In the media

DiamondCorp to raise R30m for development of underground mine

05 June 2008

Source: Mineweekly

Author: Matthew Hill

JSE- and Aim-listed DaimondCorp, which will begin underground production from its Lace mine in the third quarter, plans to complete a R30-million debt-raising by the end of July, MD and CEO Paul Loudon said on Thursday.

This would go towards bringing the mine into production, after it had already raised R26-million from selling shares last month.

DiamondCorp, which currently was without debt, planned to spend R50-million on underground development at Lace this year, and was in negotiations with "a couple" of lenders.

"We have one offer on the table right now," Loudon said in an interview in Johannesburg, adding that the company was looking at both local and international debt providers.

He was unfazed by the credit environment, as the amount DiamondCorp needed to raise was relatively small, compared with the amount that miners of other commodities needed to commission a project.

"Even if you have to pay a higher interest rate, it doesn't have any impact on the economics of the project," Loudon said.

PRODUCTION

The Lace mine, which last produced diamonds in 1930, would yield some 100 000 ct from the underground operations, he stated.

This would come from DiamondCorp hauling 1 000 t/d from the end of this year.

The company would then ramp up to 4 000 t/d by the end of 2009, giving it production of about 400 000 ct for the 2010 calendar year, Loudon detailed.

"We're blasting away on the new decline shaft as we speak," he said.

Loudon went on to note that DiamondCorp's application for a new-order mining right at Lace was progressing well, and that it should have this by October.

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