13 October 2016
AIM share code: DCP & JSE share code: DMC
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", "the Group" or "the Company")
Lace DIAMOND mine
OPERATIONAL and financial UPDATE
DiamondCorp, the Southern African diamond mining, development and exploration company, provides the following update on the Lace diamond mine in the Free State province of South Africa.
The Company's 74%-owned subsidiary, Lace Diamond Mines (Pty) Limited has been issued with a Section 54 shut down notice on underground operations by the South African Department of Mineral Resources ("DMR") relating to a fire incident on a dump truck which was extinguished without injury just inside the portal to the decline. The instructions issued by the DMR include a request for an "external ventilation audit team to inspect the mine for smoke and other gases". Mine management is struggling to find logic in the instruction and is considering its options including legal means of redress. The Company expects that underground mining operations will remain suspended for at least one week.
As announced on 12 October 2016, the Company, in addition to its longer term financial requirements, requires additional funding in the very near term of c.£500,000 for immediate financial commitments in order to continue trading as a going concern. The Company remains in discussion with a third party for the provision of a convertible debt facility to satisfy this requirement.
However, no assurances can be given at this stage that the provision of such finance will be entered into either in time or at all. In the absence of such a facility, it is likely that the Group will be unable to continue trading as a going concern.
The Company will update shareholders accordingly.
Paul Loudon, Chief Executive
Tel: +27 56 216 1300
Euan Worthington, Chairman
Tel: +44 7753 862 097
UK Broker & Nomad
Panmure Gordon (UK) Limited
Adam James/Atholl Tweedie
Tel: +44 20 7886 2500
JSE Designated Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
Tel: +27 11 445 8068
SA Corporate Advisor
Qinisele Resources Proprietary Limited
Dennis Tucker/Andrew Brady
Tel: +27 11 883 6358
The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR").
This information is provided by RNS