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Tango Mining’s (CVE:TGV) deal with Firestone Diamonds to acquire Firestone’s BK11 kimberlite diamond mine in Botswana has fallen through.
According to Proactive Investors Vancouver-based Tango was not able to raise the necessary $8 million to fund the acquisition of the mine and processing facility in time. The deal was first announced in March and Firestone last month extended the due date.
Tango had been in talks with California-based lender Vanderbilt Commercial Lending to raise $30 million to buy the operation and provide the capital required to restart BK11.
The BK11 mine is currently under care and maintenance. BK11 is a diamond-bearing, champagne-glass shaped kimberlite pipe with a surface area of 8.7 ha, located in the Orapa/Letlhakane kimberlite district, which was one of the world’s most prolific diamond producing areas.
According to Tango’s October 2015 preliminary economic assessment BK11 was expected to yield about 569 610 carats over a seven year mine life. Gross revenues from the operation was forecast at $188 million with an after‐tax discounted net present value of $40 million for an expected after tax internal rate of return of 43% when using an 8% discount rate.
“Management remains committed to seeking ways of advancing or unlocking shareholder value from its Botswana assets, which the company continues to believe has value,” Firestone said.
Firestone is expected to finish construction of its Liqhobong mine in the kingdom of Lesotho before the end of the year. Liqhobong boasts over 11 million carats in reserve. The total open pit resource contains over 17 million carats down to 393 metres.
