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Petra concludes KEM JV sale

Petra Diamonds (LSE:PDL) has completed the sale of its majority interest in the Kimberley Ekapa Mining joint venture (KEM JV) to its partner Ekapa Mining for R300 million (US$21.8 million).
Petra concludes KEM JV sale Petra concludes KEM JV sale Petra concludes KEM JV sale Petra concludes KEM JV sale Petra concludes KEM JV sale

Petra Diamonds has disposed of its stake in the Kimberley underground diamond mine

Staff reporter

The sale, first announced in July, includes the Kimberley underground diamond mine, extensive tailings retreatment programmes and the high-volume central treatment plant in South Africa's Kimberley region.

In purchasing the 75.9% stake from Petra (58.1%) and its black economic empowerment partners, Ekapa agreed to take over all financial, employee, environmental, health, safety and social obligations related to the KEM JV operation.

The deal had previously involved Ekapa paying the R300 million over 24 months starting in January, although this had been changed to R60 million over a two-year period starting in April.

It was agreed the balance would be repaid from a 50% share in future cash flows, including proceeds from the sale of assets, potential proceeds from a pending insurance claim related to the mud-rush incident at Bultfontein, and adjusted for sustaining capital of R110-130 million per annum, for a period of five years to end-June 2024.

Petra CEO Johan Dippenaar said the sale was in line with the company's strategic priorities and the ongoing review of its portfolio to "maximise return on capital and ensure that all assets are in a position to contribute positive cash flow to the business."

It will continue to focus on its core Finsch, Cullinan and Koffiefontein operations in South Africa and the Williamson mine in Tanzania.

The reclassification of KEM JV as a discontinued operation meant Petra recorded an attributable loss on discontinued operations of US$104.3 million in its 2017-18 financial year results.

Petra's shares barely moved Wednesday, edging up 0.87% to 41.74p (US53.34c).