Wednesday, May 16, 2007

Steinmetz Group Buys Controlling Stake in Koidu

Energem Resources has sold its 40 percent interest in Koidu Holdings Limited to Beny Steinmetz’ BSG Resources for $18.25 million in cash. Koidu owns and operates the Koidu kimberlite diamond mine and the Tongo Fields exploration area in Sierra Leone.

The sale gives Steinmetz a controlling 65 percent stake in Koidu; BSG Resources already holds a 25 percent interest in the company. Magma Diamond Resources Limited holds the remaining 35 percent.

Energem said that one of the reasons for to selling its interest was “a fair price” offer, representing a $6 million premium over its $12 million investment since the recommencement of operations in 2003.

The firm also noted a needed additional investment of $45 million for underground development. And while Energem wants to focus on its core business in oil and gas, it further noted “the encumbrance of a five-year exclusive marketing agreement with Steinmetz Diamonds, a party related to the other [Koidu] shareholders.”

Link to News Room - Full Article