JOHANNESBURG (miningweekly.com) – Diamond miner DiamondCorp has entered into a Shariah-compliant secured convertible financing facility with independent investment management firm Rasmala.

This comes after mining at the diamond project was halted under a Section 54 notice earlier this month, while a third party that DiamondCorp was in advanced discussions with for an urgent £500 000 convertible debt facility withdrew, after DiamondCorp suffered adverse share price movements on the JSE and LSE.

“We are pleased to have secured this new financing facility, which will enable us to sustain our operations at the Lace diamond mine while we conduct our formal sale process and evaluate all options available to us,” commented CEO Paul Loudon.

The company and Rasmala have agreed to the drawdown by DiamondCorp of two tranches under the facility for a total principal amount of £700 000.

The first of the tranches, comprising £400 000, is to be drawn down immediately, while the second of the tranches, comprising £300 000, is expected to be drawn down in the near term.

The facility will mature on December 25, with the option for early repayment at DiamondCorp's discretion. It is to be repaid in cash, or convertible at Rasmala's discretion on maturity of the facility into new ordinary shares at the equivalent of a 30%.

Meanwhile, DiamondCorp announced that board chairperson Euan Worthington has resigned from the board, with immediate effect, but will remain an employee of the company for the immediate future to ensure an orderly handover of his responsibilities.
 
Nonexecutive director Chris Ellis will be formally appointed as independent interim nonexecutive chairperson on or by October 31. The company added that Ellis’s appointment would be on an interim basis, enabling him to oversee the formal sale process.

“I look forward to welcoming Chris into his new position in due course and I look forward to
working with him during this challenging stage of the company's development,” concluded Loudon.