Mbada Diamonds (Private) Limited (“Mbada”) is a 50/50 joint venture which was established pursuant to agreements negotiated and concluded in August 2009 in Zimbabwe between Grandwell Holdings Ltd (“Grandwell”), a subsidiary of the Reclam Group and Marange Resources (Private) Limited (“Marange”).
The objective of the joint venture is to explore, develop, mine and market diamonds from the northern portion of the Marange Concession Area (“the Concession Area”) in Eastern Zimbabwe held under Special Grant 4720.
The Concession Area is approximately 1,000 hectares.
Grandwell negotiated the right to manage the day-to-day operations of Mbada and the marketing of the diamonds mined from the Concession Area.
Marange agreed to maintain all mining rights and to allow the joint venture exclusive rights to conduct mining operations in the Concession Area and enjoy full title to the diamonds mined or recovered in the Concession Area.
In July 2009, the Cabinet of the Zimbabwean Government of National Unity issued a directive to the Ministry of Mining advising them to proceed with transactions related to mining in the Marange area, as identified by the previous Minister of Mines.
The income earning potential of the joint venture was referred to in the Zimbabwean Budget Speech, which was presented by Minister Biti on 2 December 2009.
On 10 February 2010, the Chief Secretary to the President and Cabinet of Zimbabwe issued a letter to Grandwell re-confirming that the Government of National Unity of Zimbabwe fully supports the joint venture project and that all requisite approvals were procured prior to the conclusion of the joint venture agreements.
As a consequence of the endeavours of Transfrontier, the size of the Concession Area has quadrupled, Mbada having been awarded an additional 3 000 hectares of concession area (the "Additional Concession Area") which Additional Concession Area is situated immediately adjacent to the Concession Area. The estimated life of mine of the mining activities at the consolidated Mbada concession area is expected to be in excess of 25 years operating at increased production levels from 50 tons per hour DMS capacity to 200 tons per hour DMS capacity
Further concession area in addition to the Additional Concession area has now been awarded to Mbada which has resulted in a Total Concession Area in excess of 7700 hectares which substantially further enhances the life of mine and expected production levels. Any necessary and relevant legal /documentary formalities are expected to be finalized in due course.