HomeDiamonds & GemstonesDiamondCorp raises £3.18 million

DiamondCorp raises £3.18 million

diamondcorp-plc-logoDiamondCorp, the Southern African focused diamond development, exploration and mining company, announced last week that it has placed 31.8 million new ordinary shares of 0.1p each to raise £3.18 million.

The placing, which was oversubscribed, was undertaken with a range of new and existing institutional and private investors in both the UK and South Africa. The new shares comprise 25 487 000 placing shares placed through Panmure Gordon and 6 350 000 subscription shares subscribed directly with the company.

The placing price of 10p represents a discount of 13% to the closing mid-market price on AIM on June 4, 2015.

In addition, the DiamondCorp board is intending to offer up to approximately 20 million new ordinary shares of 0.1p each at the placing price by way of a non-underwritten open offer to eligible existing shareholders of DiamondCorp to raise up to approximately a further £2 million.

The launch of the proposed open offer shall be subject to the completion of customary documentation, regulatory approval and publication of a circular to shareholders.

If undertaken, the open offer would be made so as to enable all eligible shareholders to subscribe for new ordinary shares at the placing price on a pro rata basis to their current holdings and with the option for increasing their allocation pursuant to an excess application facility.

In light of the placing and the potential value implications for the company’s Lace diamond mine, in the Free State, resulting from the recently announced discovery of a Type IIa diamond, the board has concluded it is not in the company’s best interests to proceed with the royalty financing facility from Acrux Resources, of which the signing of a term sheet was announced on 17 March 2015, and has consequently been terminated at no additional expense.

Upon completion of the placing, the company will have sufficient funds to ramp up to commercial production, which is anticipated in the second half of 2015, leading to the commencement of positive cashflow anticipated by the end of 2015.

Any additional funds raised from the proposed open offer would be used to further enhance the working capital position and mine economics.

Commenting on the Placing, DiamondCorp’s CEO Paul Loudon said: “I am delighted with the strong support we have received for the company by existing and new shareholders and I look forward to updating the market on our operational developments as we ramp up to commercial production at the Lace Mine.”

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.