File photo: The statement said the BK11 Kimberlite was one of the most productive mines in Botswanas central diamond-rich Orapa-Lethlakane area.

Gaborone – TSX-listed Tango Mining Limited says it has started procedures towards the acquisition of a US$30-million loan to finalise the acquisition and shortly restart operations at the BK11 Kimberlite Diamond Mine in Orapa, Botswana.

The company, which has mining interests in four thermal coal projects in the Mpumalanga and Kwazulu-Natal provinces of South Africa, started the process of acquiring a 100 percent shareholding at the BK11 Kimberlite Diamond Mine in Botswana from Firestone Diamonds late in 2015.

In a cautionary notice issued to shareholders on Friday, the company said it had entered into a $30-million loan commitment with Canadian capital company Vanderbilt Commercial Lending to finalise the acquisition and to restart operations in the highly lucrative Botswana diamond mine.

“Vanderbilt has issued its Loan Disclosure Agreement to Tango which outlines the general parameters for a USD$30M Loan that will be documented in a final Loan Commitment Agreement. The outstanding principal, plus accrued and unpaid interest are due at the end of the five-year term of the Loan which includes an 18-month pre-paid interest Reserve Fund,” the company said in a statement.

“The fixed interest rate on the Loan will be the greater of 13 percent per annum or 975 basis points above the WSJ Prime Rate during the term of the Loan. The Loan will have a first lien position on the BK11 Mine and Tango’s 51 percent interest in the Kwena Group.”

The statement said the BK11 Kimberlite was one of the most productive mines in Botswana’s central diamond-rich Orapa-Lethlakane area.

According to 2015 production estimates, the mine is expected to produce at least 569 610 carats and earn the company a gross revenue of up to $ 188-million from open-pit mining operations in seven years.

However, the confirmation of the deal remains subject to approval from the Botswana government and the Toronto Stock Exchange (TSX). Further, the deal may fall through if Tango Mining fails to pay a consideration balance of $7.65-million by April 8, 2016.

African News Agency (ANA)