Firestone Diamonds plc announced that it has entered into a “conditional agreement” with Tango Mining Limited for the disposal of its Botswana operations for a total consideration of US$ 8.0 million in cash.

Stuart Brown, Chief Executive Officer of Firestone commented: "The disposal of the Botswana operations, including the BK11 mine, enables us to focus solely on our flagship asset, the Liqhobong Diamond Mine, in the Kingdom of Lesotho, where we will commence production during Q4 2016."

The Agreement envisages that Tango Mining will acquire Firestone's wholly owned subsidiary Firestone Diamonds Botswana (PTY) Ltd and its 90 per cent interest in Monak Ventures (PTY) Ltd, which holds Firestone's interests in Botswana. Firestone Diamonds said in a press note that out of the agreed amount, Tango Mining will pay the Company  US$ 0.35 million immediately; US$ 0.30 million will be placed in escrow as a deposit by no later than 30th  September 2015; and the remainder will be paid  on completion of the sale.

There are four conditions which the Completion of the sale is dependent upon and which have to be met within six months of the date of the Agreement (the Drop Dead Date). These are, as outlined by the Company:  

·       Tango Mining raising the balance of the consideration, being US$ 7.35 million;

·       The parties gaining approval from the Botswana Competition Authority;

·       The parties obtaining Botswanan ministerial approval for the transfer of the       controlling interest in Monak; and

·       Tango Mining receiving the requisite approvals by the TSX Venture Exchange in         respect of the Disposal.

Under the terms of the Agreement, “Tango Mining has also agreed to pay into escrow the ongoing cost of BK11's care and maintenance programme from the date of the Agreement up to the earlier of the date of completion of the Disposal and the Drop Dead Date, up to a maximum of US$ 40,000 per month,” the Company clarified.  

Firestone Diamonds also noted that if the conditions of the Agreement are not satisfied or waived by the Drop Dead Date and an extension is not agreed between the Company and Tango Mining, the Disposal will not be complete. “In the event that the Disposal does not complete and the Company has fulfilled its obligations under the Agreement and the relevant regulatory consents and approvals have been obtained, the monies held in escrow, being the Deposit and the care and maintenance costs, will be released to Firestone,” the Company stated.