HomeDiamonds & GemstonesDiamondCorp secures funding for Lace mine

DiamondCorp secures funding for Lace mine

Lace diamond mine,
near Kroonstad
London, England — MININGREVIEW.COM — 12 August 2008  – DiamondCorp plc – an emerging diamond producer which expects to generate revenue of up to US$1.5 billion (more than R10 billion) from its newly launched Lace diamond mine in South Africa – has arranged a loan facility to an amount of US$5 million (R37.5 million) with Africa Opportunity Fund LP (AOF) to accelerate development of its Lace mine outside Kroonstad in the Free State.
A company statement released here said this loan completed the funding requirements for accelerated development of Phase Two underground mining at its 74%-owned Lace diamond mine, and supplemented the US$3.3 million (R25 million) of new equity placed recently with South African institutions.

DiamondCorp CEO Paul R. Loudon commented: “In these periods of difficult debt and equity markets, I am delighted in the vote of confidence demonstrated by AOF in the potential of the Lace diamond mine to deliver significant cash-flow and earnings over a long mine life.’

AOF is a subsidiary of Africa Opportunity Fund Limited – a closed-end investment company traded on the AIM market of the London Stock Exchange – and is also listed and traded on the Channel Islands Stock Exchange. The AOF Group is seeking to achieve consistent capital growth and income through investments in value, arbitrage and special situation opportunities derived from the African continent.

The company statement added that the AOF loan comprised cumulative, redeemable, secured bonds which bear interest at a rate of 12% per annum. The bonds were to be repaid over three years, with principal payments of US$500 000 (R3.75 million) due after 18 months, US$1 million (R7.5 million) after 24 months, US$1.5 million (R11.25 million) after 30 months and the balance of US$2 million (R15 million) after 36 months.

It said DiamondCorp had no other debt currently, and had the right to redeem the bonds at any time after the first anniversary date at between 105 and 108% of face value, plus accrued interest.

The loan is subject to shareholder approval of the warrants at a general meeting of shareholders, and in accordance with the listing requirements of the JSE Limited. The date for the meeting will be set shortly, and a circular will be sent to all shareholders in due course.