International precious gem producer Vast Resources and African miner Botswana Diamonds have announced they will team up with private company Red Mercury to explore the Marange diamond fields in the Chiadzwa region of Zimbabwe.
International precious gem producer Vast Resources (LSE:VAST) and African miner Botswana Diamonds (LSE:BOD) have announced they will team up with private company Red Mercury to explore the Marange diamond fields in the Chiadzwa region of Zimbabwe.
The agreement, which was penned earlier this week, will give Vast exclusive access to exploration, mining and marketing of the 15 km² heritage concession. The area is in close proximity to Vast’s own historic Marange diamond project, and is believed to be part of the same geological system.
“The concession area has not been mined before and by virtue of its geographical positioning within the Marange diamond fields it is anticipated to contain economically viable diamondiferous alluvials as well as conglomerate ore resources,” Mark Mabhudhu, director of Vast, said in the press release.
Despite Vast already working in the area, the deal would not have been possible without Red Mercury. The private company is owned by the Marange-Zimunya Community Share Ownership Trust (MZ Community Trust). Registered under the laws of Zimbabwe, Red Mercury received a special undertaking from the government of Zimbabwe for a license to mine on the heritage concession.
As part of the joint venture, Red Mercury will be responsible for providing the full mining license, while Vast will be responsible for exploration and future production.
While Vast will be the official miner at the Marange project, Botswana Diamonds played a role in helping the international diamond miner pinpoint the location for the project.
Earlier this year, both companies entered into a memorandum of understanding related to the exchange of data from past explorations in areas that have potential for viable diamond production.
“I am delighted that Vast has been awarded this exclusive access to part of the famous Marange diamond fields and we look forward to working with them to realize the full potential of this area and others as they begin to emerge with Zimbabwe opening for business,” John Teeling, chairman of Botswana, noted in his company’s announcement.
Vast has been operational in Zimbabwe since 2005, and it’s been extremely successful mining gold in the African nation. Aside from exploring the newly acquired historical concession, Vast is currently having an independent reassessment of historic claims.
“Shareholders will be aware that we have long held an historic diamond interest in Zimbabwe,” Andrew Prelea, chief executive at Vast, pointed out.
“Whilst we await further developments on our historic claims, we are delighted to be strengthening our operating presence in the area and building on our relations in-country through this agreement with Red Mercury, which we believe paves the way for future growth.”
Vast Resource shares were up 8.41 percent on Thursday (August 23) to GBX 0.65. Meanwhile, Botswana Diamonds stock surged 15.79 percent the same day, closing at GBX 1.10.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.