Gem Diamonds sells PNG mine to focus on S. Kalimantan mine

London Stock Exchange-listed diamond miner Gem Diamonds Limited said on Monday that it has sold the Woodlark Gold Project in Papua New Guinea (PNG) for US$26.5 million to a company jointly owned by private equity fund Pacific Road Resources and resources financing and investment business RMB Resources Limited, a subsidiary of Rand Merchant Bank.

 

The purchase price will be settled in cash and the effective date is July 1, 2007, the company said in a statement.

 

The Woodlark Gold Project was part of BDI Mining, which was acquired by Gem Diamonds in June 2007 for US$80.1 million. The divestment of the gold asset reduces the effective price of the remaining asset, the Cempaka alluvial diamond mine in Indonesia, to $53.6 million, the company said.

 

Meanwhile, at Cempaka mine located in South Kallimantan the company decided to invest US$16 million to improve mining efficiencies, infrastructure and plant and allow for an increased level of production to 80,000 bcm per month, the company said.

 

“The sale of Woodlark was anticipated at the time of the acquisition of BDI Mining and the price achieved is pleasing. This disposal allows the new management of BDI Mining to focus exclusively on diamond production at Cempaka, in line with Gem Diamonds’ strategy of becoming one of the world’s leading diamond companies”, Gem Diamonds CEO Clifford Elphick said. (denny)