Gem Diamonds in talks with Cempaka potential buyers

LSE-listed Gem Diamonds has signed confidentiality agreements with eight potential buyers of its Cempaka mine in Indonesia, which it put up for sale in May, miningweekly.com reported on Thursday.

The alluvial mine has been under care-and-maintenance since January 2009, when the economic crisis drove diamond prices into the ground.

?This [the sale] has been an ongoing process, with initial discussions with prospective buyers having taken place back in June,? Gem general manager Jeff Leaver said in response to emailed questions on Wednesday.

?We?ve entered into confidentiality agreements with eight parties and are still in discussions with most of them.?

The London-based diamond miner bought its 80% stake in Cempaka through the $78-million purchase of Aim-traded BDI Mining in May 2007.

According to an advertisement regarding the sale of the mine, the mine has a total resource of 2.6-million carats, and also contains $160-million in gold and platinum. The planned grade is 2.1 ct/one-hundred tons.

In May, Gem said it had determined a net present value of $14.2-million for Cempaka, which produced 27 900 ct in seven months of production in 2008.(*)