Business
Acquisition
Acquisition.
About this update from Gem Diamonds Limited
[{"type":"text","content":"\n Gem Diamonds Limited\n31 October 2007\n\n\n\n31 October 2007\n\n Acquisition by Gem Diamonds Limited\n of the remaining 50.01% of\n Kabongo Development Company\n\nSummary\n\nGem Diamonds Limited (LSE: GEMD) ('Gem Diamonds' or the 'Company') is pleased to\nannounce today that it has entered into an agreement to acquire the 50.01% of\nKabongo Development Company s.p.r.l ('KDC') from Almesta Holdings Limited \n('Almesta') which it does not already own (the 'Acquisition'). KDC holds all of\nthe concessions on which Gem Diamonds is conducting operations at Mbelenge and\nTshikapa and the majority of the concessions at Lubembe and Longatshimo, all\nlocated in the Kasai Occidental Province of the Democratic Republic of Congo \n('DRC').\n\nAcquisition highlights\n\n• Acquisition consolidates Gem Diamonds' position in the DRC\n\n• Initial consideration will be settled in cash for US$56.2 million\n\n - A deferred payment will be made to Almesta in the event of an\n increase in the valuation of KDC on the first anniversary of the \n Acquisition. The deferred payment will be 50,01% of the increase in \n value of the concession as determined by an independent competent person \n and will be capped at US$56.2 million.\n\n - A further deferred payment is payable to Almesta in the event a \n diamondiferous kimberlite is discovered on a KDC concession which proves \n to be economically exploitable. The deferred payment amount will be 5% of \n Gem Diamonds attributable value and will be capped at US$100 million.\n\n• Acquisition increases Gem Diamonds ownership of the Mbelenge mine and \n Lubembe dredging project to 100%\n\n• Sales and agency agreement entered into with Almesta over DRC and Central \n African Republic production\n\n• Attributable DRC in situ resource of Gem Diamonds increases 53.5% to 9.46 \n million carats\n\n• Gem Diamonds remains confident of its security of tenure over its licenses \n in the DRC\n\n\nCommenting on the Offer, Clifford Elphick, CEO of Gem Diamonds, said:\n\n'The ownership and development of KDC and its concessions has been a key part of\nGem Diamonds' strategy since our first pre-IPO, equity capital raising.\nSecuring controlling ownership of these assets, to complement our existing\noperating role, is a natural and progressive step for Gem Diamonds enabling our\nshareholders to participate more f...