Australia's Tychean Resources, a gold exploration and natural resource development company, has agreed to buy a 74 per cent stake in South African-based diamond company, Blom Diamonds, reports Australian Mining. The deal is reported to be worth up to $4.1 million (AUD 5.5 million). Tychean described the acquisition as a culmination of “significant efforts in securing a cornerstone project” that will transform the company “into a vertically integrated diamond-focused company.” Blom Diamonds, which comprises Blom Diamond Cutting Works and Ernest Blom Diamonds, engages in trading, beneficiation, cutting and polishing of diamonds. Tychean believes the acquisition will distinguish it from the host of competitor exploration companies.
As a result of the deal, they will now, "have the necessary experience to combine the full value chain of diamond exploration, production, trading, beneficiation, cutting and polishing, in turn creating a vertically integrated investment vehicle,” the company said in an ASX announcement. “Tychean notes that the value add by cutting and polishing company-produced diamonds would be in the vicinity of 20 to 30 per cent.” Founder of Blom Diamonds Ernie Blom, the current president of the World Federation of Diamond Bourses (WFDB), will become managing director of Tychean when the deal closes. Blom said he will still be based in South Africa. In a recent webinar for GemAtlas live from Johannesburg, Blom said that the rough diamond market has opened very strongly this year, and that polished will likely follow. He said he expects a robust market going forward. The deal is expected to close in 90 days once it receives approval from the Australian Securities Exchange and Tychean’s shareholders.