Paragon Diamonds (LON:PRG) has raised £1.55mln through a share subscription, backed by directors, to fund the development of its Lemphane project in Lesotho.
The diamond group will issue 31mln new shares at 5p, of which institutional investor Lanstead will take 25mln. Paragon has also entered in a 24 months equity swap deal with Lanstead over the subscription shares.
Paragon directors Martin Doyle, Stephen Grimmer and Simon Retter are subscribing for 800,000 shares, while 45.35% holder Obtala is being diluted as it is taking up 2mln shares.
Going forward, Martin Doyle, the company’s executive chairman, said the objective is to establish an inferred resource at Lemphane by the middle of 2014.
To achieve that, the rest of 2013 will be focused on completion of the 30,000 tonnes surface bulk sample, detailed geological modelling and the initiation of trial mining.
The trial mining will continue beyond the end of 2013 and is expected to generate some 2,000-3,000 carats.
“This parcel of diamonds will provide a reliable insight into the prevailing diamond values at Lemphane and I look forward to being able to report on the recovery of further large high value diamonds that Lesotho is renowned for producing.”
In 2012, Paragon made an ongoing loss of £1.1mln (£14mln).