13th Jan 2017 13:53
LONDON (Alliance News) - Diamond miner DiamondCorp PLC on Friday said it will raise funds via a placing to fund the business rescue process for its Lace mine subsidiary and, hopefully, to restart work at the South African mine.
DiamondCorp said it intends to raise GBP1.0 million via a conditional placing, to be conducted through an accelerated bookbuild, at a placing price of 4.00 pence per share. The net proceeds will be used for mine care and maintenance, mine remediation costs, the cost of the business rescue process and a cash settlement with labour at its Lace mine in South Africa.
DiamondCorp said it has reached standstill agreements with its UK and South African bondholders and said talks are ongoing with labour unions and the non-union workforce at Lace.
An agreement between Deloitte & Touche, which is handling the business rescue for DiamondCorp's Lace Diamond Mines Pty Ltd subsidiary in South Africa, and the main union representing workers at the mine will have to be reached and outstanding wages finalised, or DiamondCorp said it will unlikely be able to continue as a going concern.
DiamondCorp said the funds it is raising will be needed in a phased manner to fund its requirements for the business rescue and, if this is successfully concluded, to restart operations at the Lace diamond mine and ramp up production.
Shares in DiamondCorp are currently suspended.
By Sam Unsted; [email protected]; @SamUAtAlliance
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