Gem confirms talks with Canada's Lucara

21st Mar 2011 07:52

Global diamond producer Gem Diamonds has confirmed press speculation that it is in preliminary merger talks with TSX Venture Exchange-listed miner Lucara Diamond.Should any merger take place it is likely that any transaction would be classed as a reverse takeover under UK listing rules because of the relative ratio of current published reserves of the two companies. Gem Diamonds expects to publish an updated statement of reserves and resources to include its Botswana project Gope at or before the time of the company's interim management statement in April 2011.FTSE 250 index member Gem Diamonds was valued at around £373m on the trading day prior to confirmation of the talks, while Lucara's market capitalisation was around C$339m (£212m).The two parties have been in talks since February, reports suggest. Lucara has a diamond project adjacent to Gem's Letseng mine in the highlands kingdom of Lesotho in Africa.