Shares rose in Botswana Diamonds Ltd on Monday after its associate Vutomi Mining Pty Ltd was granted a mining permit for the diamond bearing gravels and residual unprocessed stockpiles around the Marsfontein diamond mine in Limpopo, South Africa.
Shares the diamond explorer were 24% higher at 1.36 pence on Monday morning in London.
In September, Vutomi signed a mining and processing agreement with Eurafrican Diamond Corp.
Under the agreement, Eurafrican will mine and process identified deposits on the Marsfontein mining permit with 25% of revenue from larger or high value “special stones” and 15% from standard “run of mine” stones accruing to Vutomi.
Eurafrican has commenced site establishment and commissioning is expected to start in the next two weeks, with production ramping-up once commissioning is completed.
Cash flows from Marsfontein will go towards funding other exploration work in Botswana and South Africa.
“I am delighted that the Marsfontein mining permit has been granted and that site establishment has already commenced. I look forward to updating shareholders as the company progresses towards being a diamond producer,” said Chair John Teeling.