DiamondCorp plc has inked an agreement with Rasmala plc, a leading independent investment manager and shareholder in the Company to be drawn down in two tranches totalling £700,000. The Company said that the agreement is a Shariah-compliant secured convertible financing facility. It will help DiamondCorp tide over its current crisis which had led to the suspension of operations at its Lace diamond mine in South Africa last week.
The first of the tranches of £400,000, is to be drawn down immediately, while the second, in the amount of £300,000, is anticipated to be drawn down in the near term.
The proceeds of the Facility will satisfy the Company’s urgent immediate term funding requirement, and shall be utilised for working capital purposes, DiamondCorp said in a statement.
The Facility will mature on 15 December 2016, with the option for early repayment at DiamondCorp’s discretion. The Facility is to be repaid either in cash or convertible at Rasmala’s discretion on maturity of the Facility (or earlier in certain circumstances). The Facility is secured against up to 5,000 carats of diamonds currently held in inventory and/or to be produced from operations.
Consequent to this agreement, the Company announced that Euan Worthington, current Chairman, has resigned from the Board, effective immediately, with Chris Ellis, current Non-Executive Director of DiamondCorp soon to be appointed at Independent Interim Non-Executive Chairman. Worthington will remain with the Company in the immediate future to ensure an orderly handover of his responsibilities.
Rasmala has been granted the right to appoint an individual to the Board of DiamondCorp, subject to satisfactory completion of terms and in accordance with applicable rules and regulations. The right by Rasmala is in addition to the continued role of Michael Toxvaerd as Non-Executive Director of both DiamondCorp and Rasmala.
The statement also added that the Company requires an additional equity and/or debt financing of c.£2.5 to £3.0 million in the near term to cover the anticipated cash required to fund operations through to commercial production. It will continue to explore all options available to the Company in parallel with its discussions to secure additional funding, including merger or a sale of the Group’s businesses.
Paul Loudon, CEO, commented, “We are pleased to have secured this new financing facility, which will enable us to sustain our operations at the Lace diamond mine whilst we conduct our Formal Sale Process and evaluate all options available to us.”
News Source : gjepc.org