Stellar Diamonds seeks to fund first post-Ebola mine in Sierra Leone

File Photo: A trader holds a four carat diamond worth about  US$8,000 in the town of Koidu in eastern Sierra Leone.

A trader holds a four carat diamond worth about US$8,000 in the town of Koidu in eastern Sierra Leone, file. REUTERS/Finbarr O’Reilly /File Photo

Stellar Diamonds, a London-listed small-cap, is seeking funding for a $45 million diamond project in Sierra Leone it says will be the first major mining project since the Ebola crisis rocked the country’s economy.

Diamonds and other forms of mining are central to an economy hard hit by the 2015 Ebola epidemic.

Trade in diamonds helped to fuel the decade-long conflict that ended in 2002, but since the lifting of a ban on exports in 2003 and strict international rules, the industry says Sierra Leone’s exceptionally high quality diamonds have become a force for good.

“This is the first large-scale mining licence to be issued by the government since Ebola, creating up to 1,000 jobs,” Stellar CEO Karl Smithson said in an interview.

Initially, Stellar Diamonds planned to buy the diamond prospect through a reverse takeover to acquire acreage from private firm Octea, which already operates Koidu, the biggest diamond mine in Sierra Leone and West Africa. The new project Tongo-Tonguma will be the region’s second biggest, Smithson said.

In an environment in which small players can struggle to raise cash following the 2015-16 commodity crash, Smithson abandoned the reverse takeover plan in favour of a revenue-sharing deal.

That means Stellar will pay a 9.3 percent gross royalty to Octea, which continues to own the Tonguma prospect, while Stellar keeps the adjacent Tongo acreage and operates both.

Between them, Tongo-Tonguma should produce 200,000 carats per year over the 21-year mine life and generate gross revenue of $45 million annually.

For a small-cap, the advantage of the deal is it gets rid of the need to raise all the money upfront and means work can begin quickly – Smithson hopes next year.

To provide working capital, meanwhile, the company this week announced a share issue and an open offer to minority shareholders to raise roughly 500,000 pounds ($676,700).

Its share price, which was suspended for half a year while the reverse takeover was considered, has fallen more than 50 percent this year.

Stellar Diamonds expects to raise cash from a deal agreed earlier this year to sell its assets in Guinea to BDG Capital Limited, although Smithson said the final price would be less than the $2 million figure initially announced.

BSG Resources (BSGR) said it could not comment as the Octea deal was still being finalised.

The group was founded by Israeli billionaire Beny Steinmetz, who is now an advisor and not involved in daily business.

($1 = 0.7389 pounds)

Originally reported by Reuters.

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Botswana’s Wilderness Safaris to bid for Air Botswana

Botswana’s largest tourism company, Wilderness Safaris, plans to make a bid for Air Botswana, the country’s loss-making national airline which the government wants to privatise.

Botswana put the airline up for sale in February, part of plans to privatise loss-making state-owned companies. The transport department said at the time it would consider full bids for Air Botswana, as well as joint ventures, ownership, franchising and concessions.

In March, Transport Minister Kitso Mokaila said at least 17 companies had expressed interest in Air Botswana, but he did not name them.

Wilderness Safaris said it planned to make a bid when it published its full-year results last week.

The company, which is also listed in Johannesburg, operates 50 luxury resorts across eight African countries and Wilderness Air operates 35 small aircrafts in Botswana, Zimbabwe, Zambia and Namibia mainly catering to tourists.

Botswana, whose main source of wealth is diamonds, has more than 30 state-owned enterprises, most of them loss making, in industries ranging from tourism and power to housing and finance.

Air Botswana operates four domestic routes and also provides cargo and air passenger services to Cape Town and Johannesburg from Gaborone, Francistown and the tourism hubs of Maun and Kasane.

The airline’s losses, blamed on a large workforce and an aging fleet, prompted a turnaround plan that includes cutting costs and cancelling unprofitable routes.

Originally reported by Reuters.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advice and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all investment matters ensures advice based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessment of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and un-knowledgeable investment advice can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

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