TORONTO (miningweekly.com) – Lucara Diamond Corporation has raised $50-million in debt to build its two gem projects in Botswana and Lesotho, the TSX-V-listed junior said on Thursday.
Lucara said it had concluded that the debenture, which matures at the end of 2013, provided the best value to shareholders.
The company will make quarterly repayments, and no interest is payable during the facility’s term, though Lucara will pay the lenders nine-million shares instead.
After maturity, if Vancouver-based Lucara has not yet repaid the loan, the outstanding amount will accrue interest of 5% yearly.
The lenders include Zebra Holdings and Investments and Lorito Holdings, owned by trusts of the late oil and gas magnate Adolf Lundin.
Both are also considered to be insiders to Lucara, the diamond hopeful disclosed.
CEO William Lamb said the deal showed the robustness of the company’s AK6 mine in Botswana.
“The funds are the final piece in the puzzle, allowing Lucara to fully finance the construction of AK6 and allowing the company to take advantage of an ever-improving rough diamond market,” he said.
AK6 is set to start producing by the end of this year.
Lucara also owns the Mothae project in Lesotho, where it is busy trial mining.
Earlier this year, there was speculation that Lucara would merge with peer Gem Diamonds, which also owns diamond assets in Botswana and Lesotho, but the Vancouver company shot the rumours down.
Edited by: Liezel Hill
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