TORONTO (miningweekly.com) – California-based financial lender Vanderbilt Commercial Lending has presented TSX-V-listed Tango Mining with a proposal outlining a $30-million loan commitment to fund Tango’s acquisition and the capital required to restart the BK11 kimberlite diamond mine (BK11 mine), in Botswana.

Pending finalising the loan commitment agreement, the outstanding principal, plus accrued and unpaid interest, would be due at the end of the five‐year term of the loan, which included an 18‐month prepaid interest Reserve Fund.

The fixed interest rate on the loan would be the greater of 13% a year or 975 basis points above the WSJ prime rate during the term of the loan. The loan would have a first lien position on the BK11 mine and Tango’s 51% interest in the Kwena Group.

Tango on Thursday advised that the BK11 mine was a diamond-bearing, champagne-glass shaped kimberlite pipe with a surface area of 8.7 ha. The pipe itself was located in the Orapa/Letlhakane kimberlite district, which was one of the world’s most prolific diamond-producing areas.

According to an October 2015 preliminary economic assessment, production from the seven years of openpit mining was expected to yield about 569 610 recovered carats, with $188-million in total life-of-mine gross revenues from the operation, an expected after‐tax discounted net present value of $40-million and an aftertax internal rate of return of 43%, when using an 8% discount rate.

Meanwhile, Tango also announced that it had entered into an agreement to sell shares and claims with Firestone, whereby the company agreed to acquire Firestone’s right in the processing facility, as well as interest and title in the mineral rights comprising the BK11 mine, held directly or indirectly, through Firestone’s 100%-owned subsidiary, Firestone Diamonds Botswana, and Firestone’s 90%-owned subsidiary, Monak Ventures, for $8-million.

Tango also entered into a ‘sale of shares of claims’ agreement to acquire the remaining 10% interest in Monak from Tema Thuo for $800 000.

Under the Firestone and Tango agreement that expires on April 8, Tango would have to raise $7.65-million, raising the total ongoing cumulative maintenance fees payable from August 1, 2015, until closing of the deal (subject to a maximum of $40 000/m). It would also have to obtain Botswana Ministerial approval for the transfer of the controlling interest in Monak, as well as receive the requisite regulatory approvals.

Tango’s Kwena Group had four thermal coal, metallurgical and processing plant and engineering contracts that processed 6.5-million tonnes a year, with clients that included Exxaro and Glencore. The four South African projects were located within the Ogies and Highveld coalfields, Mpumalanga province and Kliprivier coalfield, in KwaZulu‐Natal province.