DiamondCorp raises £3.18m through share placement
JOHANNESBURG (miningweekly.com) – Southern Africa-focused diamond company DiamondCorp has placed 31.8-million new ordinary shares of 0.1p each to raise £3.18-million to fund its working capital shortfall, it said on Friday.
The placing, which was oversubscribed, was undertaken with a range of new and existing institutional and private investors in the UK and South Africa.
The placing price of 10p a share represented a discount of 13% to the closing mid-market price on Aim on June 4.
In addition, the board intended to offer up to about 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 a further £2-million.
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.
The company noted that, in light of the placing and the potential value implications for the company’s key Lace diamond mine, in the Free State, resulting from the recently announced discovery of a Type IIa diamond, the board had concluded it was not in the company’s best interest to proceed with the royalty financing facility from Acrux Resources, of which the signing of a term sheet was announced on March 17.
The agreement had since been terminated at no additional expense.
DiamondCorp believed that, upon completion of the placing, it would have sufficient funds to ramp up the Lace mine to commercial production, which was expected in the second half of the year, leading to the start of positive cashflow by the end of the year.
Any additional funds raised from the proposed open offer would be used to further enhance the working capital position and mine economics.
“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,” DiamondCorp CEO Paul Loudon said in a statement.
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