Tychean Resources has agreed to buy a 74 per cent stake in South African-based diamond company, Blom Diamonds.
Adelaide-based Tychean described the acquisition as culmination of “significant efforts in securing a cornerstone project” that will transform the company “into a vertically integrated diamond-focussed company.”
Blom Diamonds, which comprises Blom Diamond Cutting Works and Ernest Blom Diamonds, engages in the trading beneficiation, cutting and polishing of diamonds. Tychean believes the acquisition will distinguish it from the host of competitor exploration companies.
“Consequently, Tychean will have the necessary experience to combine the full value chain of diamond exploration, production, trading, beneficiation, cutting and polishing, in turn creating a vertically integrated investment vehicle,” the company said in an ASX announcement.
“Tychean notes that the value add by cutting and polishing company-produced diamonds would be in the vicinity of 20 to 30 per cent.”
The deal involves the issue of 68.45 million Tychean shares to Blom, and is also dependent on several performance milestones over the next three years.
Tychean’s other assets include a 15 per cent stake in the Tanami gold project in the Northern Territory.