IRISH AIM-listed diamond miner African Diamonds looks set to be bought by a company controlled by Lundin Mining, the Canadian company that closed down a zinc mine in Galmoy, Co Kilkenny, last year.
The board of African Diamonds, which was set up by entrepreneur John Teeling in 2000, said yesterday it would recommend an offer by Lundin-controlled Lucara Diamond for C$82m (€58.6m) or 27pc above Friday's closing price.
African Diamonds is effectively selling its 40pc stake in a diamond mine in Botswana in southern Africa in which Lucara owns the remaining 60pc.
The deal will leave African Diamonds' shareholders owning a stake in Lucara, which will own all of the so-called AK6 mine as well as a stake in a new company that will continue African Diamonds' exploration of Botswana, Sierra Leone and Guinea.
"Marrying African Diamonds and Lucara will create a C$240m diamond producer controlling two new kimberlite diamond mines," said African Diamonds chairman Mr Teeling. Kimberlite diamonds are stones created by volcanoes.