London, England — 23 May 2012 – African diamond mine development and exploration company DiamondCorp plc has announced that its 74%-owned subsidiary, Lace Diamond Mines (Pty) Limited has entered into a loan funding term sheet with the Industrial Development Corporation of South Africa Limited (IDC).
A DiamondCorp statement released here says that under the terms of the loan funding term sheet, IDC has agreed to make a loan available to Lace Diamond Mines (Pty) Limited to the value of R280 million (approximately US$33.6 million), subject to the satisfactory conclusion of due diligence and certain other conditions precedent.
The loan would be used for the underground development of Lace mine and the purchase of mining equipment, and would likely carry a term of seven years.
DiamondCorp CEO Paul Loudon said: “The key driver for management in seeking funding for the Lace mine development has been to find the optimum financing method which is the least dilutive for shareholders.
“Therefore, we are delighted that we and our BEE partners have been able to agree in principle a debt financing proposal from the IDC to provide over 98% of the estimated capital required to establish a block cave development on the 47 level at the Lace mine” he added.
Management`s latest estimate for the total cost of development at Lace is R384 million, but with revenue expected from diamond sales after 18 months, the peak funding requirement is forecast to be R280 million. The loan would be secured over the assets of Lace.
DiamondCorp anticipates that a final agreement would be finalised by the end of July.
Source: DiamondCorp. For more information, click here.