1st Feb 2007 08:40
Diamondcorp Plc01 February 2007 1 February 2007 Not for release, publication or distribution in, or into, the United States,Australia, Canada, Japan, the Republic of Ireland or South Africa Diamondcorp plc ("Diamondcorp" or the "Company") Admission to AIM The Company is pleased to announce the commencement of trading in its ordinaryshares on AIM earlier today, following a placing (the "Placing") withinstitutional investors at 90 pence per ordinary share of 3 pence each of theCompany ("Ordinary Shares"). Based on the placing price of 90 penceDiamondcorp's market capitalisation is £30.6 million with 33,987,078 OrdinaryShares in issue. Highlights • 74% owner of the Lace diamond project in South Africa, with an estimated underground resource of 13.7 million carats of diamonds at an estimated value of $125/carat (In-ground value estimated in excess of $1.7 billion) • Potential 20-year underground mine life producing more than 400,000 carats of gem diamonds per annum at peak production • Tailings retreatment scheduled to start Q2 2007 yielding an estimated 370,000 carats at $63/carat over 27 months • Strong Black Economic Empowerment partners - Sphere Investments and Shanduka Resources • Adjoining exploration properties • Experienced management team with proven track record Cenkos Securities plc is acting as nominated adviser and broker to Diamondcorp. Paul Loudon, Managing Director and CEO of the Company,said: "We are delighted tohave successfully completed our Admission to AIM. It is anticipated that thegroup will begin to generate cash in the near-term from a tailings retreatmentproject. This has the potential to create a strong platform from which theCompany can grow, provide cash flow to take a bulk sample from the Company'sassets and generate significant cashflow for the Company over a number of years.Management is also seeking other diamond production opportunities in SouthAfrica as we believe the world outlook for diamond prices is strong, with demandforecast to exceed mine supply in the foreseeable future." Diamondcorp shares trade on AIM under the ticker DCP. For further information, please contact: Paul Loudon, Managing Director and CEO Diamondcorp plc020 7256 2651 Joe Nally/Simon Southwood Cenkos Securities plc020 7397 8900 Cenkos Securities plc ("Cenkos"), which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forDiamondcorp plc in relation to the flotation of Diamondcorp plc and the Placingand for no one else, and will not be responsible to anyone other thanDiamondcorp plc for providing the protections offered to its clients nor forproviding advice in relation to the proposed flotation and Placing. Cenkos hasnot approved the contents of this announcement and does not accept liability forthe accuracy of any information or opinions contained herein, or for theomission of any information from this announcement, for which Diamondcorp plcand its directors are solely responsible. No representation or warranty, express or implied, is made or given by or onbehalf of Cenkos or any of its directors, partners, officers, employees, agentsor advisers or any other person (whether or not referred to in thisannouncement) as to the accuracy, completeness or fairness of the information oropinions contained herein and no responsibility or liability is accepted byCenkos for any such information or opinions. No offer or invitation to acquire shares in Diamondcorp plc is being made by orin connection with this announcement. The value of shares can go down as well asup. Past performance is not a guide to future performance. Persons needingadvice should consult a professional adviser. This announcement does not contain or constitute an offer of securities for salein the United States. The ordinary shares of the Company have not beenregistered under the US Securities Act 1993 or under the securities law of anystate of the United States. Accordingly, the Company's securities may not beoffered or sold in the United States absent registration or an exemption fromregistration. There will be no public offering of securities in the UnitedStates. Background Diamondcorp plc ("Diamondcorp" or the "Company") was formed in March 2005 toacquire and develop diamond assets in South Africa. Since incorporation, theCompany has raised approximately £11.8 million through private placements ofshares and convertible loan notes as well as an institutional placing completedupon admission to AIM, principally to enable it to acquire the Lace diamondproperty in South Africa (the "Lace Property") and finance construction of a 1.6million tonne per annum diamond recovery plant.. The Lace Property is situated approximately 200km southwest of Johannesburg,South Africa and approximately 20 km from Kroonstad, and includes: • diamondiferous tailings from previous mining operations for which there is the potential to recover an estimated 370,000 carats from retreatment; and • diamondiferous kimberlites containing a potential resource in excess of 13 million carats of diamonds with a potential underground mine life of 20 years. Diamondcorp holds a 74% interest in the Lace Property, with Black EconomicEmpowerment ("BEE") Partners, Sphere Investments (Proprietary) Limited ("Sphere") and Shanduka Resources (Proprietary) Limited ("Shanduka") each owning 13 per cent. Strategy Phase One: Tailings retreatment, prefeasibility and exploration (2007-2009) Diamondcorp, through its subsidiaries (the "Group"), is finalising constructionof a 1.6 Mtpa dense media separation diamond recovery plant and plans to treat3.6 million tones of tailings at the Lace Property within three years. It isanticipated that this activity will generate cash flow of approximately £2.30/tonne to support further exploration and a plant upgrade. Concurrently, the Group will complete a prefeasibility study on re-commencingunderground mining operations on the Lace Property, concentrating initially onthe viability of mining potential diamondiferous kimberlite above a depth of 345metres. It is estimated that the prefeasibility study will cost £1 millionwhich, it is anticipated, will be funded from the Group's own resources withoutrecourse to further equity funding. In addition, the Group will explore twoadjoining exploration properties it has been granted to delineate any kimberlitebodies that warrant bulk sampling and may have a material impact on a largermining operation. A budget for exploration will be established once Diamondcorphas greater visibility and certainty over its cashflows. Phase Two: Upgrading of plant and the larger mining operation (2009 onwards) If, after the prefeasibility study, the Directors consider the project to beeconomically viable and in the best interests of shareholders, it is intendedthat the cash flow from the tailings retreatment operation will be used to funda final feasibility study, upgrade the plant and provide working capital towardsestablishing a long-term mining operation on the potentially diamondiferouskimberlite and inferred diamond resources on the Lace Property. Corporate Structure Diamondcorp has one wholly owned subsidiary, Crown Diamond Mining Limited, acompany incorporated in the British Virgin Islands. Crown, in turn, owns 74 percent. of the issued share capital of Lace, a company incorporated in SouthAfrica, and 100 per cent. of the issued capital of Soapstone Investments(Proprietary) Limited, a dormant company also incorporated in South Africa. Shanduka Shanduka Resources is a subsidiary of the Shanduka Group, a black owned andmanaged investment company established in November 2000, with interests inresources, energy, financial services, property, technology and communication.Shanduka is chaired by the former trade union leader and former ANC secretarygeneral Mr Cyril Ramaphosa, and has Standard Bank and Investec as minorityshareholders. Sphere Investments Sphere Investments is a wholly-owned subsidiary of Sphere Holdings (Proprietary)Limited, a black owned and managed investment company formed in October 2003 bya group of experienced investment banking and private equity professionals.Sphere Holdings focuses on investing in companies in the financial servicessector (where it has made strategic investments in private equity; banking; andlong and short term insurance companies) and the industrial services sectorwhere it is in the process of building a portfolio of investments in businessesthat supply essential industrial goods and services to energy, resource,transport and petrochemical sectors. Sphere Holdings also has a portfolio ofinvestments in mining, including manganese, as well as a 10 per cent. interestin Rosy Blue South Africa, the South African division of the Rosy Blue Group,one of the world's largest diamond cutting, polishing and retailing groups.Nedbank, Sanlam and Rand Merchant Bank are minority shareholders in SphereHoldings. Board of Directors and Senior Management Euan Arthur Worthington - Non-Executive Chairman (aged 51) Mr Worthington has been involved in exploration, mining project development,analysis and corporate finance in the City of London for more than 25 years. Hecommenced his corporate finance career as Mining Analyst with Hoare Govettstockbroking in 1983, and has held positions as Senior Mining Analyst withShearson Lehman, Divisional Director and Head of Mining Research for S.G.Warburg Securities, Head of Mining Corporate Finance for BZW and Head of theMetals & Mining Team at ABN Amro. He has worked as an independent mining financeconsultant since 2001, and is an executive director of AIM-listed CelticResources Holdings plc, and deputy chairman of African Eagle Resources plc andEuropean Nickel plc respectively, also listed on AIM. Mr Worthington holds aB.Sc. Geology (Hons) from Kings College, London, a DIC (Mineral ResourcesEngineering) and M.Sc. Mineral Production Management from Royal School of Mines,Imperial College, London. He is registered with the Engineering Council as aChartered Engineer, a Member of the Society for Mining, Metallurgy andExploration, a Fellow of the Institute of Materials, Minerals and Mining, anAssociate of the Securities Institute and a past chairman of the Association ofMining Analysts. Paul Robert Loudon - Managing Director & Chief Executive Officer (aged 44) Mr Loudon has more than 20 years' experience in stockbroking, corporate financeand management of junior mining and exploration companies. He commenced hiscareer as a mining journalist for the Australian Financial Review beforeentering stockbroking as the Mining Analyst for Intersuisse Limited in Sydney.He was partner in mining corporate advisory firm JSL Pacific Ltd before joiningIndomin Resources Limited of Toronto as vice-president corporate development. Hehas been President of Battlefield Minerals Corporation of Toronto andnon-executive chairman of BDI Mining Corp. before joining Loeb Aron & CompanyLtd, a London corporate finance house specialising in the mining sector, as Headof Equities where he was responsible for raising significant sums of equitycapital for resource companies listed in the UK, Canada and Australia, includingthe initial public offering and AIM listing of Mercator Gold plc, where heserved as a founding director. Mr Loudon is a non-excutive director of Loeb Aron& Company and an Associate of the Securities Institute. Alistair Gordon Dean Holmes - Operations Manager (aged 65) Mr Holmes has more than 20 years' experience in mining industry in Australia,Zimbabwe and South Africa. Alistair has supervised the construction andoperation of several large scale diamond plants. For the seven years beforejoining the Group he managed the operations of Sonop Delweray, a large SouthAfrican private diamond producer. This involves the mining and rehabilitation ofapproximately 24 million tonnes of diamond bearing gravel per annum. He hasconstructed four large DMS plants and sort houses, and managed all theassociated security and had direct responsibility for managing a workforce of1,600 personnel. Mr. Holmes is a director of Lace. Dr Jonathan Willis-Richards - Non-Executive Director (aged 52) Dr Willis-Richards holds a Bachelor's degree in Geology from Oxford Universityand a Master's Degree in Mining Geology from Camborne School of Mines. His PhD(also from Camborne School of Mines) and subsequent research made himinternationally known for numerical modelling in the areas of mineralised andfractured geothermal systems. After some time with the UK ''Hot Dry Rock''geothermal energy project as geologist, reservoir modeller and finally as EarthScience Manager with lead contractor CSM Associates Ltd, he joined the ResourcesEngineering Faculty of Tohoku University in Japan to continue computer modellingand research as part of the Japanese geothermal research programme. In 1996 hereturned to the UK as a founding director of London based mining corporatefinance house Loeb Aron & Company Ltd where he is managing director. He servedas non-executive director of AIM listed Host Europe Plc, a profitable web sitehosting company, in the period prior to its trade sale for more than £30 millionin 2004. Nicholas Richard Allen - Non-Executive Director (aged 70) Mr Allen has worked in the mining industry for over 40 years, primarily indiamond mining and marketing, including lengthy periods with ConsolidatedAfrican Selection Trust Limited, D. Drukker & Zn NV, George Evens of Antwerp andBenguela Concessions Limited. He is a non-executive director of Mercator Goldplc. John Charles Forrest - Chief Financial Officer and Company Secretary (aged 59) Mr Forrest is a CPA with more than 30 years' experience in public companyadministration and financial management. He commenced his career with PriceWaterhouse & Co and currently acts as finance director of several publiccompanies, including AIM-listed Central China Goldfields plc. Lace Property kimberlite volumes, tonnages and average inferred grades Tonnage (Mt) Grade (cpht) Carats (Mct) Depth main satellite Total satellite main satellite Total pipe pipe pipe pipe pipe Potential Diamondiferous 0-240m - 1.75 1.75 unknown - unknown - Kimberlite1 240-345m 6.57 0.63 7.20 unknown 27.7 unknown 1.82 Inferred Resources2 345-600m 14.26 1.06 15.32 unknown 38.0 unknown 5.42 600-855m 12.88 - 12.88 unknown 50.3 unknown 6.49 Total Inferred Resources 345-855m 28.243 1.094 29.33 42.2 Total PotentialDiamondiferousKimberlite plus InferredResources 0-855m 34.813 3.474 38.28 39.4 13.73 1 estimated by MPH based on inferred kimberlite volumes, historical diamond recoveries and the drilling of resources below this level, but requiring additional testing before it could be classified as an ''inferred resource'' under any reporting code 2 in accordance with the SAMREC Code 3 includes approximately 1.1Mt of country rock xenoliths between depths of 345 metres and 855 metres assigned zero grade 4 includes approximately 0.3Mt of country rock xenoliths between depths of 345 metres and 600 metres assigned zero grade 5 MPH has identified a main pipe and a satellite pipe which constitute the identified underground resource on the Lace Property This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
DCP.L