HomeDiamonds & GemstonesDiamondCorp seeks R80 million funding

DiamondCorp seeks R80 million funding

DiamondCorp’s Lace
processing plant in
South Africa
London, England — MININGREVIEW.COM — 16 March 2010 – Emerging diamond producer DiamondCorp plc – listed on the AIM and the JSE “’ is planning to raise up to £7.1-million (R80 million) to resume underground development at its Lace mine in South Africa and to continue with exploration in Botswana.

In a statement released here the company revealed that it had placed 100 154 695 shares at 7p a share, which represented a discount of 26% to the closing midmarket price of 9.5p a share.

DiamondCorp MD and CEO Paul Loudon said he was pleased that a positive market sentiment towards the diamond sector had returned, and that the company would take advantage to raise the capital it needed to resume underground development of the Lace diamond mine. “I am particularly pleased that the placing has been strongly supported by most of our existing institutional shareholders, as well as a number of new shareholders,” he added.

The placing and subscription would fund the ongoing development the company, with £4-million planned for the implementation of the decline development and completion of the sublevel caving plan, to resume underground mining of the Lace kimberlites between the 240m and 330m levels.

The company anticipated that the Lace kimberlite at the 240m level would be accessed by the decline in the first half of 2011. A kimberlite sample of about 30 000 t would then be extracted and processed through the Lace plant to determine a definitive diamond grade at the mining level.

Full-scale production of 1.2-million tonnes a year from the underground mining operation would require additional capital, currently estimated by the bankable feasibility study at £3.5-million (R39 million), which would not be accommodated by the placing and subscription.

An additional £0.5-million (R5.5 million) of the placing and subscription would be used to finance further drilling in the company’s Jwaneng south project in Botswana. The company has 77.5% joint-venture interest in three exploration licenses in Botswana that contain nine identified kimberlites.