DiamondCorp Lace diamond mine
DiamondCorp Lace diamond mine
Embattled diamond miner DiamondCorp has appointed Chris Ellis as its independent non-executive chairman, with immediate effect.

The appointment of Ellis, who previously served on the board as a non-executive director, is on an interim basis, mainly to oversee the formal sale process of DiamondCorp’s Lace diamond mine in the Free State, as announced on 18 October 2016.

The appointment follows the resignation of Euan Worthington.

DiamondCorp earlier this month entered into a £700 000 Shariah-compliant secured convertible financing facility with independent investment manager and shareholder in the company, Rasmala.

It was agreed that the facility would be drawn down by DiamondCorp in two tranches – £400 000 of which would be drawn down immediately, with the remaining £300 000 to be drawn down in the near term.

This follows an announcement by DiamondCorp on 12 October that the company, in addition to its longer term financial requirements, requires additional funding of £500 000 in the very near term for immediate financial commitments in order to continue trading as a going concern.

This comes after DiamondCorp reported that it had suffered another delay in the ramp up to full commercial mine production, with the 30 000 tpm output target only expected to be reached in February 2017.

This was further compounded by an announcement the very next day that operation at the Lace mine had been halted by a Section 54 work stoppage following a fire incident on a dump truck just inside the portal to the decline.

These successive announcements, which caused DiamondCorp’s share price on both the JSE and LSE to drastically decline, also prompted a third party with whom DiamondCorp had been in advanced discussions for a £500 000 convertible debt facility to withdraw from discussions, owing to the adverse movement in the company’s share price.

It was at this point that DiamondCorp announced that it was considering a merger or sale of the Lace mine.

Additional board changes

As part of the agreement with Rashmala, Neil McDougall has been appointed as a non-executive director of DiamondCorp with immediate effect.

This is pursuant to the terms of the financing facility with Rasmala and is in addition to the continued role of Michael Toxvaerd as non-executive director of both DiamondCorp and Rasmala.

Prior to joining Rasmala, McDougall has served in senior finance roles in various organisations including Europe Arab Bank, Commerzbank and Standard Chartered.

Meanwhile, DiamondCorp non-executive director Hulme Scholes, has also resigned from the board, effective immediately, but shall continue to remain a director of DiamondCorp’s operating subsidiary Lace Diamond Mines.