Namakwa Diamonds has sold all mining and exploration operations in Congo to a company led by its management team. This sale in the Democratic Republic of Congo is part of a major restructuring exercise.
The Hall Farm Avenue Ltd bought the Congo operations for US $6.25 million. The company is headed by James Tregenza who also happens to be the country manager for the Democratic Republic of Congo. The payments will be made in installments of $1.25 million annually over a period of five years.
Namakwa Diamonds is also to give Hall Farm Avenue working capital worth $300,000 which is to be repaid on demand. They will also retain rights to sell the Congo operations as an agent for 15% royalty fee which comes down to 3% after the acquisition consideration is repaid.
Richard Collocott, the chief executive officer of Namakwa Diamonds, said the company's trading and beneficiation division will continue to work with James and his team going forward to market diamonds sourced from the acquired asset base.
Mr Collocott added that the move was in the best interests of shareholders following a difficult operating period in the second half of 2011 and challenges to the tenure of part of the company's asset base in the DRC.