Diversified mining group, Vast Resources, has said Botswana Diamonds has signed on to develop the Heritage concession in the Marange diamond fields, which will see the development of a special purpose vehicle (SPV).
Earlier in May the two parties signed a Memorandum of Understanding (MoU) on the proposed project, which will eventually be a 50 /50 joint venture (JV) project.
According to Vast Resources, a separate agreement will be concluded with Botswana Diamonds in due course for the joint development of diamond properties outside the Marange diamond fields.
The SPV by Botswana Diamonds and Vast Resources is for the purpose of developing diamond resources within the Marange fields.
The initial shareholdings in the SPV will be Botswana 13,33 percent and Vast 86,67 percent.
Vast has agreed a deal for exclusive access to the Heritage concession to carry out due diligence, with a view to concluding a joint venture agreement with Red Mercury.
Red Mercury will be responsible for providing a full mining licence and Vast for finding development funding. Botswana Diamonds will give assistance in the interpretation of geological and other information concerning the Heritage site pending the conclusion of the Red Mercury JV.
Vast will contribute up to $1 million on loan account as the first funding to the SPV.
Any funds required in addition to $1 million would result in an increase in the contributor's equity in the JV.
The two mining companies have the right to contribute pro rata to their shareholdings.
Commenting on the development, Vast CEO Mr Andrew Prelea said: "Since signing the exclusive access agreement for initial due diligence and pre-agreed joint venture terms on the Heritage Concession in the Marange Diamond Fields with Red Mercury (Pvt) Ltd, Vast has commenced extensive internal work and engaged third party geologists to provide a field report and desktop study.
"The company is now comfortable enough to enter into an agreement with Botswana and looks forward to the next phase of the due diligence process together with Botswana.
Meanwhile, earlier this week President Emmerson Mnangagwa said the country is set to announce a diamond policy soon.
"We didn't have a diamond policy as a country, but we now going to announce our diamond policy. With regards to platinum I can safely say it (the platinum sector) is going to be open to everyone. But the diamond policy is slightly complex and it will be announced by the appropriate Minister soon," he said.