JOHANNESBURG (miningweekly.com) – Lesotho-focused diamond explorer Kopane Diamond Developments on Wednesday announced its intention to raise around £5,7-million through a share placement scheme.

The company, which owns the Liqhobong project in Lesotho, would place more than 47-million new ordinary shares with certain institutional and other investors, at 12 p a share.

Kopane would also issue more than 2,4-million new ordinary shares to satisfy conditions for an equity swap with investment firm Landstead Capital.

The diamond company said that more than 24,7-million of the initial placement shares would be issued to Lanstead. The equity swap agreement would be undertaken in an effort for Kopane to retain economic interest in the shares issued to Lanstead.

The shares issued under the placement would represent about 20% of the existing issued share capital of Kopane, and trading of the shares on the Aim would start on January 18.

Kopane said in a statement that the funds raised through the share placement would allow the company to resume production and to carry out further work on a definitive feasibility study for the Main Pipe at the Liqhobong project.

Since the first quarter of 2009, the market price of rough diamonds has been recovering from the substantial falls seen in late 2008. Kopane noted that market indications were that by late 2009, prices recovered to some 80% of those achieved in 2008.

“The company is therefore closely monitoring the level of prices and their sustainability with a view to restart production at the best time,” a statement read.

In December, a new Main Pipe resource statement was issued, and showed a total of 90,67-million tons of kimberlite, containing 31,1-million carats.

Kopane chairperson Francesco Scolaro noted that the subscription to the share placement indicated support for the company as it moved towards the next phase of restarting production at Liqhobong.

“As announced last year, the Main Pipe is considerably larger than previously thought and we will continue to consider strategic options in its development to maximise shareholder value," he added.

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