17th Jun 2015 08:40
LONDON (Alliance News) - DiamondCorp PLC Wednesday launched an open offer of up to 20.9 million shares at 10 pence each, the second part of its equity fundraising to tackle a working capital shortfall as it heads towards commercial production at its Lace mine.
The South African diamond miner earlier this month raised GBP3.2 million in a share placing and said it intended to raise up to GBP2 million more in an open offer to existing shareholders.
Under the open offer, eligible Shareholders may subscribe for shares on the basis of 1 open offer share for every 17 existing ordinary shares.
The company had in March opted for a USD7 million royalty financing with Acrux Resources (Pty) Ltd to "provide significant cash at the operating company level without the dilution of a large equity issue or additional debt". However, it then decided that the Acrux deal was not in its best interests, partly due to the "potential value implications" for its Lace mine due to the discovery of a Type IIa diamond.
At the time of publishing annual results for 2014 on March 26, DiamondCorp said its working capital shortfall was GBP1.8 million in a base case scenario and GBP2.8 million in the worst case, with the proceeds of the share issuance to fund the gap.
DiamondCorp shares were down 0.6% at 11.31 pence in London Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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