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Lucara to Acquire African Diamonds for $80M

Both companies to benefit from AK6.
Oct 4, 2010 5:46 AM   By Deena Taylor
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RAPAPORT... Lucara Diamond Corp has agreed to buy African Diamonds (AFD) for $80.1 million in a deal that will allow both companies to benefit from the AK6 diamond deposit in Botswana.

According to the agreement, shareholders will get 0.80 of a Lucara share and 1 share in a new company, Botswana Exploration Plc, for every 1 share in African Diamonds. African Diamonds will own 26.6 percent of Lucara which will wholly own AK6. Lucara has a 60 percent stake in AK6 and a 75 percent stake in the Mothae Diamond Mine in Lesotho.

"The logic of this deal is compelling," said African Diamonds chairman John Teeling. "Marrying AFD and Lucara will create a CAD $240 million ($234.5 million) emerging diamond producer controlling two new kimberlite diamond mines. The new company, with strong financial backing, will be perfectly poised to exploit an expected gap in diamond supply."

The companies plan to list Botswana Exploration on London's AIM and the Botswana Stock Exchange at the conclusion of the deal.

Botswana Exploration will hold all African Diamonds interests apart from AK6. These include $2.9 million in cash, exploration ground in Botswana, including AK8, AK9 and BK5, advanced stage diamonds license applications in the Marange area of Zimbabwe and license applications in Cameroon.

Tags: Deena Taylor , African Diamonds, Deena Taylor, Lucara Diamond
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