First Day of Dealings
March 06 2006 - 2:01AM
UK Regulatory
RNS Number:2965Z
KimCor Diamonds plc
06 March 2006
6 MARCH 2006
KIMCOR DIAMONDS PLC
(AIM: KIM)
FIRST DAY OF DEALINGS ON AIM
#3.35M RAISED THROUGH AN INSTITUTIONAL PLACING
KimCor Diamonds plc ("KimCor" or "the Company"), a new diamond mining and
exploration company, today announces that it has successfully been admitted to
trading on AIM in conjunction with an institutional placing which raised
approximately #3.35 million (before expenses). The KimCor group owns two diamond
projects located in diamond country: the Kimberley district of South Africa.
KimCor's market capitalisation at the placing price of 15p per share is #9.52
million.
HIGHLIGHTS
*Strong asset base: The group owns and operates the Bellsbank project
("Bellsbank"), a diamond dump reclamation project, and also holds a 49%
interest (increasable to 74% following the issue of a mining licence) in Van
Zoelens ("Van Zoelens"), a kimberlite and alluvial exploration project
*Bellsbank is already revenue generating and producing diamonds which are
being sold on the open market. The directors expect production to be
increased to up to 50,000 carats per annum following the construction of a
full - scale processing plant in Q3 2006. Independent experts, AMEC, have
estimated Bellsbank to have an Indicated and Inferred Resource of 287,145
carats
*Van Zoelens, located close to Bellsbank, contains one proven kimberlite
pipe and other pipe like and alluvial targets that have been identified and
are ready for evaluation and, subject to the results of future exploration
may provide an opportunity to add to Bellsbank diamond production and sales
without recourse to a lengthy exploration programme
*KimCor's strategy is to build the group into a substantial diamond mining
and exploration business through the development of their existing projects
and through the acquisition of additional properties with emphasis on low
cost dump projects, diamondiferous kimberlite pipes and low risk advanced
exploration projects and country diversification
*The net proceeds of the placing will be used to construct and commission
a new diamond recovery processing plant at Bellsbank, to accelerate its
exploration programme at Van Zoelens, to provide working capital and to
investigate potential acquisition opportunities
Westhouse Securities LLP is Nominated Adviser and Broker to KimCor.
The AIM Admission Document is available from Westhouse Securities LLP, Clements
House, 14-18 Gresham Street, London EC2V 7NN.
Commenting on the placing and admission to AIM, Martyn Churchouse, Chief
Executive Officer said: "The placing and admission to AIM will help to broaden
KimCor's investor base and enhance its profile in the mining industry. We are
located in diamond country where there is plenty of scope for KimCor to exploit
its properties and continue growing in favourable market conditions."
Enquiries:
KimCor Diamonds plc Tel: 020 7318 5780
Martyn Churchouse
Manish Kotecha
Westhouse Securities LLP Tel: 020 7601 6100
Bill Staple
Richard Morrison
Bishopsgate Communications Ltd Tel: 020 7430 1600
Dominic Barretto
Nick Rome
See also: www.kimcordiamonds.com
Notes to Editors
PLACING STATISTICS
Placing Price per New Ordinary Share 15 pence
Number of New Ordinary Shares placed 22,320,000
Total proceeds from the Placing (before expenses) #3,348,000
Number of Warrants in Issue* 11,160,000
Number of Ordinary Shares in Issue following Admission 63,480,000
Market Capitalisation following the Placing at the Placing Price #9,522,000
*Subject to the resolution to authorise the directors to issue the warrants as
if section 89(1) of the Act did not apply being passed at the extraordinary
general meeting of the Company convened to be held at 11.00 a.m. on 14 March
2006, the warrants will be admitted to AIM on 15 March 2006.
The Ordinary Shares will be listed on AIM under the symbol KIM and warrants
under the symbol KIMW.
BACKGROUND
KimCor Diamonds plc is a new diamond mining and exploration company incorporated
in March 2005 for the purpose of developing mining assets and projects primarily
in South Africa.
DESCRIPTION OF PRINCIPAL ASSETS
Bellsbank
The Bellsbank project is based on the mining and recovery of diamonds from
tailing material and rock dumps generated by historical underground production.
Independent consultants, AMEC have estimated that the Bellsbank project contains
an indicated and inferred resource of 287,145 carats.. The Bellsbank project has
been operating using a pilot plant and, following admission to AIM, the
directors believe that the Bellsbank project will be able to expand production
by constructing a full-scale diamond recovery plant by Q3 2006.
The proposed full scale production plant is designed to process 720,000 tonnes
of tailings per annum, and is modular in order to facilitate easy capacity
expansion, if required.
Based on a monthly throughput of 60,000 tonnes, using conventional technology,
at an average recoverable grade of 6.5cpht, the group has budgeted to generate a
minimum of 3,900 carats per month. However, the tailings contain on average up
to 20 per cent of coarse kimberlite and diamonds that may be locked up in the
coarser kimberlite pieces and would not be liberated by the conventional
technology used in the pilot plant circuit. The large-scale plant to be
constructed by KimCor includes a rod mill that is expected to break down the
coarse kimberlite and liberate additional diamonds. The directors believe that
actual output is likely to exceed the budget as the latter does not make
allowance for any diamonds liberated by the milling process.
On the basis that approximately 3.9 million tonnes of feedstock have been
verified by AMEC, and that mining is scheduled to take place at a rate of
720,000 tonnes per annum, the Bellsbank project has a life of 5.3 years. The
Directors remain confident that the additional, but currently unverified,
tailing and concentrate resource identified by AMEC, which is excluded from the
resource estimate, will add significantly to the life of the mine.
Van Zoelens
Van Zoelens, located close to the Bellsbank project contains a proven virgin
kimberlite pipe that can be quickly evaluated as the basic structure and outline
of the pipe has already been defined, and the exposed kimberlite contains clear
evidence of diamond indicator minerals.
The Van Zoelens pipe is located on one of a number of sub-parallel regional
structures that are known to host diamondiferous kimberlites. The locally
distinct texture and mineralogy of the Van Zoelens pipe is similar to the nearby
Baby Balmoral pipe, which has produced high quality stones at an average grade
of 20 cpht.
The directors consider Van Zoelens to be highly prospective, offering multiple
targets that include three additional circular anomalies associated with
regional fissures, as well as potential diamondiferous gravel resources. Targets
scheduled for follow-up include the Van Zoelens kimberlite pipe that has been
broadly delineated at surface by trenching and pitting, and in which weathered
kimberlite has been clearly exposed.
STRATEGY
The directors intend to build the group into a substantial diamond mining and
exploration business. This will be achieved through the group's dump reclamation
expertise and by the acquisition of further low cost dump projects in
conjunction with the development of new primary mining projects.
Exploration will form an important part of the group's operations, but emphasis
will remain on the acquisition of more advanced projects in which either
resources have been clearly defined or where preliminary reconnaissance
exploration has identified targets that are proven to be diamondiferous.
In the short term, the group's objectives will be achieved through the
implementation of the following:
*prioritising the construction of the new Bellsbank project diamond
recovery processing plant, which is anticipated to offer a low risk, low
cost operation providing an earnings base for future growth;
*undertaking exploration on the targets delineated at Van Zoelens with a
view to adding to the existing resource base of the group; and
*concluding on-going negotiations to acquire properties, with particular
emphasis on advanced exploration projects with defined low risk targets and
additional dump resources.
The medium to long-term objectives will substantially encompass the following:
*considering (and where appropriate entering into) strategic alliances and
further acquisitions with emphasis on low risk advanced projects and country
diversification to provide a long-term future for the group; and
*investigating the potential benefits of establishment of a cutting and
polishing works to add value, prior to sale, of diamonds recovered by the
group from its mining operations.
The Board
Gordon Riddler, Non-Executive Chairman
Mr Riddler has been engaged in exploration, mining and project evaluation for 40
years. He has held senior posts with Gold Fields Limited and Rio Tinto plc. He
was appointed Head of Minerals Group at the British Geological Survey (BGS) in
1993 in charge of technology innovation and information dissemination
programmes, and has served on the boards of research, exploration and
development companies. He is also Executive Chairman of Maghreb Minerals Plc,
which is listed on AIM.
Martyn Churchouse, Chief Executive Officer
Mr Churchouse is a geologist with 25 years' experience, including 14 years with
Johannesburg Consolidated Industries as a senior mine geologist, for Anglo
American-Namibia as a senior geologist, and for Gold Fields Namibia and Gold
Fields Ghana. He has also spent seven years working on exploration and mining
projects in Eastern Europe including mine manager of a 2.5mtpy tailings
reclamation project.
Manish Kotecha - Finance Director
Mr Kotecha is currently the part time Chief Financial Officer and company
secretary of Caledon Resources plc, a mining exploration company, which is
listed on AIM. He has a BA (Hons) in Accounting and Finance from Kingston
University.
Roger Harris - Non-Executive Director
Mr Harris has 40 years' experience in the mining industry spanning activity
across the globe and a wide range of resources including uranium, base metals,
industrial minerals and precious metals. He has held a number of executive
positions with overall responsibility for large mining and refining operations
and chemical plants and has overseen a number of projects and related
financings. He is currently Executive Chairman of Central Gold Securities plc.
He is a Chartered Engineer and is a member of the Institute of Materials
Minerals and Mining, the US Society for Mining Metallurgy and Exploration and
the Canadian Institute of Mining, Metallurgy and Petroleum.
USE OF PROCEEDS
The net proceeds of the placing will enable the group to construct and
commission a new diamond recovery plant at Bellsbank, to finance its exploration
programme and to investigate potential acquisition opportunites.
WARRANTS
An extraordinary general meeting ("EGM") of the Company to pass a resolution to
authorise the directors to issue 11,160,000 warrants will be held on 14 March
2006 at 11.00 a.m. The Company has sought irrevocable undertakings to vote in
favour of the resolution in person or by proxy from the holders of 75 per cent.
of the issued share capital of the Company as at the date of the EGM.
One warrant is being issued for every two shares issued pursuant to the placing.
Warrants to subscribe for an aggregate of 11,160,000 ordinary shares will be
issued to participants in the placing, representing approximately 15.0 per cent.
of the issued share capital of the Company following admission to AIM, assuming
exercise of all the warrants but no other share issues. The warrants will
entitle holders to subscribe in cash for ordinary shares at an exercise price of
18.75 pence per warrant each on the terms and conditions of the warrant
instrument. The warrants may be exercised at any time from admission to AIM of
the warrants up to and including the second anniversary of admission of the
warrants to AIM or earlier in certain circumstances.
Admission is expected to take place and dealings in the warrants are expected to
commence on AIM at 8.00 a.m. on 15 March 2006.
---ENDS---
This information is provided by RNS
The company news service from the London Stock Exchange
END
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