3rd Nov 2015 08:51
LONDON (Alliance News) - Shares in DiamondCorp came under pressure on Tuesday morning after the company said its subsidiary overseeing the Lace diamond mine in South Africa will face some financial pressures in the first quarter of 2016 due to delays suffered in ramping up production at the project.
DiamondCorp said it encountered challenging ground conditions in its work on the project recently and, though this has been remedied, the time taken to fix the issues has resulted in a delay to the blasting of the slot drive from which the initial tonnage ramp up at the project will start.
Due to this, DiamondCorp's 74%-owned Lace Diamond Mines Pty Ltd subsidiary, which operates the mine, will face some cashflow pressures in the first quarter of 2016 when it is due to start debt repayments, the company said.
Talks have started with its lenders and partners regarding options to alleviate these cashflow problems, and DiamondCorp said the talks have been positive.
Still, DiamondCorp shares were down 9.9% to 7.77 pence on Tuesday morning, one of the worst performers in the London market.
By Sam Unsted; [email protected]; @SamUAtAlliance
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