In the media

Diamondcorp's acquisition of Sonop to boost profits by $20 million a year

15 August 2007

Source: Mineweb

Diamondcorp’s acquisition of Sonop Diamond Mining may boost operating profits by $20 million per year. Diamondcorp’s production will nearly double to 237,000 carats per year.

South Africa-focused miner Diamondcorp Plc is set to generate an extra $20 million in operating profit per year via its acquisition of privately owned Sonop Diamond Mining, its chief executive said.

Paul Loudon told Reuters that the deal -- which will nearly double the company's production to 237,000 carats a year -- would swing the group into profit after making a loss in 2006.

"Sonop traditionally makes operating profit of $20 million a year, while revenues are around $50 million," he said in a telephone interview on Wednesday.

He added that Sonop's mine produced around 93,000 carats a year, but at around 10 times the value per carat than Diamondcorp's existing diamonds.

"We want to build a significant diamond producing company, and acquiring Sonop is the first step in that strategy," Loudon said.

The deal was struck at $45 million in cash -- to be funded mostly by debt -- and 7.5 million new shares.

Diamondcorp shares were suspended 8.4 percent higher earlier Wednesday at 103 pence, valuing the company at 35.8 million pounds ($71.14 million).

Useful links

Mining news links sites

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.
Miningmx is a new online mining media enterprise, a publication held in joint venture with Finance Week, a business unit of Media 24 which is, in turn, a division of South Africa’s largest media group, the US-listed Naspers Limited.
Informed comments and independent mining news.
Resource Investor
Resource Investor provides unique independent news, analysis, commentary and analytics on the sectors with the goal of empowering readers with information.

© 2017 – DiamondCorp Plc  |  Register for alerts |Glossary | Sitemap | Disclaimer
Produced by: Russell & Associates