Central Authorities on a package of ground in the Chiadzwa / Marange area. This is a revised package from that on which Botswana Diamonds and Vast Resources had previously agreed to cooperate. In the light of this development, our previous agreement with Vast has been revised on new terms acceptable to the board.
“We look forward to the diamond agreement being concluded and to work starting on what is highly prospective ground. Botswana Diamonds is also studying additional opportunities in Zimbabwe.”
In the mineral and mining sector, there have been updates as firms have been busy. Antofagasta (LON: ANTO) and Hochschild Mining (LON: HOC) have seen their shares in red after their respective announcements.
Firms in the industry such as Thor Mining (LON: THR) Amur Minerals (LON: AMC) who made share placing announcements a fortnight ago, in order to raise funds for new discovery operations.