Emu Nickel (ASX:EMU) has belied its name and acquired an operating diamond tailings operation that was owned by De Beers Consolidated Mines Limited.
The operation currently produced up to 15,000 carats per month and is cash flow positive.
The average tender price of ~US$100/carat was received for the product during 2012.
The diamonds recovered range from industrial type diamonds through to gem quality diamonds.
Emu Nickel, together with a subsidiary of Batla Minerals SA, an entity listed on the NYSE Euronext in Paris have jointly offered to acquire Superkolong Proprietary Limited (SK) through a special purpose vehicle company.
SK is a 30.4% shareholder in the South African company Kimberley Miners Forum Proprietary Limited (KMF). KMF has purchased various coarse, diamondiferous, kimberlite tailings dumps located around the town of Kimberley in South Africa from De Beers.
The purchase price payable by SPV to the SK Vendors is in the amount of ZAR135M (50% by Emu and 50% by El Nino) payable in four payments due as to R40M on 1 March 2013, R25M on 1 September 2013, R35M on 1 March 2014 and R35M on 1 September 2014.
Based on current operational parameters, funding for the payments due on 1 September 2013, 1 March 2014 and 1 September 2014 to the SK Vendors will be met from the SK cash flow.
The transaction between SPV and the SK Vendors is subject to a number of conditions.
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