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Boteti Joint Venture

Summary:  

• Boteti Joint Venture formed 2004. The AK6 discovery was in October 2004
• Share 49/51. AFD/DB changing to 30/70 on completion of the first Bankable Feasibility Study (BFS)
• De Beers pay 100% of all costs until bankable feasibility, thereafter each side pays its way
• All diamond production contracted to the Diamond Trading Company (DTC)
• Mines with annual revenue of less than $70m will be operated by African Diamonds who will receive 70% of the gross profit.  Diamonds still go to the DTC  

African Diamonds (AIM: AFD) and De Beers have signed an agreement to establish a joint venture company to explore for, and if successful, develop new diamond mines in Botswana. Ownership of the joint venture will initially be 49% African Diamonds and 51% De Beers with De Beers funding the joint venture through to Bankable Feasibility Study. De Beers' shareholding will rise to 70% upon completion of the first bankable feasibility study. The size of any mine resulting from the joint venture will decide whether it is managed by De Beers or African Diamonds with larger mines operated by De Beers and those below an agreed threshold operated by African Diamonds, who will receive a preferential profit share in those operations of Newco.

The first Bankable Feasibility Study was submitted along with a Mining Licence application for AK6 in September 2007. This application was submitted on behalf of the Boteti Joint Venture whose shareholding in Debot is 66.215%, African Diamonds 28.381% and Debwat 5.404%. Prior to the application for the Mining Licence, all the exploration properties were moved into Atlas Minerals Botswana Pty Ltd, which has now been subsequently sold to African Diamonds for a nominal sum. The Mining Licence for AK6 was awarded to Boteti in October 2008.