Diamondcorp Plc USD6m Term Loan and Lace Diamond Offtake Agreement (2759R)
November 16 2012 - 2:00AM
UK Regulatory
TIDMDCP
RNS Number : 2759R
Diamondcorp Plc
16 November 2012
16 November 2012
NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE
UNITED STATES OR ANY OTHER JURISDICTION IF TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION
DiamondCorp plc
JSE share code: DMC & AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", "the Group" or "the Company")
US$6,000,000 Term Loan in exchange for Lace Diamond Offtake
Agreement
DiamondCorp, the Southern African diamond development and
exploration company, is delighted to announce that it has reached
heads of terms with Laurelton Diamonds, Inc., a wholly-owned
subsidiary of Tiffany & Co. (NYSE:TIF) for a term loan of
US$6,000,000 ("the Loan") in exchange for an Offtake Agreement for
diamond production from the Lace mine in the Free State province of
South Africa.
The Loan will be drawn down by DiamondCorp Holdings Limited, a
wholly-owned subsidiary of the Company, in two equal tranches on 10
January 2013 ("First Funding Date") and 10 April 2013 ("Second
Funding Date"). The proceeds will be advanced to the Company's
74%-owned subsidiary Lace Diamond Mines (Pty) Limited ("LDM") and
used to complete the funding required for the 47 level block cave
development at Lace.
The Loan will bear interest at 9% and must be repaid in full by
the 8th anniversary of the Second Funding Date. There will be no
payments of interest or principal for the first three years of the
Loan, with interest accumulating during this period and added to
the principal amount to be amortised and repaid. The Loan can be
repaid early in part or in full without penalty.
The Loan is subject to the completion of legal due diligence and
execution of binding legal agreements.
The Offtake Agreement will take effect from the First Funding
Date until the end of the life of the mine. Subject to any
purchases by the South African State Diamond Trader, the Offtake
Agreement will give Laurelton Diamonds, Inc. the right to purchase,
on commercial terms related to fair market value, production from
the Lace Mine which meets the quality and colour standards required
to yield Tiffany quality polished diamonds. Special stones and
those diamonds which do not meet the Tiffany standard will be
excluded from the Offtake Agreement.
Commenting on the Loan and the Offtake Agreement, DiamondCorp's
CEO Paul Loudon said: "We are very excited to have secured such a
prestigious funding partner as Tiffany. Their decision to provide
project finance in return for access to a long-term supply
agreement is testament to the quality of the Lace diamonds and an
expression of confidence in DiamondCorp's development
strategy."
Contact details:
DiamondCorp plc
Paul Loudon, Chief Executive
Tel: +44 20 3151 0970
SP Angel Corporate Finance LLP
AIM Nomad and Broker
Ewan Leggat/Laura Littley
Tel: +44 203 463 2260
Ocean Equities Limited
Guy Wilkes
Tel: +44 207 786 4370
PSG Capital (Pty) Limited
John-Paul Dicks
Tel: +27 21 887 9602
Russell & Associates
Charmane Russell/Marion Brower
Tel: +27 11 880 3924
This information is provided by RNS
The company news service from the London Stock Exchange
END
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