Mar 19, 2015

DiamondCorp Finalises Royalty Deal for US$ 7 Mn Finance for Lace Project

DiamondCorp, the diamond development and exploration company with a focus on Southern Africa, has announced finalisation of a financing deal between its 74%-owned subsidiary Lace Diamond Mines (Pty) Limited (LDM) and Acrux Resources (Pty) Limited.

Acrux Resources is a Johannesburg-based resource focused investment management company.

Under the agreement, the latter will advance LDM the South African equivalent of US$7 million interest free in exchange for LDM granting to Acrux a 3% net revenue royalty payable on the first 12 million carats of diamonds recovered from the mine. Royalty will be calculated on net revenue received by LDM after the deduction of diamond marketing costs.

The proceeds of the transaction will be used by LDM mainly to provide working capital cover during the commencement and ramp-up of operations at the Lace mine during H2 2015.

DiamondCorp CEO Mr Paul Loudon said: “By creating an asset out of a small part of Lace's future cashflow and exchanging that for cash now, we significantly boost cash reserves while only incurring a small reduction in management's assessed net present value of DiamondCorp's 74% interest in LDM.”

Photo: Courtesy DiamondCorp