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Petra Diamonds selling Kimberley JV interest for 300M rand

Petra Diamonds Ltd. agreed to dispose of its 75.9% interest in the Kimberley joint venture operation in South Africa to partner Ekapa Mining (Pty) Ltd. for 300 million South African rand. The deal also includes the tailings treatment operations.

Consideration is payable in 24 monthly installments starting in January 2019, according to the July 5 release.

The company said the deal will increase its working capital position, decrease wider operational risk and enable it to focus on its key assets, primarily Finsch and Cullinan.

The 75.9% interest comprises 55.47% held by the company itself and 20.43% held by its black economic empowerment partners, with the disposal to be made on a going concern basis.

In May, Petra Diamonds announced an ongoing review of its portfolio in a bid to maximize returns and ensure all assets are cash-flow positive, as well as a rights issue targeting up to US$178 million.

The company expects the Kimberley deal to effectively complete in the current quarter, subject to various conditions, with a noncash impairment charge in the range of US$35 million to US$45 million anticipated in its preliminary results for the fiscal year ended June 30.