Koidu discussing possible IPO: CEO

Thu Mar 8, 2012 5:12pm GMT
 

By Simon Akam

FREETOWN (Reuters) - Sierra Leonean diamond miner Koidu Holdings is studying a possible flotation and aims to reach a previously stated target of quadrupling its output to 45,000 carats a month in July.

"There is significant benefit in having access to capital markets ... Discussions are taking place," Chief Executive Jan Joubert told Reuters in an interview on Thursday.

Joubert said a $200 million expansion of its existing facility would push output from a current 10,000 carats a month to 35,000 in May and to 45,000 carats in July.

Koidu is privately owned by billionaire Israeli diamond trader Beny Steinmetz's BSG Resources through its Octea diamond unit. The proceeds from any IPO would go towards developing the separate Tongo diamond concession south of the Koidu project.

Joubert gave no further details. Steinmetz, who now acts as adviser to the BSGR board, was quoted by the Financial Times last month as saying there was a "good possibility" of a Hong Kong flotation in the second half of this year. The paper said the aim was to raise $400m-$600 million and achieve a valuation of $2-3 billion.

"The assets that we have are in our opinion high value," Joubert said. "The two kimberlite pipes and the dykes that you see in Koidu produce some of the world's highest quality diamonds," he said of two geological formations in which diamonds can be found

Kimberlite mining is a process that involves excavating far down into the ground. Other miners in the West African country, whose gemstones gained notoriety during its civil war in the 1990s as 'blood diamonds,' use alluvial techniques.

Alluvial mining is much less expensive, and involves searching for gems that have been spread into the upper layers of the earth when kimberlite formations erode.   Continued...

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.2544
Euro USD =1.0855
Rand USD =0.0769