Boteti has today signed a Heads of Agreement setting out the terms and conditions for the granting, by the Government of Botswana, of a mining licence for the AK06 deposit.
The terms and conditions of the Heads of Agreement are that:
- The license will be issued with effect from 10 October 2008 for 15 years up to 9 October 2023;
- Production will commence within 30 months of 10 October i.e. from 9 April 2011;
- All of Boteti’s production will be sold through Diamond Trading Company Botswana;
- Government has undertaken that power will be supplied from the national grid. In the event of any need for the mine to generate additional power, Government undertakes to waive the Road Levy on imported diesel fuel until 2013;
- Government will not take equity in the project;
- The tax rates applicable to the project will be the variable income tax rate specified in the Twelfth Schedule of the Botswana Income Tax Act plus the normal royalty specified in the Botswana Mines and Minerals Act
Developing the mine will entail a two phase process requiring a total investment of approximately Pula 2.76 billion by Boteti over the period 2009 to 2014.
The mine will produce an estimated 600 000 carats per annum in the first 3 years increasing to 880 000 carats per annum over the remainder of the life of the mine (7 years).
This equates to approximately 8.1 million carats by the end of the 10 year life of mine with an average dollar per carat to Boteti of approximately US$ 138 per carat.
The employment levels at Boteti too will vary depending on the stage in the project life. For instance, during phase 1 of construction, up to 850 people will be employed.
The figure will reduce to 274 permanent employees during the operational stage of the same phase.
For the people of Botswana, this represents significant employment and business opportunities.
For Botswana the mine will reaffirm the country’s position as an industry leader and the diamond industry as the bread basket from which vital national income is derived.
Speaking on the latest developments, the Chairman of the Company, Tony Guthrie, said “We are excited about this new development, and I would like to thank the Government of Botswana and the joint negotiating team of Boteti who have worked tirelessly to ensure that all matters pertaining to the license were concluded in time and satisfactorily. The directors of Boteti will continue to do everything under their control to ensure that the full economic value of this deposit is realized for the benefit of the shareholders and Botswana”.
* Kindly note that this announcement does not constitute reporting of exploration results, mineral resources or mineral reserves and is not specifically compliant with the South African code for the reporting of exploration results, mineral resources and mineral reserves (the SAMREC code) or with any other compliance standards applicable in other relevant regulatory jurisdictions.