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EPIC: DCP
Market: AIM
Sector: General Mining - Diamonds & Gemstones
Diamondcorp Plc

Diamondcorp Plc

DiamondCorp plc is an emerging diamond producer focused on maximising shareholder value through the development of high-margin diamond production assets. The company is incorporated in the UK, and operates in the long established diamondiferous regions of southern Africa.

Diamondcorp Plc

www.diamondcorp.plc.uk

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Diamondcorp Plc Snapshot

DiamondCorp plc is focused on the re-development of the Lace Mine located near Kroonstad, South Africa. This historic mine is famed for its pink and purple fancies.

DiamondCorp is currently developing the Lace underground mine to access the kimberlite pipe known to extend to depths below 850m. Operations are currently focussed on developing the UK4 block while  also ramping down to 500 metres for an initial block cave. The company expects to restart diamond production from the kimberlite in H1 2016. The existing treatment plant has a capacity of 1.2 mtpa. Delineated resources will maintain the Lace mine for at least 25 years but the diamond pipe extends at depth and remains to be delineated. Annual production should exceed 500,000 carats per annum on occasions during that period.

In July 2012, the Industrial Development Corporation of South Africa agreed to lend Lace Diamond Mines R220m towards the re-development project and in November that year, DiamondCorp signed a US$6m term loan with Laurelton Diamonds, Inc., a wholly-owned subsidiary of Tiffany & Co. in return for long term diamond offtake. The Offtake Agreement took effect from the First Funding Date until the end of the life of the mine. Subject to any purchases by the South African State Diamond Trader, the Offtake Agreement will give Laurelton Diamonds, Inc. the right to purchase, on commercial terms related to fair market value, production from the Lace Mine which meets the quality and colour standards required to yield Tiffany quality polished diamonds. Special stones and those diamonds which do not meet the Tiffany standard will be excluded from the Offtake Agreement.


DiamondCorp is fully compliant with South African minerals legislation with leading local black economic empowerment (BEE) groups Shanduka Resources and Sphere Investments each holding a 13% in Lace Diamond Mines (Pty) Ltd, a subsidiary of DiamondCorp.

DiamondCorp plc is listed on the AIM Market of the London Stock Exchange (Code:DCP) and on the Alternative Exchange (AltX) of the JSE Limited in South Africa (Code:DMC).

The Lace Project

The DiamondCorp Group's primary asset in South Africa is the Lace Diamond Mine, an historic operation located some 200 kilometres south-west of Johannesburg, near the town of Kroonstad in Free State Province. DiamondCorp was awarded a mining right to the Lace property in February 2009.

History

Lace was first mined between 1901 and 1931, with some 4.5 million tonnes of rock having been extracted down to a level of about 240 metres below surface. Approximately 750,000 carats of diamonds were recovered from Lace during this period, at an average grade of 16 carats per hundred tonnes.

Geology

Two main types of kimberlite exist at Lace – an upper level Volcanoclastic Kimberlite (VK at an average grade of 24 carats per hundred tonnes) and the deeper Coherent Kimberlite Facies (CK at an average grade of around 55 carats per hundred tonnes). The Coherent Kimberlite Facies becomes volumetrically dominant at depth which confirms the old records that show higher grades in the deeper workings.

Infrastructure

The mine at Lace is serviced by a tarred road to Kroonstad and the north; electricity to the mine is provided through the Eskom grid. In 2008, DiamondCorp built a 1.2 million tonne per annum diamond recovery plant which has the capacity to treat ore for the +25 year expected mine life. There is adequate water supply to operate at this rate.

After completing a bulk-sample test at the 240m level and raisng project finance, undergournd mine development for the 47 Level block cave began in January 2013.  In 2014, the discovery of  a zone of fresh ore, the UK4 block in the upper levels resulted in mining being focussed on this area while at the same time, the decline continues. At the mine, there are offices, workshops and accommodation for senior staff.

Lace Diamonds

Along with white diamonds of above average quality, historically Lace was known for its fancy pinks and purples, which had become a signature gem from this mine. While historically the bulk of Lace′s value curve has been in the 1 carat to 4 carat range, the pipe has produced a number of large stones, up to 122 carats. More than 80% of the diamonds are of gem quality.

Plans for Lace

It is intended to mine the UK4 block by long hole open stoping while development of the first block cave on the 50m level continues. Deeper block caves in higher grade kimberlite could ultimately lead to annual output of over 500,000 carats. An underground conveyor system has being installed to bring ore to the surface. Full scale mining is expected to produce ore at a rate of 4,000 tonnes per day.

Financing

Work on the underground development began in January 2013 after capital finance had been secured. Following a due diligence review in September 2012, the Industrial Development Corporation of South Africa agreed to lend Lace Diamond Mines R220 million conditioned upon DCP raising another R100 million. This total funding requirement included a 33% contingency on the Company's forecast total capital expenditure. To fill the R100million gap, DCP agreed a US$6million (R54m) Term Loan with a wholy owned subsidiary of Tiffany & CO. in exchange for a life of mine diamond offtake agreement. The Company also issued £4.2million (R59m) of 14% senior secured convertible bonds in South Africa and the UK. In April 2014. In April 2014, the Company issued new shares for 2.1 million to cover corporate overheads. July 2015, a Placing and Open Offer raised 5.7 million and then in December 2015, a further £4 million was raised for underground development at the Lace Mine.

 

Directors and Officers

Chris Ellis
Independent Interim Non-Executive Chairman

Chris Ellis was born in 1963 and has a career in investment banking spanning over 20 years in London and the United States. For the last 9 years his principal activities have revolved around all financial aspects of the diamond supply chain, representing and advising industry banks, cutters & polishers, jewellery manufacturers and retailers. He is presently a Director of DFin Ltd, and was previously a principal of Consensus Advisors in London and the United States.

Paul Loudon
Chief Executive Officer

Paul Loudon was born in 1962 and has more than 20 years′ experience in stockbroking, corporate finance and management of junior mining and exploration companies. He has been President of Battlefields Minerals Corporation of Toronto and Chairman of BDI Mining Corp. He was head of Equities at Loeb Aron & Company Ltd, a London corporate finance house specialising in the mining sector, where he was responsible for raising considerable sums of equity capital for resource companies listed in the United Kingdom, Canada and Australia. Mr Loudon is an Associate of the Securities Institute and a member of the Southern African Institute of Mines and Metallurgy.

Michael Toxvaerd
Non-executive Director

Michael Toxvaerd was born in 1974 and holds an MBA from Cranfield University. Currently CIO of HBG Management Partners Limited, he has significant experience in capital markets, mergers and acquisitions, founding, financing and listing companies on the London Stock Exchange. He is currently a non-executive director of Rasmala PLC ( formerly European Islamic Bank plc) and holds a number of other directorships.

Neil McDougall
Non-executive Director

Neil McDougall joins the board with many years of senior management experience in international environments.  Prior to joining Rasmala as Chief Financial Officer, Neil served in senior finance roles in various organisations including Europe Arab Bank Plc, Commerzbank and Standard Chartered. In his previous roles, he has been responsible for all aspects of Global Finance support, from performance management and decision making through to Product Control, Valuations Control and Financial and Regulatory Reporting. Mr McDougall's appointment is pursuant to the terms of the financing facility ("Facility") with Rasmala plc ("Rasmala") as announced on 20 October 2016

 

Officers

Sanette de Wet
Chief Financial Officer

Sanette de Wet, born in 1977, and has more than 10 years mining experience, mainly in the diamond industry.  She graduated from North West University of Potchefstroom (BComm) and University South Africa (BCompt CTA) and completed her articles with Compendium Auditors.  She started her career as an audit manager and later mover to financial management at Etruscan Diamonds and Specialised Metallurgical Projects.

Lace Diamond Mines Pty Ltd

Pulane Kingston
Non-executive Director

Pulane Kingston was born in 1971 and graduated from the University of Wales with an LLB (Hons) and from the University of Nottingham with an LLM in International Law. She is one of the co-founders and shareholders of Sphere Holdings. After serving as Executive Director for five years, Pulane moved into the role of Non-Executive Chairperson at Sphere. Some of her career highlights include being an associate at White & Case (Johannesburg) and an associate partner at Edward Nathan & Friedland Inc, specialising in corporate, commercial and project finance law. She has been involved in privatisations, mergers, acquisitions, listings, restructuring and various empowerment transactions.

Paul Loudon
Managing Director

Paul Loudon was born in 1962 and has more than 20 years′ experience in stockbroking, corporate finance and management of junior mining and exploration companies. He has been President of Battlefields Minerals Corporation of Toronto and Chairman of BDI Mining Corp. He was head of Equities at Loeb Aron & Company Ltd, a London corporate finance house specialising in the mining sector, where he was responsible for raising considerable sums of equity capital for resource companies listed in the United Kingdom, Canada and Australia.

Andre Labuschagne
Chief Operating Officer

Andre Labuschagne was born in 1969 and is a Mining Engineer with more than 20 years’ experience in underground and surface mines in Africa and South Africa, predominantly in the diamond sector.  He completed his National Service before studying Engineering at the University of Pretoria where he gained a Bachelor of Engineering Degree (1994) and qualified as an Explosive Engineer.  Over the past 20 years he has worked for Gencor, Anglo American Coal, African Explosives Limited, Murray and Roberts and previously managed the Sedibeng underground Mine for Petra Diamonds.

Hulme Scholes
Non-executive Director

Hulme Scholes (Born 1966) is a leading South African attorney with his primary focus being mining and mineral law. Before studying Law at Wits University in Johannesburg he completed his National Service and a year working for Rand Mines on the Harmony Gold Mine. He completed a Bachelor of Arts Degree (1990) and Bachelor of Laws (LLB) Degree (1992). Over the past 20 years he has been a Partner at three law firms and is now a Director of Malan Scholes Attorneys practising exclusively in the field of Mining and Mineral Law. He is a Director of Aquarius Platinum (South Africa) (Pty) Ltd, West Wits Mining Ltd, Randgold & Exploration Company Ltd and Lace Diamond Mines (Pty) Ltd.

Itumeleng Kgaboesele
Non-executive Director

Itumeleng Kgaboesele was born in 1971 and graduated from the University of Cape Town with a Bachelor of Commerce and a Post Graduate Diploma in Accounting and is a Chartered Account. He is the CEO, one of the shareholders and the other co-founder of Sphere Holdings representing Sphere on the boards of a number of Sphere′s investee companies. Prior to co-founding Sphere, Itumeleng spent several years in investment banking in London and Johannesburg. In addition to his role at Sphere, he is an independent non-executive director of Telkom SA Limited and Old Mutual Investment Group (SA). Itumeleng also serves on the EMEA board of Entrepreneurs Organisation and is the past President of the South African Chapter.

Zola Mpulo
Non-executive Director

Zola Mpulo was born in 1979, graduated from the University of Witwatersrand with a Bachelor of Commerce and a Post Graduate Diploma in Accounting in 2002 and qualified as a Chartered Account in 2005. After completing her articles with KPMG Johannesburg she joined Rand Merchant Bank’s (“RMB”) Investment Banking Division and specialised in Corporate Finance Advisory. Thereafter, she moved to RMB’s Resource Finance department where she gained experience in structuring corporate and project finance in the Mining and Resources sector until July 2011. She joined Shanduka Resources in November 2012 upon completing an MBA from INSEAD Business School in France. In addition to Lace Diamond Mines (Pty) Ltd, she also represents Shanduka Resources on the boards of Mondi Shanduka Newsprint and Scaw Metals Group.

Shareholder information

Updated 13 January 2017

Share capital

 

    %
Shares subject to AIM and voluntary lock-in (All other shares are freely transferable.) 416,330,564 87.04%
% not in public hands 61,992,349 12.96%
Total shares in issue 478,739,580
Warrants outstanding 0
Options outstanding 12,845,000

The percentage of shares ‘not in public hands’ (as defined by the AIM Rules) is approximately 17.23% as at 13 October 2016.

Major shareholdings

  Shares held %
Rasmala Bank Plc ( formerly European Islamic Investment) 55,761,412 11.66
Majedie Asset Management 36,293,505 7.59
Hargreaves Lansdown Asset Management 24,220,737 5.06
Columbia Threadneedle Investments 21,587,483 4.51
TD Direct Investing 21,334,632 4.46
Halifax Share Dealing  19,343,339 4.04
Legal & General Investment Management  18,863,662 3.94
Barclays Wealth Mangement  18,547,689 3.88
DiamondCorp Directors 6,230,937 1.30
     
     
     

 

Directors′ shareholdings

As at 1 August 2016, the interests of each of the Directors in the share capital of the Company (all of which are beneficial unless otherwise stated) are as follows:


Name Number of Ordinary Shares Percentage of the issued
share capital of the Company
Paul Robert Loudon* 6,977,604 1.63%  
Chris Ellis  83,333 0.02%  
Michael Toxvaerd Nil 0%  
Neil McDougall  Nil  0%  
   

 

DiamondCorp Plc
1 Fore Street
London EC2Y 9DT

[email protected]
Tel: +44 (0) 20 3151 0970
Fax: +44 (0) 20 3151 0971

Registered Office
City Group plc
6 Middle Street
London, EC1A 7JA
United Kingdom

Advisors & registrars

Company Secretary
City Group plc
30 City Road
London EC1Y 2AG

Bankers

Barclays Bank plc
Town Gate House
Church Street East
Woking, Surrey
GU21 6XW
United Kingdom

AIM Nominated Advisor & NOMAD

Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
United Kingdom
Tel: +44 (0)20 7886 2500

JSE Advisor and Sponsor

Sasfin Capital (A division of Sasfin Bank Limited)
29 Scott Street
Waverley, 2090
South Africa

Solicitors

Gowling WLG
4 More London Riverside
London, SE1 2AU
United Kingdom

Werksmans Inc
155 - 5th Street
Sandton, 2196
South Africa

Auditors

PricewaterhouseCoopers LLP
PWC Building,
Cnr of Welgevonden Avenue and Memorial Road.
Kimberley, 8300
South Africa;

Technical Advisors

SRK Consulting
265 Oxford Road
Illovo, 2196
South Africa

Competent Persons

VP3 Geoservices (Pty) Ltd
Office 4 Conberg House,
5 Dreyersdal Rd.,
Bergvliet, 7945
South Africa

Diamondcorp Plc Timeline

Newswire
February 28 2017
Newswire
January 31 2017
Newswire
November 16 2016

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