Petra Diamonds will sell its remaining stake in the Williamson deposit in Tanzania for $16 million as market weakness has required the miner to invest large amounts of capital in the site.
The move follows the miner’s 2023 sale of just under 50% of the site to Pink Diamonds Investments, a company affiliated with the deposit’s technical services contractor, Taifa Mining. The current deal calls for Pink Diamonds to take on the remainder of the stock in Williamson Diamonds Limited (WDL), a joint venture between Petra and the Tanzanian government that owns and operates the deposit, as well as all loans the company currently owes Petra, the miner said Wednesday.
The $16 million Pink Diamonds owes will be paid out of WDL’s distributable cash at a rate of 20% annually until the full amount is paid, Petra explained. However, the company noted that “there can be no certainty that any or all of this deferred consideration will be paid to Petra.”
The deal is expected to be completed during the first quarter of fiscal 2025. Petra decided to sell its remaining shares in the mine — which has resources and reserves of approximately 37.17 million carats of diamonds — due to its continued need for further influxes of cash amid the continued market slowdown.
“WDL continues to encounter short-term liquidity challenges and going forward, the Williamson mine will continue to require further capital investment,” the company said. “Following Petra’s strategic review of its cost structure and…faced with the prevailing market weakness, Petra determined that the disposal business would be unable to compete with the continuing group for further capital investment, especially given the existing capital requirements.”
Image: Trucks hauling ore at the Williamson mine. (Petra Diamonds)