SouthernEra and De Beers sign deal
Simon Barber
Washington - De Beers is to take control of the disputed pipe on Marsfontein farm in Northern Province, ending a bitter fight with Toronto - SouthernEra Resources.
SouthernEra had been about to start mining at the site when 29 heirs emerged unexpectedly last December, registered their rights and optioned them to De Beers,
Under an agreement announced on Monday, Minerals and Energy Mininster Penuell Maduna will be spared having to rule on SouthernEra's application that the heirs and De Beers be expropriated under section 24 of the minerals act in the public interest.
De Beers is to get a 60% interest in M1 and will manage the project. SouthernEra will take the remaining 40% after buying out partner Randgold Exploration. De Beers will pay the heirs NGS Resources, about R75m.
SouthernEra is to retain control of its larger Klipspringer project nearby and Marsfontein ore will be processed at the company's recently completed treatment plant in Modderfontein. De Beers CSO will buy M1 and Klipspringer output.
Previously, SouthernEra president Chris Jennings insisted he would not sell through De Beers, saying it would mean taking a 25% discount on prices SUF could obtain elsewhere.
A joint statement by all four companies involved said the agreement would enhance and strengthen the stability of the world market for diamonds, as well as provide SouthernEra with the benefits of an assured and reliable market.
SouthernEra had been counting on the M1 pipe, which is small but contains a very high grade of easily mined ore, to finance operations at Klipspringer and the expansion of its holdings at Camafuca, a potentially massive pipe in Lunda Norte province of Angola. In a teleconference with investors and analysts on Monday, Jennings sad the deal with De Beers should give us funds to do additional work in Angola and get at more of the Camafuca pipe which we believe is going to be a real winner. |
