HomeDiamonds & GemstonesDiamondCorp suspends trading in shares after flood & considers business rescue

DiamondCorp suspends trading in shares after flood & considers business rescue

Southern African diamond mining, development and exploration company DiamondCorp has requested that its shares be suspended from trading on both AIM and the Alternative Exchange of the JSE, since the recent flooding of its Lace mine makes production impossible in the short term.

DiamondCorp said in a statement that two extreme thunderstorms passed over the Lace mine on Friday, overwhelming the mine’s pumping systems and flooding the 310 m production level to the hanging wall. More than 10 000 cubic metres of water entered the mine through the open pit and access ramps as rainfall reached almost 90 mm in just over an hour.

DiamondCorp said the level of rainfall received is almost equal to one-third of the mine’s annual rainfall. Although all personnel were successfully evacuated from the mine without injury and pumping the production level dry will take about a week, if no further material rainfall occurs, production will not be possible in the short-term.

The reason for this is that the longhole drill rig that was operating during the flood needs to be recovered and its electrics rebuilt. DiamondCorp said this could take up to 12 weeks from the time of recovery.

DiamondCorp’s management is investigating all options as a consequence of the event and its impact on the Group’s financial position, and is consulting a business rescue practitioner for the company’s operating subsidiary, Lace Diamond Mine, in terms of Chapter 6 of South Africa’s Companies Act 2008.

DiamondCorp has requested the suspension of its shares from trading with effect from 07:30 a.m. UK time and 09:00 a.m. SA time, respectively, pending clarification of its financial position.