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De Beers sells stake in Gope Exploration Co.

May 29, 2007

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London—De Beers has announced the sale of its 50 percent stake in Gope Exploration Co. Ltd. to Gem Diamonds Limited. De Beers' joint-venture partner in the Botswana-based exploration company was Falconbridge, which has also sold its 50 percent share.

In a media release, De Beers said Gope has not been active in prospecting or exploring on the ground in Botswana since 2003. The company said the move reaffirms its long-held position that the Gope deposit did not meet De Beers' scale criteria necessary for development.

The move is another step in De Beers' drive to focus on assets that best position it for future growth. This follows recent announcements on the planned sale of Cullinan mine and parts of the Kimberley operations in South Africa, as well as the sale of the De Beers' 42.2 percent interest in the Fort a la Corne prospecting joint venture in Canada.

In a media statement from Gem Diamonds, the company said it acquired the shares from De Beers and Falconbridge for $34 million.

Gem Diamonds said the deposit at Gope represents a significant ore body. A sampling of 3,400 carats recovered was recently valued at $121 per carat, a rate the company said is strategically attractive.

The company will begin work shortly on the existing feasibility study, completed in 1998. This will include a revised environmental-impact assessment and environmental-management plan. If the findings produce positive results, the company will apply for a mining license. As part of that process, the company would negotiate with the government of Botswana as to its equity participation in the potential mine, and also consult with the relevant communities and other stakeholders.

"The acquisition of Gope fits our strategy of growing our portfolio of assets that have known but underdeveloped kimberlites, and where our management team, which has extensive experience in Botswana, can add value," Gem Diamonds Chief Executive Officer Clifford Elphick said in a statement. "Gem Diamonds recognizes the imperative of finding a sustainable resolution to the environmental- and community-related issues in the Central Kalahari and embraces the opportunity to work with the people of Botswana and other interested parties in achieving this aim."
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