Revised Agreement with Botswana Diamonds plc re Chiadzwa Community Diamond Concession in the Marange Diamond Fields
Vast Resources plc, the AIM listed mining company with operations in Romania and Zimbabwe, is pleased to announce that it has revised its agreement with Botswana Diamonds plc (“BOD”) as a consulting partner in the development of the Chiadzwa Community Diamond Concession in the Marange Diamond Fields of Zimbabwe (“the Agreement”). BOD is a specialist diamond explorer and miner and has developed considerable knowhow on all matters concerned with the exploration and mining of diamonds, the benefit of which will accrue to all shareholders in the Chiadzwa Community Diamond Concession as a consequence of the Agreement.
A summary of the principal terms of the Agreement are:
- A Special Purpose Vehicle (“SPV”) has been created by Vast to hold the interests of the Company in Katanga Mining (pvt) Ltd, the joint venture company for the Chiadzwa Community JV.
- At the time of finalisation by the Company of a detailed agreement between Katanga and ZCDC with no conditions precedent outstanding or earlier if so determined by the Company (‘Finalisation’), BOD will receive 2.5% of the SPV shares so that the shareholdings in the SPV will be BOD 2.5% and Vast 97.5% and the further terms of the Agreement will come into effect.
- BOD will provide to Vast free of charge immediately and for a period of 5 years from Finalisation the benefit of its knowhow (for a minimum of 40 hours per month) as shall be appropriate on all aspects of exploration, mining, processing and marketing in relation to the Chiadzwa Community Diamond Concession.
- Vast will provide all capital requirements for the project commencement on a loan account to SPV up to US$10million.
- If BOD wishes to sell or dispose of its interest in Newco, the New Agreement grants Vast the right (but not the obligation) to acquire BOD’s interest in Newco at fair value.
Andrew Prelea, CEO, commented:
“As a result of the recent agreement with the Chiadzwa Community and pre-agreed joint venture terms on the Chiadzwa Community Diamond Concession in the Marange Diamond Fields, the Company was required to review its current agreement with Botswana Diamonds plc (‘BOD’) and decided that we wished to continue our relationship with BOD as a consulting party that can add significant value to the project.”
Botswana Diamonds (“BOD”), the AIM and BSE listed diamond explorer, is pleased to provide an update on its proposed diamond exploration and development activities in Zimbabwe. BOD and VAST Resources plc (“Vast”) have today agreed the terms of a new agreement in respect of their proposed joint venture in the Chiadzwa / Marange area of Zimbabwe (“New Agreement”).
As previously announced in October 2018, Botswana Diamonds concluded an agreement with Vast for the development of Vast’s Heritage concessions in the Marange Diamond Fields (the “Heritage Concession Agreement”), and that a separate agreement would cover the joint development of diamond properties outside of the Marange Diamond Fields.
Vast subsequently entered into a joint venture agreement with Chiadzwa Mineral Resources (pvt) Ltd, a Zimbabwe company owned by the Chiadzwa Community Development Trust, (the “Chiadzwa Community JV”), in relation to an area of diamond prospectivity known as the Chiadzwa Community Diamond Concession within the Marange Diamond Fields, and established a new company, Katanga Mining (pvt) Ltd (“Katanga”), for the purpose of the operating the Chiadzwa Community JV. Katanga intends to conclude a joint venture agreement with Zimbabwe Consolidated Diamond Company (“ZCDC”) for the purposes of exploring and mining at the Chiadzwa Community Diamond Concession and marketing the diamonds derived from the operation.
Due to these changes in the area likely to be licenced by Vast Resources, BOD and Vast have today entered into the New Agreement which replaces the Heritage Concession Agreement.
The principal terms of the new agreement are as follows:
· A new company (“Newco”) has been formed to hold the interests of Vast in the Chiadzwa Community JV and Katanga.
· When the detailed agreement between Katanga and ZCDC becomes effective, Botswana Diamonds will be issued with new shares representing 2.5% of Newco.
· In consideration for the issue of the Newco shares, BOD has agreed to provide for 5 years its management know-how at no charge (with a minimum of 40 hours per month) to Vast and Newco for exploration, mining, processing and marketing in relation to the Chiadzwa Community Diamond Concession.
· Vast will provide all capital requirements for the project commencement on a loan account to Newco, up to a maximum of US$10m.
If BOD wishes to sell or dispose of its interest in Newco, the New Agreement grants Vast the right (but not the obligation) to acquire BOD’s interest in Newco at fair value.
John Teeling, chairman, commented, “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.”
This release has been approved by James Campbell, Managing Director of Botswana Diamonds plc, a qualified geologist (Pr.Sci.Nat), a Fellow of the Southern African Institute of Mining and Metallurgy, a Fellow of the Institute of Materials, Metals and Mining (UK) and with over 33-years’ experience in the diamond sector.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014. The person who arranged for the release of this announcement on behalf of the Company was James Campbell, Director
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