DiamondCorp (LON:DCP) undertook an additional placing that will take the total funds raised this week to £3 million.
The company has placed almost 0.6 million shares at 8.5 pence each to raise nearly £50,000, following a placing announced on 7 December to raise £2.95 million via an issue of 34.7 million shares, also at 8.5 pence.
The proceeds will be used to finance additional underground work on the Lace kimberlites in South Africa.
The company has decided to carry out its bulk sampling programme 20 metres deeper, at the -260 metre level, following an independent review of its plans.
This will require 240 metres of additional decline development, which will add a further 6 weeks to the work programme. Overall it will also add around £1 million to the cost - including both direct and indirect costs.
The independent geotechnical team believes it will be better to target the -260m level in the bulk sampling programme. Access to most areas of the pipe at this level will be unrestricted, allowing for easier and safer sampling methods.
Diamondcorp now expects to reach this level for bulk sampling by the end of February 2011, and the sampling programme will be completed by the end of April 2011.
Broker Fairfax said that the placing will strengthen the company’s financial position considerably.
“Extending the depth required to take the bulk sample, despite delaying progress, does carry certain benefits in that the work being done would have been necessary later next year when developing the mine for full production in 2012, therefore effectively bringing forward progress,” Fairfax said in a recent note to clients.