Diamond Corp Lace diamond mine
DiamondCorp Lace diamond mine
DiamondCorp has announced it is looking to raise £1 million as part of a plan to assist with its 74% owned Lace diamond mine which has been placed under business rescue.

The company also said it has entered into standstill agreements with the Group’s UK and South African bondholders to raise

The Southern African mining, development and exploration company added that discussions are on-going between the business rescue practitioner and the company, labour unions and rest of the workforce with regard to care and maintenance work to start.

DiamondCorp further said that an agreement between the business rescue practitioner and AMCU needs to be finalised in the near term for the group to remain a going concern.

“Management continues to evaluate, in conjunction with the business rescue practitioner, DiamondCorp’s capital requirements during the process and in the event of its successful conclusion.

“Capital will be required in a phased manner to fund DiamondCorp’s critical expenditure requirement as the business rescue process continues and to resume Lace mining operations and ramp-up production from the UK4 mine if it is successful.”

Lace diamond mine previously announced that a standstill agreement had been reached with its primary secured lender, the Industrial Development Corporation of South Africa.

DiamondCorp also announced a proposed conditional placing to raise gross proceeds of £1 million through the issuance of new ordinary shares of 0.1 pence each in DiamondCorp with attached warrants over new ordinary shares — on the basis of one warrant for every placing share subscribed.

It is expected that the placing shares will be priced at, or around, 4 pence each, with each warrant expected to be exercisable at 1 pence between 1 November 2017 and 30 June 2019.

The placing is being conducted through a bookbuilding process, which will be launched immediately, will be made to new and existing eligible institutional and other investors, and the books are expected to close no later than 09:00 UK time on 19 January 2017.

However, Panmure Gordon reserves the right to close the books earlier, without further notice.Completion and settlement of the placing is conditional upon  the conclusion of a labour agreement with the Association of Mineworkers and Construction Union (AMCU) on terms approved by the business rescue practitioner and by the board of DiamondCorp.