Proactiveinvestors United Kingdom DiamondCorp

DiamondCorp agrees US$33.6 mln loan terms with South Africa’s IDC for Lace mine UPDATE

Mon, 21 May 2012 11:11:00 +0100

This agreement marks a significant milestone in DiamondCorp's transition from developer to producer, and is bang in line with management's efforts to find a financing method which is the least dilutive for shareholders of the company.

DiamondCorp agrees US$33.6 mln loan terms with South Africa’s IDC for Lace mine

Mon, 21 May 2012 07:28:00 +0100

DiamondCorp (LON:DCP) said its 74 per cent-owned subsidiary Lace Diamond Mines has entered into a loan funding term sheet with the Industrial Development Corporation of South Africa Limited (IDC).

The IDC will grant the subsidiary a loan of 280 million Rand, approximately US$33.6 million, subject to due diligence.

Chief executive Paul Loudon said: ”We are delighted that we and our Black Economic Empowerment (BEE) partners have been able to agree in principle a debt financing proposal from the IDC to provide over 98 per cent of the estimated capital required to establish a block cave development on the 47 level at the Lace mine.

“This is a significant milestone in DiamondCorp's transition from developer to producer and we welcome the support of the IDC in funding this potentially long-life diamond mine in the Free State Province."

The money will go towards underground development and purchase of mining equipment at the Lace mine.

The term of the loan is expected to be 7 years.

Subject to completion of due diligence and satisfaction of other conditions, including approval for the upgrade of the electricity supply to the mine by South African utility Eskom, DiamondCorp expects the loan agreement to be finalised by the end of July 2012.

The group's latest estimate for the total cost of development at Lace is R384 million but with revenue expected from diamond sales after 18 months, the peak funding requirement is forecast to be R285 million.

RNS press release - Loan Funding Term Sheet with IDC

Mon, 21 May 2012 07:01:00 +0100

DiamondCorp appoints Michael Toxvaerd as director

Tue, 01 May 2012 07:30:00 +0100

DiamondCorp (LON:DCP) has appointed Michael Toxvaerd as a director to help finalise funding for the Lace mine in South Africa.

Toxvaerd has more than 15 years' experience of founding, operating, acquiring and integrating businesses in private equity and public markets and is chief investment officer of UK firm HBG Management Partners.

He is also a non-executive director of AIM quoted European Islamic Investment Bank (EIIB), which is interested in around 23.02 per cent of DiamondCorp's share capital.

Chairman Euan Worthington said today: "We are very pleased to welcome Michael on to the board and believe that his financial background will help to finalise the financing for Lace while his entrepreneurial experience will help us evaluate other opportunities in the diamond sector."

The company is currently developing Lace with initial production expected in 2013 and full production by mid-2014.

The strategy is not to remain a one mine company, but use the Lace mine as the cash flow generator on which to build a medium-sized mining company.

The mine is located in the Free State Province. It was operational from 1901-1931 and was closed and flooded by De Beers as part of its efforts to control the diamond market. It has a total resource of 13 million carats.

RNS press release - Directorate Change

Tue, 01 May 2012 07:00:00 +0100

DiamondCorp started as ‘buy’ with a 15 pence target price at Northland Capital

Wed, 25 Apr 2012 09:33:00 +0100

Northland Capital has started coverage of DiamondCorp (LON:DCP) with a ‘buy’ rating and a 15 pence price target, giving it massive upside to the current level of 5.25 pence.

The group is currently developing the Lace mine in South Africa with initial production expected in 2013 and full production by mid-2014.

The strategy is not to remain a one mine company, but use the Lace mine as the cash flow generator on which to build a medium-sized mining company.

The mine is located in the Free State Province. It was operational from 1901-1931 and was closed and flooded by De Beers as part of its efforts to control the diamond market. It has a total resource of 13 million carats.

Analyst Dr Ryan D Long said in the broker note that underground bulk sampling completed last year confirmed the kimberlite grade, and the South African Diamond Exchange in February valued the Lace diamonds at an average price of US$172 per carat.

This is a higher average price per carat than Petra Diamonds’ (LON:PDL) flagship mines Finsch and Cullinan, with US$129/ct and US$128/ct, respectively, he said.

DiamondCorp’s share price fell in 2011 despite the successful completion of a bulk test at the 250 metre level that produced a higher carat value than anticipated and grades in line with expectations, Long explained.

According to the analyst, investor fears that the funds needed to develop Lace would come from a dilutive equity source brought the share price down from a high of 14.8 pence in May 2011 to the current price of around 5.25 pence.

Equity is not however, expected to be the source of funding for developing Lace, according to what chief executive Paul Loudon told Proactive Investors in a recent interview, Long noted.

The group is currently talking to banks, project financiers and potential rough diamond buyers about debt facilities and expects to sign a heads of terms agreement within the next month.

“If the debt facility is in place, we expect the share price to increase as investor fears are alleviated,” Long said.

The analyst believes this to be one of at least two significant developments that could result in a share price rise this year. The other is the restart of tailings reprocessing which will provide a revenue credit to development costs at Lace.

“Based on a cash flow analysis of the expected mining operations which assumes debt financing of US$37.9 million for the project and an 11 per cent interest rate on the debt we calculate a target price of 15 pence and initiate on DiamondCorp with a BUY rating. We expect full year 2011 results to be released towards the end of June 2012,” Long concluded.

COMPANY Q&A: DiamondCorp on plans for the Lace mine

Fri, 06 Apr 2012 09:30:00 +0100

There has been steady newsflow from emerging diamond producer DiamondCorp recently, including the validation of its longstanding $50 million (£31 million) project to reopen the Lace mine in South Africa’s Free State province. We find out more on the future plans of this mining junior.

DiamondCorp CEO says debt funding agreement should be in place in a “month or so”

Fri, 30 Mar 2012 10:42:00 +0100

Paul Loudon, CEO of DiamondCorp (LON:DCP), tells Proactiveinvestors that within the next month or so he hopes to have debt funding in place to take the Lace mine in South Africa through to production. Paul is confident that shares should rise back up to the 15p area once shareholders realise there will not be any equity dilution. Paul is also very positive about the price of diamonds and with little supply he says that there are long term benefits to be had.

DiamondCorp's Loudon ready to speak to financiers after SRK green light

Wed, 21 Mar 2012 10:13:00 +0000

Paul Loudon, chief executive of DiamondCorp, is preparing to talk to banks, project financiers and potential rough diamond buyers. It comes after an independent engineering report gave the green light to the company’s longstanding $50 million (£31 million) project to reopen the Lace mine in South Africa’s Free State province.

DiamondCorp shares spike after its plans for the Lace diamond mine are endorsed

Tue, 20 Mar 2012 15:21:00 +0000

Shares in DiamondCorp spiked almost 10 per cent after an independent assessment endorsed its plans for the Lace diamond mine in South Africa. The engineering report compiled by outside consultants SRK found the company’s proposed block cave scheme was the most “appropriate” way of mining Lace.

DiamondCorp gets validation for planned Lace mine development

Tue, 20 Mar 2012 08:17:00 +0000

DiamondCorp's (LON:DCP) proposed underground development at its Lace mine in South Africa has been validated by an independent consultant.

An engineering report for the 47 Level Block Cave scheme (470m depth) complied by consultant SRK found it was an "appropriate" method of mining for 1.2 million tonnes of kimberlite per year.

The report was required to progress negotiations with potential project financiers of the development, designed to produce up to 500,000 carats of diamonds a year.

Chief executive Paul Loudon said: "Our development plan has now been validated by SRK which paves the way for discussions with a range of potential project financiers to progress.

"The key driver for management in these discussions will be to find the optimum financing method which is the least dilutive for existing shareholders."

The model forecasts total mining costs of US$16 per tonne and the total development cost, including working capital and a 15 per cent contingency on capital and development costs, is estimated in the Lace financial model at $50 million.

Around 600,000 tonnes of kimberlite will be extracted and processed during the cave development.

Expected revenue from this kimberlite during the 43 months of development is estimated at $54.7 million before 100,000 tonnes per month of production is achieved.

SRK calculates that the project's net present value in the agreed LoM (life of mine) financial model is $188 million using a 10 per cent discount rate, with DiamondCorp's 74 per cent share worth $139 million.

RNS press release - LACE MINE INDEPENDENT ENGINEERING AND RESOURCE REP

Tue, 20 Mar 2012 07:00:00 +0000

DiamondCorp: Lace mine diamonds revaluation ups price 7.5 pct - UPDATE

Fri, 10 Feb 2012 14:03:00 +0000

--- Adds broker comment ---

DiamondCorp (LON:DCP) announced that a revaluation of the initial bulk sample taken from its Lace mine in South Africa last year has increased the price significantly.

SA Diamond Exchange revalued the 2,168 carats recovered from the bulk sample and estimated a price of US$172 per carat in the current market. This represents a 7.5 per cent increase from the US$160 per carat valuation of the first 1,850 carats from the bulk test announced last October.

DiamondCorp said the increase in value is a reflection of slightly better overall diamond quality in the final 318 carats, as well as a moderate firming of prices for Lace diamonds since the market correction in September 2011.

In light of the prices for Lace diamonds, the company has taken up the retreatment of tailings again. It will run this on a single shift basis for approximately 2 months and will then decide whether it will retreat tailings in two daily shifts.

House broker Fairfax noted that the firm was restarting its tailings recovery operation on better prices for Lace diamonds.

"The 7.5 per cent increase in price is good news for DiamondCorp and for the Lace diamond mine and for the hard rock project," it said in a note.

In the meantime, SRK Consulting is on track this month to complete the Independent Engineering Report on the 47 level block cave proposed for the Lace mine.

The report is required to progress negotiations with several potential project finance providers looking to finance the underground development which is designed to mine 1.2 million tonnes of kimberlite and produce up to 500,000 carats of diamonds per annum.

Construction of a new equipment maintenance workshop has been completed and major rebuilds of the Lace mine underground mining fleet have started in readiness for rapid re-commencement of underground development once project finance is secured.

The cash balance is approximately £2 million at present with no debt, allowing project financing negotiations to be undertaken in a considered manner, DiamondCorp said.

The group also announced that, following preliminary sample results from kimberlite J-01 at Jwaneng South in Botswana, it has decided not to explore the property further and hand all rights back to the tenement holder Geoperspectives (Pty) Ltd.

It only recovered low grades from J-01, and had previously announced low recoveries from the J-05 kimberlite.

DiamondCorp managing director Paul Loudon said: "Despite being located near to the richest diamond mine in the world and the encouraging mineral chemistry displayed by these kimberlites, mini bulk tests suggest they do not contain macrodiamond grades sufficient to support a large-scale commercial diamond mine.

“Management remain in active discussion with numerous parties regarding additional kimberlite projects in Botswana and other diamondiferous regions of southern Africa," he added.

DiamondCorp: Lace mine diamonds revaluation ups price 7.5 pct

Fri, 10 Feb 2012 10:59:00 +0000

DiamondCorp (LON:DCP) announced that a revaluation of the initial bulk sample taken from its Lace mine in South Africa last year has increased the price significantly.

SA Diamond Exchange revalued the 2,168 carats recovered from the bulk sample and estimated a price of US$172 per carat in the current market. This represents a 7.5 per cent increase from the US$160 per carat valuation of the first 1,850 carats from the bulk test announced last October.

DiamondCorp said the increase in value is a reflection of slightly better overall diamond quality in the final 318 carats, as well as a moderate firming of prices for Lace diamonds since the market correction in September 2011.

In light of the prices for Lace diamonds, the company has taken up the retreatment of tailings again. It will run this on a single shift basis for approximately 2 months and will then decide whether it will retreat tailings in two daily shifts.

In the meantime, SRK Consulting is on track this month to complete the Independent Engineering Report on the 47 level block cave proposed for the Lace mine.

The report is required to progress negotiations with several potential project finance providers looking to finance the underground development which is designed to mine 1.2 million tonnes of kimberlite and produce up to 500,000 carats of diamonds per annum.

Construction of a new equipment maintenance workshop has been completed and major rebuilds of the Lace mine underground mining fleet have started in readiness for rapid re-commencement of underground development once project finance is secured.

The cash balance is approximately £2 million at present with no debt, allowing project financing negotiations to be undertaken in a considered manner, DiamondCorp said.

The group also announced that, following preliminary sample results from kimberlite J-01 at Jwaneng South in Botswana, it has decided not to explore the property further and hand all rights back to the tenement holder Geoperspectives (Pty) Ltd.

It only recovered low grades from J-01, and had previously announced low recoveries from the J-05 kimberlite.

DiamondCorp managing director Paul Loudon said: "Despite being located near to the richest diamond mine in the world and the encouraging mineral chemistry displayed by these kimberlites, mini bulk tests suggest they do not contain macrodiamond grades sufficient to support a large-scale commercial diamond mine.

“Management remain in active discussion with numerous parties regarding additional kimberlite projects in Botswana and other diamondiferous regions of southern Africa," he added.

RNS press release - Operations Update

Fri, 10 Feb 2012 10:00:00 +0000

Ocean Equities says DiamondCorp looks a good bet for 2012

Mon, 30 Jan 2012 08:58:00 +0000

Chris Welch, Analyst at Ocean Equities, tells Proactive Investors that DiamondCorp (LON:DCP) represents a good play in the diamond space and having overcome the problems in 2011, thrown at it from issues beyond its control, Chris says that CEO Paul Loudon is the right man to take the company forward in 2012.

Diamondcorp says "significant" number of lenders interested in financing Lace

Mon, 30 Jan 2012 08:04:00 +0000

The South Africa-based diamond miner is hopeful of arranging debt finance for nearly all the cost of developing its Lace diamond mine after talks with possible lenders.

RNS press release - Operational Update

Mon, 30 Jan 2012 07:00:00 +0000

Diamondcorp recovers gem quality stones at Jwaneng South

Tue, 20 Dec 2011 14:52:00 +0000

DiamondCorp (LON: DCP) said today its latest drilling at Jwaneng South in Botswana had recovered 23 macro diamonds of mostly clear gem quality.

The group added that the majority of the stones were fragments of larger diamonds most likely broken during the drilling process, though four pink diamonds were present.

The diamonds were recovered from the first five large diameter (455mm) drill (LDD) holes undertaken on kimberlite J-05 at Jwaneng South.

The concentrates from each sample will be re-processed early in the New Year in order to ensure that no diamonds were missed.

Once the samples have been re-processed, the data, together with the micro diamond data recovered from earlier exploration, will be submitted for modelling to determine an initial grade estimate, DiamondCorp said.

In the meantime, LDD drilling at kimberlite J-01 is continuing, with samples due to start arriving at Lace for processing in the New Year.

DiamondCorp's managing director Paul Loudon said: "We look forward to receiving final results and the grade modelling from the mini-bulk tests on both J-01 and J-05 in the first quarter of 2012. Only when the final data has been assessed and modelled will we have an indication of the grade potential of these kimberlites."

Jwaneng South is about 10 kilometres southeast of De Beers Jwaneng mine – the world’s ‘richest’ diamond mine.

RNS press release - Botswana Exploration Update

Tue, 20 Dec 2011 14:00:00 +0000