DiamondCorop CEO Paul Loudon
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed DiamondCorp is accelerating discussions with alternative third parties and shareholders after failing to secure a much-needed £500 000 convertible debt facility to remain a going concern.
The embattled company, led by CEO Paul Loudon, on Friday said the undisclosed third party it was in advanced discussions with for the funding had withdrawn after DiamondCorp suffered adverse share price movements on the JSE and LSE on Wednesday and Thursday.
In a week of significant setbacks, the company’s share price plunged on Wednesday by nearly 50% and 40% on the JSE and LSE respectively after the notification that there was another delay in the ramp-up to full commercial mine production of its Lace diamond mine, in the Free State.
On Thursday, DiamondCorp’s shares had fallen for a second consecutive day, by as much as 11% on the JSE and 30.44% on the LSE, after the announcement of a Section 54 shutdown after a fire incident on a dump truck just inside the portal to the decline at the mine.
“Further to the announcements of October 12 and 13, DiamondCorp announces that the third party with whom the company has been in advanced discussions for the provision of a convertible debt facility has withdrawn from such discussions due to the adverse movement in the company's share price,” it said in an update to shareholders.
To secure the £500 000 in funding to satisfy immediate financial commitments, DiamondCorp is now in talks with certain shareholders and other third parties, that, if unsuccessful, will leave the group unlikely to continue trading as a going concern in the very near term.
“No assurances can be given at this stage that the provision of the required immediate term funding will be entered into either in time or at all.
“Additionally, in the event that the company secures the required immediate term funding, there can be no certainty that the company will subsequently secure the necessary funding solutions to meet its longer-term financial requirements,” DiamondCorp pointed out.