Tango’s attention will be centered on the Oena diamond mine in South Africa, which has proven lucrative for the junior miner.
South Africa-focused Tango Mining (TSXV:TGV) has announced it plans to sell off its stake in several metallurgical coal projects in order to focus solely on diamond extraction.
Moving forward, the company’s attention will be centered on the Oena diamond mine in South Africa, which has proven lucrative for the miner.
During the latest production period, 531.82 carats of gems were recovered from Oena. The 230 diamonds sold for an average price of US$1,382 per carat.
Included in the diamond tender were three large finds, a 19.87 carat diamond that went for US$4,358 per carat, a 49.6 carat stone that sold for US$2,561 per carat and a 24.97 carat diamond that brought in US$1,101 per carat.
With favorable results, it is easy to see why the company would want to move away from coal and towards building its business model around diamonds, a sector that is expected to encounter supply issues in the coming years as old diamond mines begin to close around the world.
Tango will sell its 74 percent stake in the Kwena Group, which consists of the following coal operations: Kwena Mining Projects, Kwena Mining and Metallurgical Services and Kwena Springlake Projects.
The assets will go to Kevin Gallagher. Gallagher is a director at the company and will acquire the Kwena package in what has been dubbed a “related party transaction” requiring shareholder approval.
On his end, Gallagher will return almost 40 million common shares of Tango priced at C$0.05 each, totaling C$1,999,508.
“After cancellation of the shares, Kevin Gallagher will not hold any securities of the company, other than stock options,” notes a Tango press release.
Outstanding debts of C$723,000 owed by Tango and its subsidiaries to the Kwena Group will be forgiven. An informal valuation performed on the Kwena Group assets placed their worth at C$2.3 million.
In addition to a renewed focus on diamonds, Tango will change its name to Southstone Minerals. Both the sale and the name change are subject to TSXV approval.
Tango shares are down 33.19 percent year-to-date and are currently trading at C$0.10.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.