HomeDiamonds & GemstonesDiamondCorp no longer able to continue trading following funding failure

DiamondCorp no longer able to continue trading following funding failure

With this in mind DiamondCorp has filed notice of intention to appoint Stephen Cork and Jo Milner of Cork Gully LLP as joint administrators to DiamondCorp.

Since the appointment in November 2016 of Daniel Terblanche of Deloitte & Touche, and subsequently Lebogang Mpakati of independent advisory, as business rescue practitioners of the DiamondCorp’s operating subsidiary Lace Diamond Mines, the board has sought to explore all options available to the group in relation to the on-going business rescue process and the solvency of each of the companies and the company’s subsidiaries.

Progress has been made in relation to formal agreements and non-binding agreements in principle with a number of DiamondCorp’s creditors, notably the Industrial Development Corporation of South Africa and Laurelton Diamonds, respectively.

Nevertheless, no agreement in principle could be reached with South African bond holders in particular and, more generally, insufficient progress has been made in relation to an accelerated plan and formal route for funding, including a significant restructuring of all debt and additional equity funding to allow for a successful exit from the business rescue process.

In addition, the protracted discussion with the Association of Mining & Construction Union (AMCU), which was terminated in early April 2017 without agreement, obstructed the vital care and maintenance and remediation programme of the mine, caused all employees to be retrenched, and was the primary cause for the £1 million equity fundraise as first announced in January 2017 to not be successfully settled.

The suspension to trading in DiamondCorp’s shares on AIM and AltX remains effective.

Pursuant to Rule 41 of the AIM Rules for Companies, DiamondCorp’s admission to trading on AIM is therefore currently due to be cancelled on 15 May 2017. The status of the admission to trading on AltX will be advised as soon as possible.

Feature image credit: DiamondCorp

(An aerial view of DiamondCorp’s Lace diamond mine)