Shares in Firestone Diamonds (LON:FDI) rose 22% after it revealed it had sewn up the US$222mln required to make the Liqhobong diamond mine in Lesotho a reality.
Having already secured a US$82.4mln debt facility, the group is raising US$60mln at 3p a share via the equity markets.
This will bring in new two new significant investors - Pacific Road and RCF VI – who will also provide US$10mln of bridging finance.
The remainder will come via a mezzanine debt facility with an annual coupon of 8%.
Putting together such a significant deal in the current still-constrained environment for small-cap funding is a major coup for the company and the management team, led by chief executive Stuart Brown.
“This is an impressive accomplishment, fully financing the company’s flagship Liqhobong project, with two high quality strategic investors joining the register. We now look toward development progress for the asset,” said City broker Investec this morning.
Located in Lesotho’s highland region, Liqhobong is being developed as an open pit capable of extracting more than 1mln carats a year. In common with other developments in the area, such as Gem Diamonds' Letseng Mine and Namakwa’s Kao operation, the diamonds tend to be larger and higher grade than is the norm globally.
Boutique resources firm SP Angel said: “We have been supporters of this project and with development funding in place the company is now well placed.
“Liqhobong has scope for large diamonds as well as a smaller package of stones which appeal to the lower end of the market supported by analysis of the 325,000 carats during the operation of the pilot plant and the large stones that were broken during the recovery process.”
At 11.40am, the shares were changing hands for just under 4p each, valuing the business at around £30mln.