DiamondCorp plc  announced yesterday that  its talks with the   Industrial Development Corporation of South Africa (IDC) and the Association of Mining & Construction Union (AMCU) had failed to formulate an agreement which would allow it to put its project – Lace Diamond Mine (LDM) --  on “care and maintenance”.  As a result, the Company   retrenched  all its employees,  effective from April 3, 2017.

“As a further consequence of the retrenchment, the senior secured status necessary for the effectiveness of the post commencement finance pursuant to the IDC Agreement (as announced on 28 February 2017) is no longer available for new funding, as in a liquidation priority is given to amounts due relating to employment,” the Company elaborated.

DiamondCorp added that after discussions with the “major affected parties”, LDM   has appointed Lebogang Mpakati of Independent Advisory (Pty) Ltd   as joint Business Rescue Practitioner, to work along with  Daniel Terblanche of Deloitte & Touche.

“The Board of DiamondCorp has advised the BRP and the IDC that unless there is an accelerated plan and route for funding in place which can be completed by mid-May 2017, including a significant restructuring of all debt, and successful exit from the Business Rescue process, then it is likely that the Group would need to be placed into administration,” the Company said while making the announcement.