ASX-listed Tychean Resources Ltd. has signed a binding agreement to acquire a 74% interest in South African diamond miner Ernest Blom Diamonds CC.
The Australian gold explorer said June 2 that it is acquiring the majority stake in Ernest Blom Diamonds and its subsidiaries Blom Diamond Cutting Works Pty. Ltd. and Mons Montis Diamonds CC.
The group of companies is involved in the trading, beneficiation, cutting and polishing of diamonds.
Tychean will issue an initial 68,450,000 shares on completion of the transaction and a further 1.3 billion performance shares in three stages once certain milestones are met.
The deal is worth about A$8.2 million, based on the May 30 closing price of Tychean shares.
According to Tychean, the acquisition will add a profitable operation to the company's portfolio, providing cash flow to support exploration activities.
The company's exploration projects include the Tanami gold joint venture with Ramelius Resources Ltd. in Australia's Northern Territory. Tychean has a 15% stake in the project.
The Australian market responded positively to news of the acquisition, with shares up 33.3% at 0.8 of an Australian cent at midday Australian Eastern Standard Time on June 2.