HomeDiamonds & GemstonesDiamondCorp terminates sale of business

DiamondCorp terminates sale of business

Diamondcorp announced on Monday that it has successfully concluded a financing facility with independent investment manager and major shareholder in the company Rasmala, totalling £700 000 to satisfy DiamondCorp’s immediate funding requirements, as announced on 20 October 2016.

The company added it will continue to examine alternative means of enhancing shareholder value in the normal course of business.

The termination of the sale process comes after the company announced on 18 October that it was launching a strategic review of opportunities to conduct a merger or sell the group’s businesses, including the Lace mine in the Free State, which had emerged in the form of potential acquirers expressing interest in the company.

This took place in parallel with discussions to secure the funding.

“With respect to the approaches it received, the board of DiamondCorp is of the opinion that they were opportunistic in nature and significantly undervalues the company. The proposed transactions would also not be completed in time to meet the company’s financing objectives,” DiamondCorp said in a statement.

“The board notes that the Lace asset, irrespective of start-up delays, still contains an estimated 9.39 Mct of diamonds with an in-ground value in excess of $1.5 billion — based on the $164/ct base case and grade and tonnage estimates contained in the independent resource statement of March 2016,” DiamondCorp said.

The board further said that the various interested parties with underground mining experience who have reviewed the company’s technical data and visited the Lace mine all recognised the company’s technical strength, evident from the underground mine development and surface recovery plant.

Concurrent with obtaining the financing facility with major shareholder, Rasmala, DiamondCorp has instituted a number of board changes to strengthen corporate governance and provide the company’s executive management team with additional support and the financial management experience required to successfully implement its mine development plan.

This includes the appointment of interim non-executive chairman Chris Ellis and Rasmala’s finance director, Neil McDougall as non-executive director. The board is also considering the additional appointment of an independent non-executive director with specific financial and operational mining experience.