DiamondCorp (LON:DCP) has agreed a debt rescheduling with main lender IDC and will launch a placing to raise a further £4mln.
Shares will be sold through a book build process undertaken by Panmure Gordon with the money earmarked to ramp up production at the Lace diamond mine in South Africa.
Last month, DiamondCorp warned that slower than expected progress with the development at Lace had affected its cash flow projections.
The plan now is increase production of higher grade K4 zone material to 30,000 tonnes by next July.
The miner expects to be cash flow positive from that point and by 2018 be processing one million tonnes of kimberlite.
At that point, DiamondCorp expects to have recovered approximately 466,000 carats of diamonds, generating net cash flow of about R362mln (£17mln).
The arrangements with IDC, its empowerment partner, will see DiamondCorp pay higher interest on its loan, which interest and principal combined will rise to R311mln (£14.4mln) with first repayments pushed back a year until February 2017.