Diamond and gold hopeful BDI Mining has agreed a £42 million cash bid from Full List newcomer Gem Diamonds.

As reported here last week, AIM-quoted BDI, producing diamonds at Cempaka in Indonesia and drilling for gold at Woodlark Island in Papua New Guinea and chaired by Lonrho Africa’s entrepreneurial Australian boss David Lenigas, has been considering funding options, possibly including a bid. Now, Clifford Elphick, the ex-De Beers luminary and Oppenheimer family director who brought Gem Diamonds to the London Stock Exchange with a £285 million issue in February, has stepped into the breach.

Gem is offering 37p in cash a share for BDI, which is 8.8 per cent more than yesterday’s closing price, more than twice BDI’s 14p float price in 2004 and more than 70 per cent up on Growth Company Investor’s recommendation in November. Gem, which currently has interests in Africa, notably the Congo and Central African Republic, says it has received irrevocable undertakings and letters of intent to accept the offer representing nearly 57 per cent of BDI’s shares.

That suggests Elphick has it in the bag, though it is often worth holding as long as possible in the process in case of an unexpected development.