Cash-strapped DiamondCorp, which is building a new
underground mine near Kroonstad in the Free State, has raised about £1m
in a share and warrant placement and paid creditors in a similar way.
The money, along with an insurance payout, will give DiamondCorp enough cash to keep working until mid-April at which time it will conduct a second-capital raising exercise.
DiamondCorp, whose shares trade on the JSE
and London’s Alternative Investment Market, has run into difficulties at its Lace mine, with a series of setbacks last year culminating in the temporary suspension of mining and putting further strain on its balance sheet.
Trade in DiamondCorp shares is suspended and Lace is in a business rescue programme managed by Deloitte & Touche.
DiamondCorp told the market earlier in January about the placing to recapitalise the company and on Monday said it had conducted the placement of 25.4-million shares at four pence a share, which each come with a warrant that can be exercised for 1p between November this year and end-June 2019.
DiamondCorp will use the proceeds to pay for care and maintenance at Lace as well as mine remediation costs as well as paying labour, ahead of restarting the mine if the business rescue process was successful.
Care and maintenance will absorb £649,000, business rescue costs £285,000 and general corporate costs a further £190,000.
DiamondCorp issued 3.15-million shares and associated warrants to pay professional fees and some of its debt.
One of the interesting conditions attached to the placement was a labour agreement with the Association of Mineworkers and Construction Union (Amcu).
"The placing is also anticipated to enable the group to reach an agreement with Amcu in the very near term, which is critical to the implementation of care and maintenance programme and to the success of the ongoing business rescue process," DiamondCorp said earlier in January.
"Notwithstanding a successful labour agreement and completion of the placing, in the event that the business rescue process and concurrent additional phase 2 fund-raise is not successfully concluded by early April 2017, it is likely that the group will not be a going concern at that point and will enter into insolvency proceedings.
"It should further be noted that the company’s shares will remain suspended and it is expected that a lifting of the suspension shall not be sought until a successful conclusion of the business rescue process and completion of the anticipated phase 2 fund-raise," it said.
BDLIVE
The money, along with an insurance payout, will give DiamondCorp enough cash to keep working until mid-April at which time it will conduct a second-capital raising exercise.
DiamondCorp, whose shares trade on the JSE
and London’s Alternative Investment Market, has run into difficulties at its Lace mine, with a series of setbacks last year culminating in the temporary suspension of mining and putting further strain on its balance sheet.
Trade in DiamondCorp shares is suspended and Lace is in a business rescue programme managed by Deloitte & Touche.
DiamondCorp told the market earlier in January about the placing to recapitalise the company and on Monday said it had conducted the placement of 25.4-million shares at four pence a share, which each come with a warrant that can be exercised for 1p between November this year and end-June 2019.
DiamondCorp will use the proceeds to pay for care and maintenance at Lace as well as mine remediation costs as well as paying labour, ahead of restarting the mine if the business rescue process was successful.
Care and maintenance will absorb £649,000, business rescue costs £285,000 and general corporate costs a further £190,000.
DiamondCorp issued 3.15-million shares and associated warrants to pay professional fees and some of its debt.
One of the interesting conditions attached to the placement was a labour agreement with the Association of Mineworkers and Construction Union (Amcu).
"The placing is also anticipated to enable the group to reach an agreement with Amcu in the very near term, which is critical to the implementation of care and maintenance programme and to the success of the ongoing business rescue process," DiamondCorp said earlier in January.
"Notwithstanding a successful labour agreement and completion of the placing, in the event that the business rescue process and concurrent additional phase 2 fund-raise is not successfully concluded by early April 2017, it is likely that the group will not be a going concern at that point and will enter into insolvency proceedings.
"It should further be noted that the company’s shares will remain suspended and it is expected that a lifting of the suspension shall not be sought until a successful conclusion of the business rescue process and completion of the anticipated phase 2 fund-raise," it said.
BDLIVE
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