ANTWERP (Business Day) -- Gem Diamonds [AIM:GEMD] continued on its acquisition trail with its takeover announced yesterday of the Gope diamond deposit in Botswana from De Beers and Xstrata [LSE:XTA] for $34 million.
Having built a war chest by raising $850m on the London Stock Exchange and through a private placing, the company is now pressing ahead with an aggressive growth plan aimed at taking on the big groups: De Beers, Alrosa, Rio Tinto [NYSE:RTP] and BHP Billiton [NYSE:BHP].
The reason for De Beers' disposal of Gope has not been disclosed, but the fact that the mine lies in what has been referred to in government circles as "the dreaded area" - the Central Kalahari Game Reserve - may have partly motivated the sale.
De Beers said the mine was too small to fit its business plan. That probably also goes for Xstrata, which through Falconbridge has a 50% stake in Gope.
Gem CEO Clifford Elphick said: "We will have to update the feasibility study as well as the environmental study, and then if the mine is economic, as we expect it to be, apply for a mining licence.
"That will entail negotiating with the government in the first instance, but also with all stakeholders, including local communities and the wildlife authorities.
"This is not new and unexpected and is entirely normal for all modern mining operations, wherever they may be. We have already begun this process," he said.
However, the case could be complicated and misrepresented, Elphick warned. "No doubt it will be complicated but I am encouraged to see all stakeholders are on record as supporting diamond mining in the Central Kalahari Game Reserve providing there are appropriate agreements in place."
