Gem Diamonds has sold its Ghaghoo mine in Botswana for $4 million, after trying to offload the asset for four years. Okwa Diamonds, a company owned by Vast Resources and Botswana Diamonds, has entered into a binding agreement to acquire the deposit, which has been on care and maintenance since March 2017, Gem Diamonds said Monday.

Ghaghoo’s gross assets were valued at $3.5 million as of December 31, 2020, with Gem Diamonds incurring a loss of $3.3 million on the mine last year, the company noted. Okwa Diamonds will assume all of the site’s liabilities as well as acquiring its assets.

“This sale is in line with our strategic objective to dispose of noncore assets,” said Gem Diamonds CEO Clifford Elphick. “

We

remain focused on optimizing production and efficiency at the Letšeng mine in Lesotho.”

The sale to Okwa will complete in the fourth quarter, so long as it meets certain conditions, including obtaining regulatory approval. Those conditions have have presented challenges to the asset’s sale in the past. Gem Diamonds first tried to sell Ghaghoo in August 2017, but those talks fell through. Plans to sell the site to Botswana-based Pro Civil — announced in June 2019 — were nixed after the deal failed to meet some of the conditions, the company noted.

Gem Diamonds opened Ghaghoo in 2014, but put it on care and maintenance after the average price for its rough slid from $210 to $142 per carat between early 2015 and late 2016. However, Botswana Diamonds sees potential in the mine.

“We have completed thorough due diligence on Ghaghoo,” said Botswana Diamonds managing director James Campbell. “We believe there are significant opportunities to improve Ghaghoo’s operating and financial performance through both the application of new, and optimization of existing, technologies, along with a strongly recovering diamond market.”